Two unexpected revelations in Warren Buffett's CNBC interview

1. 00:00 - Buffett on his decision to stop donations to Gates Foundation

BECKY QUICK: Warren, first of all, thank you for sitting down and talking with us today. I appreciate it.

WARREN BUFFETT: It's always good to sit down. (Laughs)

BECKY QUICK: Yes, I find the same thing.

The last time we sat down and spoke with you, or I guess it was two times ago in March when we sat down with you to talk about what you were doing with your charitable giving, you said that you were going to be watching and waiting, that you were kind of waiting to see what came out about Bill Gates and the Epstein files and what had happened.

You said you hadn't determined what you were going to do.

Today you put out a release saying that you will be increasing the amount of money that you give to the Susan Thomas Buffett Foundation, your three children's foundations, but there will be nothing given right now to the Gates Foundation. Is that your decision?

WARREN BUFFETT: That's correct. That's correct.

But — but in interpreting that, I would point out that I've read a great deal since January 1 in terms of what happened with Bill and Epstein, and I've read his remarks to Congress given under oath, and I've read cross examination, and while it's distasteful, while he made mistakes, I made mistakes in hiring all kinds of people or choosing friends, and then finding out later that they — that one way or another, they weren't what I thought they were.

And so I found nothing in there that that was beyond what I could see — I could picture myself doing.

And, you know, he ended it. And I've had situations where I made mistakes about people or people may have felt they made mistakes about me.

But they — you know — life goes on and — and no one — no one bats 1.000 in the business of choosing people,

BECKY QUICK:  You're talking about hiring decisions, maybe who you're associating yourself with, and there were certainly some questionable decisions on that that came up in the release of these files, but there was also other, you know, personal information.

WARREN BUFFETT: Yeah. No. He — which he admitted to.

BECKY QUICK: Yeah.

WARREN BUFFETT: Yeah. No. And there again, I would say that, you know, I would — I've known some pretty wonderful people, and I still know some wonderful people.

I don't think they've made every decision correctly.

BECKY QUICK: So why, if that's your opinion on it, why are you no longer giving money to the Gates Foundation?

WARREN BUFFETT: Well, I reevaluated my whole situation.

It's just like I've been doing since I was in my 20s, and we'd gotten married, Susie and I, and we didn't really have any money, but we did know that we intended to live fine, and we intended to have a family, and — but we did not have aspirations of, you know, having six houses or a 500-foot yacht or anything of the sort.

So even then, we talked about what we would do philanthropically. But my idea, and conviction, was that I would compound money at a better rate than society generally, and that Susie would give it away better than 99.9 percent of the people that were giving it away, and she would get involved personally with the gifts, whereas I like to do things wholesale, and she liked to do things retail.

So we had a plan, but we didn't have any money. And over time the money started to pile up, and she would say, "Are we rich yet?" And I would say, "No, but we're getting closer."

But I was not in a hurry to do anything. We did some small things as we went along. I did it.

I felt the most important threat to mankind was — was the — was the nuclear bomb.  And so I had sort of grandiose plans in my mind about how I could change the probabilities of that happening, and I finally came to the conclusion, after decades, that I could not have a 100th, or 1,000th, of 1 percent chance of succeeding in that.

And, you know, it's nice to bet on long shots, but betting on things that are essentially —

BECKY QUICK: So you've changed your plans?

WARREN BUFFETT: So I changed plans.

BECKY QUICK: Why did you change your plans?

WARREN BUFFETT: Well, we changed plans because of what I've set out here. The money began — the money began to pile up —

BECKY QUICK: No, but you changed your — you changed your plan now. In 2024, you said it was a lifetime pledge to the Gates Foundation.

Now in 2026, you are saying that's not the case. What happened?

WARREN BUFFETT: Well, what happened was that I gave the Gates Foundation a great deal of money —

BECKY QUICK: Maybe 47 billion dollars in total?

WARREN BUFFETT: Yeah. And I had no — and I thought that was a good decision. I think it was a decent decision.

But I did not think my kids were in any way ready to give away vast sums of money.

We'd started — Susie and I started with them — I think we gave them — we may have given them a hundred thousand dollars each.

BECKY QUICK: This goes back 30 years at this point, or longer?

WARREN BUFFETT: That's about right. Yeah.

But they were growing children. You know, they had children, you know, they had children of their own by that time.

But still — they —they — I don't think they were ready for it. And I certainly wanted to treat them all equally. So that's always a problem — is — if they have unequal talents of something.

Now, I can't turn them all into musicians, and I can't turn them all into baseball players or anything.

But I really hoped in the charitable field that they would have common goals and be able to work out among themselves a way where, with vast amounts of money, that everybody felt there was plenty to do what they wanted to do. And I have the —

BECKY QUICK: And you think that's the case today?

WARREN BUFFETT:  Pardon me?

BECKY QUICK: You think that's the case today?

WARREN BUFFETT: I feel the probabilities of that are extraordinarily high.

And — now — is — could something happen to this plan? Of course. I mean, I've got three children that are 72 and 71, and look at my age.

I mean, things can happen in this world that cause you to change — to change.

But I have no expectation of changing. I mean, as far as I'm as concerned, we've reached the ideal point.

We — we kicked. Well, Susie died in 2004, so it's been more me kicking up the amount they receive annually. And clearly, they feel happy with the job, too.

I mean, there's no sense sticking people in a job that they — they aren't fit for, or that — where they differ totally from you and your views.

I mean that — that — I had different views in life than my dad, who I admired more than anybody in the world, but it still didn't mean that I joined his church or, you know, did — did anything identically. And — and he encouraged that view.

He would — he would quote to me Emerson, which — where Emerson said something to the effect that the force in you is new in nature. You know, he's saying, you know, you're one of a kind. Find out what that one is.

And I think I found it very young by luck, circumstance, and pretty purposeful pursuit myself.

My kids did not. They behaved like — like most kids. They — they flirted with a lot of different ideas. And — but I feel 100 percent now about what I have seen them do.

My son Howard just published a 100 page or so report explaining what he's doing, why he's doing, what it's costing.

