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Interview Questions for Buffett


Buffett_Groupie
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I'm again fortunate to help CCTV interview Buffett during the AGM in Omaha in less than 2 weeks.

 

Surprisingly, I was asked to come up with new ideas and interesting questions for the interview.  Truth to be told, I've been a copycat all my life without any original and new ideas in everything I do: studying, dating, getting married, starting/running a business, investing, raising kids, winding/shutting down the business and retirement :-(.  As a result, being shameless and resourceful becomes natural to me to get by :-)

 

Hence, please help me by emailing me at ajcinc@sprynet.com if you have any burning/interesting/creative/original/out-of-the-box questions for Warren.

 

Your help is very much appreciated!

 

Here are two questions from me because I'm most stressed out dealing with teenage kids:

 

1) On giving career advice to kids: you mention people should always do what they love, but how to choose between one's passion and obligations?  That is, a kid may love music or dance, but the reality is the majority of musicians and dancers must take 2nd jobs to supplement their income to make a living.  Many kids dream to be astronauts, but the reality is there isn't enough space programs in the world to keep all the dreamers employed.

 

2) On teaching kids to work hard: nowadays many kids feel they have no reason to work hard as they don't have a sense of urgency that the world is very competitive.  How can parents inspire them to excel in academics, sports, arts and music by working hard instead of them spending all their spare time on Facebook and Youtube?  Jeremy Lin's a Harvard grad and plays for NBA, that's every parent's dream child (at least, Chinese parent! LOL :-)), but kids don't realize it takes a ton of hard-work, focus, perseverance and luck to do well in anything.  How not to become a tiger parent to inspire kids to work hard?

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My questions:

 

1) What do you think of the transfer of wealth from savers to debt holders as governments continue to hold interest rates low?

 

2) The internet has allowed emerging market workers to obtain high quality education and level the playing field with their developed market counterparts. Given the huge wage differentials, do you think wages in the developed world will be impacted?

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Guest longinvestor

My questions:

 

1. BRK's future depends more and more on the success of the operating companies with tuck-in acquisitions and capital investments from Omaha. Omaha likes to be unencumbered with the running of these companies. How are the shareholders protected against a) Capital being  mis-allocated resulting in partial or complete loss  b) Idiots taking over from the original owner-operators due to a poor leadership transition.

 

2. How are you transferring (your) superior capital allocation skills to your investment chiefs? And to your successor? And the large capital allocators? 

 

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My question.

 

Berkshire Hathaway is a conservative company and is designed to survive and even thrive in rough economic climates. This understood going forward what is your biggest fear for Berkshire, or what do you think is the biggest threat to it's continued success?

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I'll take a stab:  Based upon the discussion of how to analyze investments in your most recent annual letter and the fortune magazine excerpt, along with an analysis of other of your investments, some have posited that you use a 10% pretax earnings yield as a sort of short hand screening factor for potentially attractive investments.  Is this true?  If not what, if any, common handicapping factors you use before determining which potential investments deserve a closer look?

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I'll take a stab:  Based upon the discussion of how to analyze investments in your most recent annual letter and the fortune magazine excerpt, along with an analysis of other of your investments, some have posited that you use a 10% pretax earnings yield as a sort of short hand screening factor for potentially attractive investments.  Is this true?  If not what, if any, common handicapping factors you use before determining which potential investments deserve a closer look?

 

I like this question.

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If possible please ask him the following:

 

Here is a multi part question:  first, do you think Fairfax can return 15% a year; second, do you think Sears is a good or bad investment; and finally, have you ever worn a fake mustache and, if so, did you buy it at Sears and if not, and you found yourself in need of a fake mustache in the future, would you consider Sears for your fake mustache needs?

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Guest longinvestor

I have one more, 

 

As a shareholder, despite a large allocation of my net worth to BRK, I sleep well. This is because of several factors, the most important one of which is your own (nearly) 100% allocation to BRK. I like it that you “Eat your own cooking”. My decision to concentrate in BRK is largely based on this, given that the rest of corporate America appears to allow managers to live off of “other people’s money”. Risk taking is often at someone else’s expense. Looking out 20-30 years from now, how likely is that your successor, managers of the subsidiaries and allocators of BRK’s capital are going to be substantial owners of BRK? What kind of incentives are in place to suggest, encourage, prod them to buy BRK with their own money? Is the BOD thinking about this now? Will I be able to continue to sleep well 20- 30 years from now?

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