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Gates/ Buffett on Pandemics


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I thought some here might find this interesting. I went through my library of annual meeting and interview transcripts searching for discussions on epidemics and pandemics. What follows are the findings with the exception of the most recent CNBC transcript. I think that one should be readily available online to everyone and would have made this post too long in my opinion.



MAY 2017

BECKY QUICK: Welcome back to this special edition of "Squawk Box," where we are live in Omaha, Nebraska with Charlie Munger, Warren Buffett and Bill Gates. We are calling this a meeting of the minds and trying to tackle some of the big issues facing our nation and our world today. We've already spoken about health care here in the United States and the tax reform that's under way. Bill, I thought we could talk a little bit about the budget process because this is something that matters to you at the Gates Foundation. You spend, what, about $5 billion a year in programs trying to improve people's lives? I think there's something like 122 million children's lives that have been saved through vaccinations and nutrition provided by the Gates Foundation over the years. When we start hearing things about cuts in the State Department, an 18% cut to the State Department budget, what does that mean? What would happen to the projects that you have worked on over the years?

BILL GATES: Yeah, what's amazing is the success that our foundation, working in partnership with the U.S. and others has had, at improving health. And that helps stabilize these countries so that they can get out of their poverty trap. It also lets us see any health problems like a pandemic coming out of those problem countries so we can protect Americans from that. There was a proposal that the State Department would've been cut 28% which, for these health related things, would've been a much bigger cut. And so we're glad that, you know, and looks like the Congress won't make those cuts because they don't think we're so weak that we need to withdraw the malaria bed nets or the HIV medicine. I'm very lucky that I get to go and see the great success and then, you know, say to the U.S. taxpayer, "Hey, we are performing miracles here." 122 million children's lives saved, over ten million people who are alive because we helped provide the drugs, the HIV drugs, the PEPFAR program that started under President Bush. So I think we're strong enough to help stabilize these countries, see the pandemics early. And I think that Congress will maintain these investments. So I'm, you know, I think that's very smart.


MAY 2013

BECKY: Yeah. Joe, you have a question as well?

JOE: (LAUGH) Yeah. I— I mean, as long as— as— Gates is CI— there are big issues that I'm thinking about. And I— this is something that was in the news last week. I'm just— I'm going to ask it a certain way, Bill. Bioethics. Is it keeping up wi— with technology? And I'm talking about the Chinese scientists have put a bird flu together with the swine flu. Do you think about technology and— and things like this and— and I mean, you— you talk about a brave new world that we're in. Are— are we safe? Can we trust all these different countries though, to abide by— you know, prudent science when we've got this stuff— at— at our disposal? I mean— a very contagious bird flu virus would not help anyone.

GATES: Well certainly, the whole area of genetics, though, give us a lot of ethical challenges. And if you want to think about a nightmare scenario that's even worse than— a nuclear bomb going off— bio-terrorism is the area that you— you've got to be concerned. Because, you know, the right sort of construct— either intentionally created or unintentionally created, could do so much damage.

The— in the scientific community, there's been this debate about, should— should scientists figure out which mutations would cause, say, a flu to get worse? And then they can see if that's starting to happen and— be more alert. Or should they not try out those things because that information might be— get into the hands of somebody who would misuse the information?

And that is a very tough discussion. Lots of reasonable scientists have disagreed— about the— the right approach there. But— it— it is an area, you know, we're lucky that we haven't had a bad flu pandemic— and the fact we had a scare and it wasn't that ba— that bad, made us get a little more prepared. But we're— we— we would still— it— it would still be a huge problem.

BECKY: Warren, you've spent a lot of money trying to prevent nuclear— bombs from getting into the wrong hands.

BUFFETT: Yeah, and nuclear, chemical and biological. I mean, there are per— people in the world that wish ill on— on— theie neighbors and— and— and— would like to— kill as many people as possible. And— the choke point— is not so much knowledge anymore, with knowledge spreading so much, but— but materials. And— and— I think we've been very fortunate and probably quite vigilant, you know, since 1945 when we unleashed the atom— in avoiding it. But the biological, you know, as Bill says, is probably more of a danger than— than the nuclear.