BECKY QUICK: An annual report for the Howard Buffett Foundation?

WARREN BUFFETT: Yeah. And it's better than I could write.

He's — he — he has a sense of stewardship, and — and he also has enormous empathy for people he sees that don't have it as lucky as he has.

BECKY QUICK: So then is it fair to say 20 years ago in 2006, when you made this decision, you trusted the Gates Foundation more than your children, and now you trust your children more than the Gates Foundation?

WARREN BUFFETT: No, the amounts were different. It isn't to say that I trusted them differently, but I felt they were capable of handling —

And I was certainly not going to turn something over to my kids and then pull it back from them. I mean, and —

And the Gates Foundation has turned out to earn far more money than they expected to do. They spend more money than anybody in the world that I can think of.

BECKY QUICK: Yeah. They have an endowment of — north of 90 billion dollars, I think it is.

WARREN BUFFETT: It's around that figure, and Bill has very substantial resources outside, which he intends to give, and I believe — a hundred percent — I believe that they will go there.

And I, you know — I've really done the same thing as Bill, in a certain sense. I'm — except I'm — when I put it in, I tell the three children that that it is theirs and it's their responsibility to get it done well.

And — and you may find this hard to believe, but it's true. I've never looked at their Form 990s, which they file. I — I'm not judging each action as it takes place, because you take actions where you think there's only a 10 percent or 20 percent probability of success. It's not like investments.

BECKY QUICK: But what are your goals for the money? And you kind of intimated that the kids have similar goals as to what you have.

WARREN BUFFETT: There's — there are all kinds of ways in which the world is as unequal as you can possibly imagine. I mean, just imagine in health, or the luck of birth, or all of those sort of things. And the ultimate goal is to make life better for the people who get short straws.

And there's a lot more people who get short straws than we'll ever be able to take care of, and — and my kids will have more insight into certain areas than I would. And I have more insight than — than they do just because of different interests and exposure.

But the one thing I'm convinced of is that they will be attempting to do something, and they'll be better at it. And the probability is that they've got more years to live than I do.

So, I mean, it really sneaks up on you when you get to be in the 70s or something like that.

But I wouldn't — I can't think of a person in the world that — 30 or under, for example — I would trust to do it.

I think there's all kinds of brilliant people that are 30 or under, and they may turn out to be leaders of society and — and terribly important writers, or whatever it may be. But I do think there's something to seeing how people behave under different circumstances.

BECKY QUICK: The kids are going to come under pressure, and probably already have, from a long list of people who think that they should fund their ideas.

I saw something today on X that Brad Gerstner put out suggesting that you give the money to Trump accounts, that there are other great things to do. 

What do you say to the lots and lots of people who will say this is where you should put that money, or what do you think they should say?

WARREN BUFFETT: If you take 8 billion people in the world and feel that everybody should have an equal chance, I mean, you could — you could spend a thousand dollars or 10 thousand dollars, and you know, to solve everybody's problems. You're never going to solve everybody's problems.

The idea of serving — solving a societal problem, which is what I started out as, with — with a nuclear weapon — I mean, everybody who worked on the nuclear weapon regretted the fact that they had to put together something like that. The most brilliant people in the world, but they never figured out how to put the [genie] back in the bottle.

And, you know, that — that is not something that society in the first couple hundred million years of existence there — couple million —

BECKY QUICK: Do any of those plans, though, like the Trump accounts, appeal to you? Do you think they appeal to the kids? Do you — or do you just leave it to the kids and say, you figure it out?

WARREN BUFFETT: I leave it to the kids. But I do have this provision in my will, not in these gifts that I'm giving now, but in the — the bulk of my fortune is likely to be left upon my death, even though I'm stepping up the —

BECKY QUICK: Yeah. I will say right now it's 140 billion dollars that you have left, based on yesterday's closing stock price, in terms of the Class A shares you have left.

If — the money you gave out this year is 6 billion dollars.

WARREN BUFFETT: Yeah. It'll have to go up.

BECKY QUICK: Right, it's 17 and a half billion dollars, at least, annually, and that's assuming that Berkshire doesn't go from here —

WARREN BUFFETT: Yeah —

BECKY QUICK: — if you want this to be given out in eight years, as you've said.

WARREN BUFFETT: — which is a terrible assumption, incidentally. I mean, that is not a realistic assumption.

BECKY QUICK: To give 17 and a half billion dollars away, annually?

WARREN BUFFETT: No. That — that an investment produces nothing.

BECKY QUICK: Oh, correct. So —

WARREN BUFFETT: I get about 5% Treasury bills, you know.

BECKY QUICK: Right. How much did you have when you started making these donations in 2006? We were talking about less than a hundred billion dollars at that point, right?

WARREN BUFFETT: Yeah. Yeah.

BECKY QUICK: So you've given away 67 billion dollars, and now you have 140 billion dollars left to give as of today.

WARREN BUFFETT: Which is the nature of compound interest.

BECKY QUICK: Right.

WARREN BUFFETT: That's one thing I understand. (Laughs)

I may not understand all these other things, but —and —

BECKY QUICK: But 17 and a half billion dollars, even if it weren't to go up, is more money than anybody is giving away right now. And the Gates Foundation gave away, what, 8 billion dollars last year?

WARREN BUFFETT: Yeah, that's — that's about right. And —

BECKY QUICK: That's a lot.

WARREN BUFFETT: And they did it — they did it employing, you know, a few thousand people, which almost any foundation would, that had that kind of money.

And — and I — I'm impressed by the fact that my kids really want to give the money away rather than do other things with it as they go along. So they —

BECKY QUICK: You mean rather than spend it on themselves?

WARREN BUFFETT: Yeah, or buildings or anything of the sort.

Now, when they're — they'll need more help as they go along. But I — I think — I think the foundations employ something between — there's three of them now —

BECKY QUICK: Four of them, with the STB (Susan Thompson Buffett) Foundation.

WARREN BUFFETT: Well, with STB.

Well, let's take the kids first, because there they make the total decision as to what they're doing. And they have between 11 and 25 employees, and —

BECKY QUICK: Total? Between the three foundations?

