Warren Buffett Speech to University of Georgia Students

Well, good morning and welcome. You're a nice crowd, you certainly got quiet quickly. That surprised me. Can you hear me all right? There in the back? Well, for business school, you know it doesn't get much better than this. Having the world's greatest investor come to your campus is quite an honor.

Warren Buffett is Chairman of Berkshire Hathaway, a holding company whose investments range from GEICO Insurance, to American Express and Coca-Cola, to Borsheims jewelry store in his hometown of Omaha, Nebraska.

Mr. Buffett has been described as 'the god of value investors' and 'the Michael Jordon of the investing game.' He began his first investment partnership in the mid-1950s with $100 of his own money. A few years later he began investing in a struggling Massachusetts textile mill called Berkshire Hathaway. Through Berkshire he started putting capital into other businesses, chiefly insurance, which generated cash streams for more investments which have done very well indeed as we all know.

From a share price of about $18 in 1965, Berkshire today trades around $69,100 a share. Think I'm going to go out and buy 500 shares. Over time the company has annualized performances more than double that of S&P 500, and Berkshire today is worth more than $100 billion. But Mr. Buffett is known as much for his unpretentious style as for his lofty success. He has become a champion of investors and is legendary for his aversion to corporate doublespeak. He is rare among CEOs in that he cheerfully admits his mistakes. Three years ago he wrote in his annual report that Berkshire would have done better if he'd simply had gone to the movies. There weren't very many years like that since 1965, believe me.

Berkshire was proudly, even defiantly absent from the dot-com hysteria of the last few years, and now that the bubble has burst as we all know, it's Warren Buffett who's having the last laugh. In his most recent letter to shareholders he wrote, quote, "We've embraced the 21 st century by entering such cutting-edge industries as brick, carpet, insulation, and paint." Try to control your excitement. You know, and personally from reading his letters, I mean it's just a joy. It's a business lesson in itself. I would encourage you, whenever you get an opportunity, to take one aside and read it carefully. You'll learn a tremendous amount.

His wisdom and insights are so valued that some investors buy a share of Berkshire stock just so they can hear him at his legendary annual meeting, or as he calls it, 'Woodstock for capitalists.' He doesn't make speaking appearances often, and we are extremely fortunate to have him with us today. Earl Leonard of Coca-Cola, and our distinguished executive in residence had a lot to with that, Earl, and we're deeply indebted to you for helping to arrange this. Thank you very much.

Our format today will be primarily questions and answers. Mr. Buffett will make some brief remarks at the beginning and then we'll move into your phase. We will have a microphone set up over here. We would like to come around- we're videotaping, so we'd like you to use the microphone, please. So go ahead and begin to line up over there to ask your questions. So would you please give a very warm welcome to the oracle of Omaha, Warren Buffett .

Warren Buffett : Testing. 1 million. 2 million. Great, okay. I came in from Nebraska today, and you're probably all familiar with us, mainly by our football team. We have those fellows with the big white helmets with those red 'N's on them. I asked one of our starters the other day, "What's the 'N' stand for?" And he said, "Knowledge." We make it tough on them though. I mean you don't coast through Nebraska just because you're a football player. They major in agricultural economics, and there's a two question final for all of the players. And the first question is, "What did old MacDonald have?" And they were giving that to one of our potential Heisman Trophy winners the other day. He started to sweat. Finally he brightened up, he said, "Farm!" The professor, delighted of course, you don't want to flunk a Heisman candidate. So he said, "Now," he said. "You're halfway home. Just one more question. How do you spell 'farm'?" Now the guy really starts to sweat, and he looks at the ceiling and he looks around. Finally his face brightens up and he says, "Ee-i-ee-i-oh!" So watch for that guy this year, he'll be dynamite.

I really want to talk about what's on your mind, so we're going to do a Q and A in a minute. There are a couple questions I always get asked. You know, people always say, "Well who should I go to work for when I get out then?" I've got a very simple answer, we may elaborate more on this as we go along, but, you know the real thing to do is to get going for some institution or individual that you admire. I mean it's crazy to take in-between jobs just because they look good on your resume, or because you get a little higher starting pay.

I was up at Harvard a while back, and a very nice young guy, he picked me up at the airport, a Harvard Business School attendee. And he said, "Look. I went to undergrad here, and then I worked for X and Y and Z, and now I've come here." And he said, "I thought it would really round out my resume perfectly if I went to work now for a big management consulting firm." And I said, "Well, is that what you want to do?" And he said, "No," but he said, "That's the perfect resume." And I said, "Well when are you going to start doing what you like?" And he said, "Well I'll get to that someday." And I said, "Well you know, your plan sounds to me a lot like saving up sex for your old age. It just doesn't make a lot of sense."

I told that same group, I said, "Go to work for whomever you admire the most." I said, "You can't get a bad result. You'll jump out of bed in the morning and you'll be having fun." The Dean called me up a couple weeks later. He said, "What did you tell those kids? They're all becoming self-employed." So, you've got to temper that advice a little bit. Play one game a little bit with me for just a minute and then we'll get to your questions.

I'd like for the moment to have you pretend I've made you a great offer, and I've told you that you could pick any one of your classmates- and you now know each other probably pretty well after being here for a while. You have 24 hours to think it over and you can pick any one of your classmates, and you get 10 percent of their earnings for the rest of their lives. And I ask you, what goes through your mind in determining which one of those you would pick? You can't pick the one with the richest father, that doesn't count. I mean, you've got to do this on merit. But, you probably wouldn't pick the person that gets the highest grades in the class.