BECKY: We're going to— go to a quick break right now. And— Joe, I think when we come back, we'll have some final thoughts from Warren Buffett and Bill Gates



BECKY: I read the Swiss release, and it said that they are doing this because they think that they can get more for their money in other arenas. I think their goal is to get more than 14 times. Right, 14%., 14% for the investment they're putting in. What's your reason for why you take it on?

BUFFETT: I think we'll make money. It's very simple. Now, if there's something terrible, pandemic or if there were some incredible terrorist attack that resulted in mortality in the United States, increasing by a dramatic amount because this is U.S. life business, it's spread all over. I t's not just a few policies. It's millions of policies. Probably hundreds of thousands, certainly. But anything that would change the mortality rate of the United States dramatically upward for any sustained period would be bad for us on this. But if mortality is more or less normal, and particularly if there's some improvement due to medicine over the years and so on so that mortality improves in the country, then we've got a decent, long-term deal. But they've got their own reasons in deploying capital in other areas. It can be a good deal for both sides.



Buffett and Gates at Columbia 2009

QUESTION: Hi. My name is Josh Porter. I'm a first-year from North Reading, Massachusetts. It's an honor to have you both here. So we just went through the worst financial crisis of hopefully all of our lifetime. And I know it keeps a lot of Americans up at night, you know, worrying about their future. What, if anything, keeps either of you up at night?

BUFFETT: I try to live my life so nothing keeps me up at night. [APPLAUSE] I don't like to sound, you know, like a mortician during an epidemic or anything, but last fall was really quite exciting for me. [LAUGHTER] I don't wish it on anybody, but there were things being offered. There are opportunities for us to do things that didn't exist a year or two earlier. So I really don't -- I don't want to be in a position where I am leveraged or something of the sort that does keep me up at night. I did not worry about the ultimate survival of our economic system. We were messed up. Wasn't any question about that. But the plants haven't gone away. The cornfields haven't gone away. The talent of the American people hasn't gone away. The innovativeness of the next Bill Gates hasn't gone away. This country was going to do fine. I knew that. We just had to get things straightened out. And we're well on the way to having that happen.

BECKY: Bill, you mentioned -- [APPLAUSE] You mentioned before that you called Warren and he said, ‘Yeah, we should maybe be a little worried.’ Did you stay up late that night worrying about it?

GATES: No. The financial system, fortunately, good leadership has a lot of self-correction built into it. I think there are a few things that could surprise us that are negative. You know, big terrorist event sometime in the next 20 years, that would be a big negative. And a pandemic, which we're actually having in terms of the rate of spread of a new flu, one right now. And fortunately, its actual impact is very modest, way less than any such thing. So you have to keep your eye out for a few outliers like that. Those are the two that I would point to. But overwhelmingly, the rest of the system, you know, there is self-correction built into it. The long-term thing that I don't lose sleep over but I worry about is that we do have our education system, particularly the K through 12 part, not improving as much as we should. And it's an important system for opportunity, it's an important system for the economic strength of the country, and since it hasn't improved that much, that's a bit scary and needs a lot more attention.

BUFFETT: Becky, if you had a wonderful farm and you knew the next 50 years there would be five droughts but there would be 45 good years, I mean, you would not become paralyzed thinking about the five drought years. You would recognize that you've got a system that works very well over time, and that's our American economic system.

BECKY: Since we just had the drought year, does that make it less likely for the --

BUFFETT: No. If you study statistics at Columbia, you'd recognize that -- [APPLAUSE]




Philllip Durrel 2008 meeting and 2009 Press Conf Notes

Q. Do you have any examples of unusual insurance risks written by Berkshire and how does Ajit Jain (CEO of National Indemnity and star underwriter) do it?


A. We start with historical data and then figure out what else could go wrong. For example historical hurricane data has relevance but we also assess how climate change might affect it. We are pessimistic. We have insured against a pandemic and would insure against a swine flu pandemic if someone asked us but I don't think they'd like our price! We've insured A-Rod against injury, Mike Tyson against dying within 2 years when he was in his mid-twenties and a Pepsico (NYSE: PEP) competition that had a $1 billion payout. Munger - Ajit has a considerable knack for it and we could not put anyone in Ajit's place. Buffett - If Ajit's on holiday we don't write the policy. If we don't know that we have an edge we won't write.

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