WARREN BUFFETT: No, each.

BECKY QUICK: Each. OK.

WARREN BUFFETT: Yeah.  And — and they have expense ratios far below that of institutions that are much better known and —

BECKY QUICK: Expense ratios closer to one percent or less?

WARREN BUFFETT: What they've shown — they've shown — they've shown that they're not regarding it as play money.

BECKY QUICK: Right. Right. Meaning that the bulk — almost everything they get goes back out the door.

WARREN BUFFETT: Well, it really all goes out the door eventually, but —

BECKY QUICK: Yeah.

WARREN BUFFETT: But yeah — yeah. They — they're not going to build, you know, huge office buildings or hold conferences at esoteric places and all kinds of things.

You know, there's nothing wrong with doing that. I mean —

But the important thing is whether people that have, you know, a hundred times what they need and don't pass it along to somebody else for the next generation. And — and many parts of the world have been doing that for thousands of years.

BECKY QUICK: Yeah, you're not a big fan of bureaucracy. Berkshire Hathaway was run here, in this office, with 25 people or something in the home office.

WARREN BUFFETT: Twenty-five people. And we probably went up — we probably grew in size 10-for-one before we added the last two or three.

BECKY QUICK: Uh huh.

Before we move on, does  — does Bill Gates know about this? When we spoke with you in March, you said you had not spoken with him since any of these allegations started coming out.

He said the same thing last month in — in June when he sat down with this congressional testimony, that he had not spoken with you since January.

Have you spoken with him since? And does this come as a surprise to him?

WARREN BUFFETT: No — no, it does not come as a surprise.

And — and B), he came by Omaha, I don't know, three weeks ago — or — I kind of lose track on time — but certainly not three months — but three — since we talked. And we spent three hours talking together, and — and — and he's — he — he intends to call me. He's the one that initiates calls, just generally.

And — and as you can see, I'm available anytime. (Laughs)

But — he's — he's much more organized than I am, and — but he already proposed another one, and —

BECKY QUICK: Another meeting?

WARREN BUFFETT: Yeah. And — and — he is — we have had an enormous number of good times together since we met — whenever it was — what was it, 1991?

And he's always done more than his share of it — always more than his share. You don't see me doing the planning or doing —

BECKY QUICK: In the friendship, you mean?

WARREN BUFFETT: Yeah. It's — it's — it's been a wonderful friendship.

And — and Bill and I are interested in enough things that overlap that we find plenty to talk about, and then each of us has got his own specialty to some extent.

BECKY QUICK: But you told him three — three weeks ago or so when you met him that you would not be making any more donations to the Gates Foundation?

WARREN BUFFETT: Yeah, I may have even — may have been even — I can't tell you exactly when I told him.

But — but at some point, I had read the — I had read what Congress came up with. I'd read everything.

And — and all I can say is, you know, I've — I don't know whether I've done dumper things, but I've done things that — I've just done many dumb things in life.

I mean, that is — all I have to do is look at our portfolio. I mean, four out of five of our — at least four out of five of — of the decisions I've made have not been anything out of the ordinary. But —

BECKY QUICK: But he was OK when you told him —

WARREN BUFFETT: Yeah.

BECKY QUICK: — that this was — OK.

WARREN BUFFETT: Yeah.

BECKY QUICK: So he's on board. None of this is news to him.

WARREN BUFFETT: Yeah.

Bill, unlike me, more or less, I think wants it to end when — when he dies. Then of course he doesn't know when he's —

BECKY QUICK: His foundation?

WARREN BUFFETT: The Gates Foundation.

Whereas, I hope that my kids live a lot longer than — than I do, and I hope all three participate. And I think all three will be better off for doing it.

But that — that's not a decision that was made — well, when Susie and I started giving them — I think we moved it up to, maybe, 30 million a year, and —

BECKY QUICK: To the kids' foundations?

WARREN BUFFETT: No, actually to —

BECKY QUICK: Oh.

WARREN BUFFETT: — to — but — to their foundations. I don't remember the exact figures at all.

But we gave it to them when we were 99 percent sure that — that they — well, we knew they were willing and — and in some cases, in a certain way, eager, to do things for other people.

They — they've had a good life. They haven't — they haven't —

Well, they've followed that rule that somebody told me a long time ago, but — which I get credit for, but I didn't think of it myself — which is that if you're the child of some very rich family, that you should have enough — you should be given enough to do — to do — to do something, but not enough to do nothing.

BECKY QUICK: Right.

WARREN BUFFETT: And that's — that's exactly what's been going on at an increased scale, but —

BECKY QUICK: Just to —

WARREN BUFFETT: But I have to step it up now, because, you know, at my age, you know, the probabilities really get against me.

So that the last will I wrote is — is very likely to be my final will. Whereas the wills that I was writing when I was 30 or 40 or 50, I knew they would change.

BECKY QUICK: Right. Let's — let's talk about that.

2.    21:23 - Accelerating the pace of donations

BECKY QUICK: The other thing that you're announcing in this is that you would like to see the money go out at an expedited — and the shares go out — at an expedited rate.

To this point, it had kind of been 10 years after your death, you thought the shares would all be disbursed to charity.

Now you're saying that you would like all of those shares to be disbursed eight years from now, by the end of 2034.

WARREN BUFFETT: Yeah.

BECKY QUICK: What — what changed your mind on that, and what does that mean?

WARREN BUFFETT: Well, it certainly means that I had — I had two purposes in — in all the philanthropy, and — and in particular with all — essentially, a hundred percent of my money in — in Berkshire —

You know, that's my painting, and — and I like the painting, I like the people associated with it, and it's been refined over time. You know, I've added an (inaudible) over here or something. (Laughs)

And — and I don't think — I don't know of 10 people in the United States that I would trust to hand it over to. I don't know —

BECKY QUICK: Your company? You're talking your company?

WARREN BUFFETT: The company.

BECKY QUICK: Right.

WARREN BUFFETT: I don't know of five people, and I know a lot of people. And — now I have a very high standard in terms of what I'm looking for in — in that person. And clearly, we've — we found him with Greg Abel.

So — and that becomes more evident by the day. Even this year, there's been added things that, so —

BECKY QUICK: So you don't think you need to hold on to the shares, or have your family have voting power over those shares, for as long because you think Greg Abel is —

WARREN BUFFETT: He is the choice. The only question is — is — he's not immortal, either, you know.

I mean, you always have this mortality question, you know, and nobody gets away from it. I mean, it —

People can be in marvelous health, or seem like it — and you know they —

Who died the other day? Wasn't he —

BECKY QUICK: Lindsey Graham.

WARREN BUFFETT:  — 71 or something?

So there's an enormous variety and variation from — from being lucky to not being lucky.

And I've — that's — that's the bet I made with Greg.

I do not have a list of 10. I mean, it isn't — I don't have 10 kids, either. But — even — I don't have a list of three.

BECKY QUICK: In terms of who you would trust the company to —

WARREN BUFFETT: Yeah.

BECKY QUICK: — at this point?

WARREN BUFFETT: Yeah.

Now, I've got directors that I trust to be imbued with the — the — they like the concept of Berkshire Hathaway. They would like to keep it going.

So I've got the right group that's the intermediary in — in making that choice.

But things don't always work out perfectly with the world.

BECKY QUICK: So your — your hope is that the shares will be dispersed by the end of 2034, just over eight years from now — eight and a half years from now.

But I take it if — if you're not here and the kids are the one making the choices, you would leave it to their decision making at that point?

WARREN BUFFETT: Yeah. And eight — eight years from now, you know, my daughter will be 80 — very close to 81.

You know, another will be seventy —

And it's not just a question of mortality. It's a question of keeping your marbles, too. You know, and —

BECKY QUICK: (Laughs)

Have they heard you say it like this?

WARREN BUFFETT: Well — well, I mean — I'm losing marbles — (laughs) — at this point.

I accumulated marbles for a longer time than I deserved, and that's just a matter of luck.

I mean, I've —  I've seen so many managers of our companies that — well, I think I've mentioned it at a few annual reports — annual meetings, I mean. We had guys cutting out paper dolls, and there's you know, and their assistants covering for them.

BECKY QUICK: OK, just to — to clarify at this point, you are saying this of your right mind while you're making these decisions, correct?

WARREN BUFFETT: I hope so. (Laughter)

But actually, I wrote the will a couple years ago, so that —

And I will not knowingly — I mean, I will not change that will, except for extremely important decisions, because there's no question that I had my marbles when I wrote it.

3.    25:40 - The family foundations

BECKY QUICK: OK, so let's talk a little bit about what happens now, because you've talked about how this is really your children making the decisions, but in the announcement that you're putting out now, you increased each of your children's foundations, the amount you're giving them, by about 50 percent —

WARREN BUFFETT: Yeah.

BECKY QUICK: — from what you gave them last year.

WARREN BUFFETT: But I've increased the Susan Thompson Foundation, but —

BECKY QUICK: But it's the Susan Thompson Buffett Foundation that really is seeing the outsize gains in what they're going to be giving away.

They're —  they're — the amount of shares they receive this year is tenfold what it was last year. Basically they're getting all the money that would have gone to the Gates Foundation. Why?

WARREN BUFFETT: They're — they're getting all the money that would have gone to the Susan Thompson Buffett Foundation —

BECKY QUICK: — and then some.

WARREN BUFFETT: — if my first wife would have survived.

BECKY QUICK: Right. And then some.

WARREN BUFFETT: Yeah.

BECKY QUICK: But basically the payout they're going to be getting this year, in terms of what they can disburse, is four and a half billion dollars. That's how much the Gates Foundation got last year.

Why so much more to the STB Foundation than the other three foundations, relatively speaking?

Everybody gets more, but — but why that outsized amount?

WARREN BUFFETT: Well, the SCB Foundation is what — and I would say, totally, my wife would have — my first wife would have created — and I would have approved it.

I mean, we were on the same page in all kinds of questions that aren't even questions anymore, in terms of women's rights, civil rights. I mean, we were — we were in sync.

That — now she — she took an interest in listening to everybody's story. That would be the last thing in the world — (laughs) — I would want to do.

She — she saw every individual as an individual, but she also saw them as a group. I saw them as a group, and I had other things that fascinated me more.

BECKY QUICK: This money that goes through, is this what you will anticipate seeing from — from this point on? In years past, at Thanksgiving, you've given additional disbursements to the three kids' foundations.

WARREN BUFFETT: Yeah.

BECKY QUICK: Do you plan to do that again this year?

WARREN BUFFETT: Yeah, I'm almost sure I will. But — but regardless, the other — the other goes on.

You know, I mean — if I, you know — I could, I'm — I'm more probable to die before Thanksgiving than any of my three children, and probably the probability of all three combined. But — but —

But I also enjoy explaining why I take actions, just like I do in the annual report on Berkshire.

I — I've got a didactic streak, which my partner Charlie Munger had, and to us — the money wasn't — well, the money was important, in terms of what it could actually do for other people.

It wasn't important for what it could do for me. I — I have not denied myself anything in life.

BECKY QUICK: If something happens that you're not here to make these decisions, does it revert to what you talked about last year in your will, where there is a new foundation that is created?

WARREN BUFFETT: Yeah, there's a new foundation —

BECKY QUICK: And the three kids are in charge?

WARREN BUFFETT: Because it has to be — to be — because it does have slight variations. One being unanimous consent among the three for anything they do.

BECKY QUICK: Does the STB Foundation or the kids' foundations, do they have to spend the money in this fiscal year as was required of the Gates Foundation, or is this something where they can take their time and make their plans?

WARREN BUFFETT: They know — they know my views on it, but they can they can do what they want. But if they — if their wants get away from the basic principles far enough, you look at it again, but that isn't going to happen.

BECKY QUICK: Warren, you've spent most of your adult life thinking about philanthropy. How have your views changed over time? What would you like to see happen with this?

I think about the Giving Pledge and what you all did. What's your perspective at this point?

WARREN BUFFETT: Well, the perspective I have is out of eight billion people, you know, I may be one of the 10 luckiest in the world. (Laughs)

So I've been lucky and healthy to get to 95. I've been lucky in that the field that intrigued me, and where I had some natural ability, happened to be one that paid off in a way that was — nothing paid off like it.

I've — I could have been a great violin player, you know — anything else.

I — it requires more talent than I have, but a different form of talent. And — and fortunately, I got exposed, partly accidentally, to what I liked to do very early on, and that was just an accident.

If my father had been a plumber, I would not have — I would not have had the same advantage I had.

So I was incredibly lucky. And — and then, as life has gone along, I have seen how unbelievably unlucky some people have been.

And it is luck. I mean, you know, we — you know — we had accidents with — with the kids when they were young, and all kinds of things can happen. And they just didn't happen to us.

BECKY QUICK: All right, let's talk about a few other things while we have you, here.

WARREN BUFFETT: Yeah.

BECKY QUICK:  Is there more you want to say?

WARREN BUFFETT: Let me add one more thing on that, though.

I mean, the idea, the whole idea, of kings and queens and everything, where you pass along, for thousands of years, the ability to live in any manner you wish, you know, while you say "let them eat cake" — (laughs) — to the rest, it —

That — that is not the way the system should — would be, if I had my way of designing the world. And I can't -- I can't change the design of the world, but I can make — I can level at the edges.

BECKY QUICK: And those are the same values that your wife, Astrid, and your kids all have, too?

WARREN BUFFETT: A hundred percent. And I'm glad you mentioned Astrid, because she feels — she's as extreme in this field as you can imagine. And she — she's actually experienced more hardship in life than either Susie or I did, because she was — she's Latvian — and you know, and came over in a boat in Ellis Island, and — and didn't know who she was being assigned to. Lived in foster homes, all kinds of things.

So, the — the accidents of birth are just so extreme. And I've seen people that use those accidents to justify positions that are just ridiculous — (laughs) in my view.

And — and that's the reason for encouraging philanthropy.

You can't mandate it. It isn't even — it isn't philanthropy if you mandate it. But people, most people, are a combination, you know, of lots of good instincts and lots of not so good instincts — (laughs) — and including me. And the —

If you do things that appeal to their better instincts, they — they respond, sometimes.

BECKY QUICK: And by the way, your — your point with the Giving Pledge, when you founded that with Bill and Melinda Gates, was to encourage people to give to anything, but not to try and tell them what to do with their money.

WARREN BUFFETT: Exactly. Exactly. And —

And also decide when they would do it. I mean, a family that's got a family farm they've had for a hundred years, and they're — you know, within the family, they've all worked out and everything — they're going to have a different view toward capital.

They're all going to work hard, but they just — going — they're going to have a whole different view than some guy that is — is writing options on Wall Street.

BECKY QUICK: Yeah.

4.    33:45 - Buffett says he initiated big Alphabet investment

BECKY QUICK: OK, let's talk about a few other things that have happened, maybe since we got the chance to sit down last in May.

The first that I can think of is the massive position that Berkshire has — has developed and grown in Alphabet — in Google shares.

That's something that a lot of people have looked at and said, OK, this is Greg's mark on how he's going to be changing the portfolio. How did the Alphabet position come along?

WARREN BUFFETT: I initiated it.

I mean, I normally wouldn't give you an answer on something like that, but I will because — but we — I am not doing anything that he doesn't approve of. He's not doing anything I don't approve of. We talk all the time.

He's, you know, he's — well every day, I mean. And — and — but it — he is the decider.

And getting back to Alphabet, or Google, it's probably number five or six.

BECKY QUICK: Well, I thought it was number three if you consider the 10 billion dollar private placement that would go along with that, because that would put it north of 31 billion dollars.

WARREN BUFFETT: Yeah, but we — we've got — we've got the Burlington Northern railroad —

BECKY QUICK: OK.

WARREN BUFFETT: —  which is certainly worth far more money than that.

BECKY QUICK: OK, so you're counting — you're counting fully owned companies.

WARREN BUFFETT: Absolutely. You know, I mean, we are always making the choice between whether we'll buy marketable securities or the company. We look at them the same way.

There's — there are some minor exceptions to that. We can't — we can't set dividend policy, for example, if we don't own it.

But the chances of those being material — the important thing is to buy a good business and to buy it on the right terms, and to get the right person to run it.

BECKY QUICK: OK, but you've quickly grown a north-of-thirty-billion-dollar investment in Alphabet. That puts it, in terms of those companies that you own pieces of, behind only Apple and —

WARREN BUFFETT: American Express.

BECKY QUICK: And American Express. So Coca-Cola would be smaller. Bank of America would be smaller.

WARREN BUFFETT: Well, it's — it's kind of close, and — and it—

But — but if you take Coca-Cola, which we've owned, you know, 45 years, whatever it may be — you know, we — we don't have a thing to do with running that business, and — but it's a very good business.

And I — when I say a very good business, I mean something that you can expect to own, earn high returns on capital, over a long period of time.

Now the question is, when you get into Google, is — or any of the AI companies — you're putting out huge amounts of money. And I can put huge amounts of money into government bonds and get, you know, 20 or 30 or billion dollars a year, in terms of payments from them.

So, a good business is one that earns a lot more than — than — and has prospects of continuing to earn a lot more than the — the returns on — on essentially riskless investments, which you could define as Treasurys.

But if you take something like American Express, you know, there are — most of the banks earn 13, 14 percent on — on capital.

If I asked everybody to guess what American Express would — they would — they would — they would come up with some figure similar. But it's so different that it earns 30 percent-plus on capital, and does not incur more risk in doing so than the banks that earn 13 or 14 percent.

And the — the trick in life is to find —I mean, in investing — is to find businesses that are going to earn high returns on capital for an extended period of time.

And that's what happened with — with Berkshire for a long period of time.

A long period of time gets to be very important because those doubles later on are of very big numbers.

But Charlie — Charlie Munger — my partner for many — for decades — he just — he just pounded the idea that it wasn't a good business just because it — it was doing sexy things, or whatever it might be.

But if it wasn't earning real cash that it would — or be expected to do it in a very short period of time — and — and to be able to distribute it if it wanted to — better yet, if it could reemploy it as a business —  it was even better than one that had — had the ability to earn high returns, but you couldn't deploy the excess capital of those returns.

BECKY QUICK: OK, let me ask you, though.

Forever, people have thought of you as somebody who doesn't invest in technology. And by the way, you've described yourself as somebody who doesn't invest in technology.

Obviously, the biggest position in the Berkshire portfolio is Apple, a position that you put on. But at the time, you called that a consumer company.

Google, you just called an AI company. So what happened?

WARREN BUFFETT: Google — the real question with Google and all of its competitors now, because they're all laying out hundreds of billions. I mean, they —

BECKY QUICK: They're big capex spenders.

WARREN BUFFETT: So they — and yeah — and that — and that's real money.

I mean, that's — if our railroad were to lay out 300 million — or billion — or 200 billion, you know, that — that kind of money wasn't even put in the railroad business, you know, in terms of developing it.

So — and — and they are — that's the game they're — they're playing now. They weren't playing that game with — with computer software.

BECKY QUICK: No, so when they were asset light, you didn't like them, and the markets loved them. Now that they are —

WARREN BUFFETT: I made a mistake.

BECKY QUICK: — spending heavily on capex, a lot of shareholders don't like them as much, because they don't  —

WARREN BUFFETT: I think they're more likely to be a winner, based on their record, than — than probably 90 percent or — or 95 percent of what gets merchandised through Wall Street, because Wall Street is just interested in whether they can sell something.

And I can't recall a report on Wall Street that really gets into the internal rates of return that a business is actually earning. That — what's more important than what a business is earning?

But they ask all these questions about what'll happen next quarter, or you know, or it's just — it's ridiculous.

But, you know, investing is — is coming up with —

Well, probably the — close to the most successful long-term investor was — was Rockefeller. And — but look at what oil and gas has done over 150 — or a couple of hundred years.

So he kept compounding at a very good rate. Not as good a rate as GEICO would have achieved in its early years, because it's easier to do when you're small.

Getting to do it when you're large is — you got the whole world looking at you, trying to figure out how — (laughs) — how — how come those guys are doing it and we're not doing it?

BECKY QUICK: Why do you like Alphabet above all others, and what made you initiate this position? What was the eureka moment?

WARREN BUFFETT:  I — I would say that I don't like it as well as at least four or five other businesses that we own.

BECKY QUICK: Other than Apple, the railroad?

WARREN BUFFETT: Well —

BECKY QUICK: American Express?

WARREN BUFFETT: You're not going to get the whole portfolio out of me — (laughs) — but — and of course —

BECKY QUICK: But you like it enough it make it a huge position.

WARREN BUFFETT: I like — I like Berkshire that way. I mean, Berkshire earned high returns on capital without — without — I'm not talking about using the tricks of leveraging or that sort of thing — I'm — and all that.

BECKY QUICK: But I'm talking about why Alphabet versus the other Magnificent Seven, or the other, you know, hyperscalers, who are doing the same thing, spending a lot of money —

WARREN BUFFETT: Yeah.

BECKY QUICK: — Amazon, Microsoft, whoever it may be — to try and win in this position of AI?

WARREN BUFFETT: Yeah. Well, I don't want to sit around knocking the others. They don't have any choice. You know —

BECKY QUICK: To spend like this, you mean?

WARREN BUFFETT: Yeah. They're now playing a game, in many cases, where they — or in some cases — where they're playing a game they don't want to play.

IBM would have loved it if they just kept playing the game that IBM was playing in the 30s or the 40s or the 50s and the 60s, you know. And then somebody came along with — and said, we'll get a better result for you, achieving the objective of all the customers you have, because that's all you're going to have is — you either have happy customers or you don't have customers, over time. And the customer is not dumb.

Wall Street can be very dumb, and in terms of — they — they can dream. But a guy with a grocery store can't dream. I mean, I worked at my grandfather's grocery store, and we saw — well, we had one store in 1869 and we had one store in 1969 — (laughs) — and — and other people were earning high returns on capital, some on a national scale. A&P, which people don't associate with anymore, in the 1930s, I mean, they were — they were number one — enemy number one — of trustbusters in — in Washington. And they — they had a very, very, very good hand, and that hand disappeared.

BECKY QUICK: So it's a different game.

WARREN BUFFETT: Yep.

BECKY QUICK: And you like this game? You understand this game more than you understood the game they were playing before? Is that what you're saying?

WARREN BUFFETT: Yeah, well, there's all kinds of games I don't understand. Sure.

BECKY QUICK: Yeah. But this game —

WARREN BUFFETT: Why — why should I expect to make money in all kinds of things I don't understand? And —

BECKY QUICK: But that's what I'm getting at. What do you understand about this game at this point? Because most people would say he's never going to buy any technology stocks, and I think you've said the same thing yourself in the past.

WARREN BUFFETT: Yeah, but I've done it. And actually, one of the most successful companies I was associated with, going back to 1958.

BECKY QUICK: Right.

WARREN BUFFETT: We started a company called Data Documents. We started Data Documents because a couple of pals of mine read in the paper that IBM had settled a antitrust suit by divesting. They had to divest 50 percent of the capacity of what was their best business. And everybody knew it was their best business.

Now, it so happens it ran out after 10 or 15 years, and I — I knew some of the people that caused it to run out.

But if you have a wonderful business, you are going to be subject to attack. So you — it's not a question of whether it was wonderful yesterday. It's — it's — the question is: how long is it going to be wonderful?

BECKY QUICK: But that's what I think I love. People can try and pigeonhole you and say they know who you are and what you do. To me, it looks like you're 95, turning 96 next month, and you are still changing and following the game.

WARREN BUFFETT: Well yeah, but it's easier for me — if somebody came along — I'm just trying to think of what it might be — better candy — that would have more predictive value to me than if they came along and had a better way of — of doing something that a hundred of their competitors would sneak in the — in the plant at night to see how — exactly how they got it all done.

5.    45:48 - Apple faces tough competitors

BECKY QUICK: Let's talk about your largest position, Apple.

You told us that you were thrilled with everything that Tim Cook had done. I don't know how well you know [incoming CEO] John Turnus at this point, or what you think the company's doing.

You still have a lot of faith in Apple?

WARREN BUFFETT: Well — I — there was no move they could make, that would replace Tim, that I would have liked. (Laughs)

I mean, you know, if you got somebody, you know, Stradivarius playing the violin for you, I mean, don't — don't spend the next 300 years looking for another one. I mean, you've got one already.

And — and of course, Wall Street thrives on the idea that convincing you that — that — that if you just listen to them, they've got something that nobody else has. Well — which can't be true. I mean, it's ridiculous.

But — but it works because — well, in general, it works because the — America has been a wonderful place to invest money. And the Dow industrials, when I bought my first stock, had just crossed a hundred — 100 — and now it's 52,000 or something — and you've got dividends in between and all kinds.

Well, I mean, the village idiot — (laughs) — could have made it from that point forward. And so I've been in the right game.

If I'd been in — in wheat speculation, I mean, wheat — wheat's gone from, you know — I don't know whether it's gone from three dollars to five dollars, or something, over 200 years. And it — it's a pretty — it's a very simple business, as long as you keep remembering that it's simple and that making it complicated can — can — well, it's just crazy. At that point, you're gambling.

BECKY QUICK: But do you still like Apple?

WARREN BUFFETT:  And the people — people's enthusiasm for gambling is enormous.

BECKY QUICK: You've talked about that —

WARREN BUFFETT: Yeah.

BECKY QUICK: — over the last many years, probably since COVID.

But you still like Apple? Back to the point.

WARREN BUFFETT: Yeah.

BECKY QUICK: Yeah.

WARREN BUFFETT: Yeah.

And I know more about Apple than I knew many years ago. But on the other hand, if you're — if you're Apple, you've got very, very smart people all over the world shooting and trying to figure out how to make sure that — that Apple's future — the future isn't as bright as the past.

And look at — look at the car companies. I mean, Henry Ford owned the car business for 30 — for 20 or 25 years, and he —  he did — he brutally integrated like you cannot believe. He got — drove costs down. He got the cost of the Model T down, I think, to $285. And he always was decreasing prices while increasing wages.

BECKY QUICK: Right.

WARREN BUFFETT: So he was — he was — but he also was a little nuts in some ways, and — and that did him in, finally, when he — when he converted over the Model A, and General Motors just came racing by.

And — and my friend Charlie Munger thought that General Motors was the — was going to be the dominant company. Who could imagine attacking their dealer fleet and everything they had going for them? And — and — you know.

You've always got somebody shooting at you.

BECKY QUICK: To that point, Apple brought a lawsuit against OpenAI just last Friday night — just last week — and basically accused OpenAI of trying to steal trade secrets.

WARREN BUFFETT: I would say most — most companies would love to try steal trade secrets. They wouldn't love getting caught.

But if you really could dig deep into the hearts of managers, they'd like to steal secrets. (Laughter)

Wouldn't you? I mean, if you had a business and you were struggling along, and the guy next door was making money?

I — I had a half interest in a Sinclair filling station at 30th and Redick in Omaha when I was in my early 20s, and I'd been to business school and knew all these things. The guy next door had the Phillips station and he was pumping 30,000 barrels — 30,000 gallons — a month, and we were pumping 15,000 gallons  a month.

So I said we're going to wipe this guy off the face of the earth. And you know, a couple years later, we were selling 15,000 and he was selling 30,000 and we gave up, and we closed up. And I think he's still operating.

It's — people are playing for keeps in business.

6.    50:40 - IRS sues Coca-Cola over taxes

BECKY QUICK:  Yeah.

We talked about Coca-Cola briefly, the long-time position you've held for more than 45 years.

There is a major lawsuit —

WARREN BUFFETT: Yeah.

BECKY QUICK: — with the government that could look at action, I believe, going all the way back to 1996 with Coca-Cola. The government — the IRS — has said that they owe them —

WARREN BUFFETT: Yeah, it's 20 —

BECKY QUICK: Twenty billion dollars, roughly.

WARREN BUFFETT: Yeah, of which they paid —

BECKY QUICK: I think they put 10 billion something —

WARREN BUFFETT: They made a deposit of close to 10 billion.

BECKY QUICK: But we — we're going to hear about whether — the activities in this has to do with overseas — their overseas business — just some of the accounting that goes back and forth.

Coca-Cola says that they thought they had an agreement in 1996 that stood, with how they should behave. The government's now looking for more money and saying that's not the case.

It's not just Coca-Cola that's riding on this, though. There's a lot of other American businesses who are doing the same thing.

WARREN BUFFETT: Well, a huge number, which is why the derivative effects of the suit could be the biggest in American history.

BECKY QUICK: What do you think of this? And with the understanding that you are a Coca-Cola shareholder, a large Coca-Cola shareholder, was this an overzealous government looking for ways to raise more money? Was this a company that performed badly — or that behaved badly?

WARREN BUFFETT: I — you know — I've got a dog in that fight, so — (laughs).

BECKY QUICK: So you don't want to —

WARREN BUFFETT: So no, that's why we have courts.

BECKY QUICK: Yeah. So you'll wait and see what happens with it.

WARREN BUFFETT: Yeah. No —

BECKY QUICK: I take it you're watching this closely?

WARREN BUFFETT: Yeah.

Paying the extra money won't break Coca-Cola any more than anything I can think of would break Berkshire. I mean, I — I look at — all I think — do — is think about the downside. The upside will take care of itself.

BECKY QUICK: Right.

7.    52:25 - New Fed Chairman Kevin Warsh "will do the best he can"

BECKY QUICK: We also have a new FOMC chairman, Kevin Warsh, who is taking a look at the economy this week. He's going to be — or is speaking to — in front of Congress.

A lot of questions about what he'll do with the markets — what he'll do with interest rates, and what that, in turn, means to the markets.

You, in the past, have spoken about how interest rates are gravity, and it determines where stock market prices are headed.

WARREN BUFFETT: Right.

BECKY QUICK: So, what do you think happens? What are you betting?

WARREN BUFFETT: I don't know what he'll do, but I would say that — that job is so complicated. I think the other day he was quoted as saying, you know, that they have 950 economists where they could use about 10.

I admire him for taking on the job. I think he will do the best he can at achieving the job he was assigned to do, which is, you know, 2 percent inflation while maintaining maximum employment.

And my guess is that — that just like some of the others that have preceded him, not all of them, but — but he would read that every morning, you know. I mean —

BECKY QUICK: The dual mandate of the Fed.

WARREN BUFFETT: The dual mandate.

And he doesn't — he — he knows he can't be perfect at it. And just like I know I couldn't be perfect at taking people's money and earning super returns on it.

But my guess is that people were right in realizing that I cared about what happened to their money. And I — I would say that — that Warsh has — he cares about the country.

BECKY QUICK: OK.

WARREN BUFFETT: And I think that's been true of a good many. It doesn't mean their decisions are always great, but — because sometimes the decisions are so tough. I mean, imagine Paul Volcker getting you know death threats all the time.

And — and others just think they know more than they do.

BECKY QUICK: But you think Kevin knows a lot and is —

WARREN BUFFETT: I think he's a very — yeah — I think he was a good choice.

BECKY QUICK: OK.

WARREN BUFFETT: Which probably means the president will be mad. (Laughs)

Future presidents will be mad at him because future presidents are looking at the next election, and he's not supposed to be looking at the next election.

BECKY QUICK: Right.

8.  54:42 - "It's tough to find values when everybody is preferring gambling"

BECKY QUICK: You, obviously, don't come out and make calls on where the market's headed at any point in time.

WARREN BUFFETT: No.

BECKY QUICK: But you do make calls on market behavior and what makes sense to you and what doesn't.

Do you think the markets make sense to you when there's so much riding on AI?

Earnings have been very strong. The consumer looks like it's held into this point. But how do you view it?

WARREN BUFFETT: Well, I think there are — there are times when opportunities are just thrown at you so fast you can't — you know — it's unbelievable.

And then there's other times when you're very, very lucky if you find one thing in a couple of years.

And — and — it should always be that the — the latter is what prevails.

But — but since humans love to gamble so much, there's more money in — in actually cultivating gamblers than there are cultivating investors.

If — if somebody bought Berkshire 40 years — you know — 50 years ago, a guy would have made one commission. (Laughs)

And — and he should spend the rest of his time telling the client, "Don't do anything with it."

And that's just not the way — we can't expect that of humans.

But every now and then you do find people that — I mean, you find people who behave far better than other — other people.

BECKY QUICK: Fair to say, though, it's tougher to find values or find cheap opportunities —

WARREN BUFFETT:  It's — it's tough to find values when everybody is preferring gambling.

BECKY QUICK: Yeah.

WARREN BUFFETT: And from the standpoint of the state — we may have discussed this — but from the standpoint of the state, it's — it's sort of disgusting because the state needs money for all kinds of things, roads, schools, you name it, and they have found that they can clip people who are buying nothing but hope, selling them a payout, something with a payout ratio of 60 percent or something like that, and — and if they weren't doing that, they'd have to have the income tax higher.

BECKY QUICK: Right.

WARREN BUFFETT: It's a cynical sort of activity. And I think the less you get cynicism between the governing body and — and the people — the government — you — you don't want to — you don't want people to be cynical about their system.

But there's times when the system says, you know, just be as cynical as you want because this is what I'm going to do, baby. (Laughter)

9.    57:06 - Buffett has great faith in Greg Abel

BECKY QUICK: Let's go back very quickly — you touched on this — part of the reason that you want the shares given out over the next eight years is because you want your kids making these decisions.

But the other part is that you don't feel like you necessarily have to hold on to these voting shares of Berkshire for as long, because you have faith in Greg.

WARREN BUFFETT: Yeah, exactly.

And if we didn't — if we didn't have faith — well, part of the reason I'm around is because we didn't have sufficient faith in anybody. And we knew all kinds of people. But I mean, if you were talking about Tom Murphy, I mean, if I could have hired Tom Murphy —

But the trouble was they were all older, and all my friends were pretty much older. So I — I — I didn't.

It wasn't like I was in college and I could see who really had it, you know, who was writing crib sheets — (laughs) — on their — on their — answers on their shoulder — on their shoe cuffs.

BECKY QUICK: But you feel that way with Greg.

WARREN BUFFETT: I — I feel a hundred percent that way.

BECKY QUICK: Yeah.

WARREN BUFFETT: Yeah. I've seen him in a lot of situations — a lot of situations.

I felt that way with Charlie. I felt that way with Tom Murphy. I mean —

But you know — nobody — nobody expects you to pick out, you know, 25 husbands and have them all work out. (Laughs)

And just finding one is pretty tough, I mean, that's the right sort.

BECKY QUICK: Yeah.

WARREN BUFFETT: And then you make mistakes.

10.    58:44 - Buffett broke a leg

BECKY QUICK: Warren, how are you feeling today?

WARREN BUFFETT: Well, I — you know — I broke a leg — (laughs) —

BECKY QUICK: What happened?

WARREN BUFFETT: — a few weeks ago. So — which is really — you know — I've been very lucky on that sort of thing.

I haven't broken a leg in — in my life until now. (Laughs)

But — but — I — I feel good. I'm glad I was born.

BECKY QUICK: Yeah.

WARREN BUFFETT: And I'm glad I wasn't born in some other country. And I was glad, initially, that I wasn't born female. And — I mean, all kinds of things.

I mean, I — I really won the lottery when I came out.

And other people think they won the lottery if they've got a trust fund set up for them that takes care of them for their whole life, and, you know, five generations thereafter.

But — but I just wasn't raised that way, and I think it's a good thing I wasn't, and I haven't raised the kids that way — or more important, Susie didn't raise them that way.

BECKY QUICK: Great. Well, I want to thank you for your time today.

WARREN BUFFETT: Well, thank you.

BECKY QUICK: I appreciate it.

WARREN BUFFETT: And we're interested in business. (Laughter)

BECKY QUICK: Thank you.