Pushkin too quick.

No, it's perfect, push kid stop, you got it.

The title of this show, Jacob, is Old Warren Buffett.

So when does a man get old?

I asked myself that every.

Day yet no today.

Yet We did a whole show on Young Warren Buffett.

He is ninety five years old as of this recording, so somewhere in there he became the man he is today.

To recap our last episode on Young Warren Buffett, this weird kid who had obsessive hobbies becomes investor in things that they called cigar butt companies.

He found tiny companies that were worth more than they appeared by their stock price.

Would buy that stock, wait for the pop, wait for the pop, and.

Then sell it.

And it's very different than the Warren Buffett we know today.

Yeah, and in the last episode, he buys a textile mill, Berkshire Hathaway, which then becomes his holding company for all these other companies you know, insurance companies, products, all sorts of.

That's the transition into the Buffet we know today.

He's not buying and selling.

By the end of the last episode, he's buying and holding.

And he's starting to think about these big American brands, Coca Cola, Gillette, Razors, Dairy Queen.

Right, you can't get more American than that.

So today we're going to talk about Warren Buffett's superpower that he really leveraged in this sort of second half of his life, and that is that he was now famous.

And this is the fundamental thing about Warren Buffett.

Regardless of the decisions he makes by himself late night when he's deciding which companies to buy, he is a man who is now famous for being brilliant, famous for being investor, famous for being rich, famous for being folksy and all American.

And that that wasn't just a result of his decisions.

That was the way he ended up making so much money, his fame the Buffet Premium.

We are going to start in nineteen eighty three because this is the first time that Berkshire Hathaway has an annual meeting that you might recognize today.

Annual meetings are traditionally very boring and back before the nineteen eighties, like no one went to them, like maybe some old retirees and some.

People work for the company, maybe a mutual fund manager trying to look busy.

Yeah, So famously, the Berkshire Hathaway meetings used to be in a loft in the mill in New Bedford, Massachusetts.

There's a story about like it sort of ending early because people just wandered away right meeting and turned Buffett eventually move the meetings to the National Indemnity Cafeteria in Omaha.

That's an insurance company owned And in nineteen eighty one only twenty two people showed up.

But in nineteen eighty three people were starting to hear these stories about this famous investor, Warren Buffett.

Right, he was close to being a billionaire at this point.

And a crowd one hundred, few hundred show up at the meeting, and Buffett gets this chance to do what he's done one on one for most of his life, which is to kind of hold court to talk about his philosophy of life and investing.

This is what you say, he's dispensing, folksy wisdom, dispensing folks say wisdom, yeah, yeah, yeah.

This is in the first graph of coverage of the Berkshire Hathaway shareholder meeting in Perpetuity.

Right, people are traveling across the country to see him.

Eventually, they would, you know, fill auditoriums and then arenas people would start to like dress up as Warren Buffett, they would read poems about him, seeing songs.

He became this American brand, just like the brands that he love, like Coca Cola and Dairy Queen.

So as part of this episode, I'm going to tell you the story of how Warren Buffett leveraged this fame.

But I also have in my hand a collection of folksy wisdom that I'm going to make you read through this episode.

You can shuffle them, you could pop them in whenever.

So you've handed me a stack of index cards, each of which has a pithy piece of folksy wisdom from Warren Buffett, little Buffet quotes.

I'm going to lay them out before me, and I'm going to pull from him as appropriate.

During the show Love It.

In the mid nineteen nineties, the annual Berkshire Hathway Meeting gets moved to the Colisseum in Omaha.

This is when they start calling it the Woodstock for Capitalists.

Ten thousand people show up, then twenty thousand people show up.

Ten years later, people are dressing like Warren Buffett, reading poems about him, you know, painting pictures of him trying to give him gifts.

They're buying products and souvenirs at the Berkshire halfway meeting.

Boks are Berkshire companies, right, They're buying seased candies and exactly, dairy Queen dilly bars exactly.

And at the center of it is Warren Buffett, just answering questions off the top of his head, you know, preaching this Buffet way right.

And rule number one is never lose money.

Rule number two is never forget rule number one love it.

There's this great quote that Buffett gives in the book The Snowball by Alice Schroeder that sums up his attitude this whole thing.

Right, I was at my best at giving financial advice when I was twenty one years old and people weren't listening to me.

I could have.

Gotten up there and said the most brilliant things and not very much attention would have been paid to me.

And now I can say the dumbest things in the world and a fair number of people will think there's some great hidden meaning to it or something.

This is insightful, but not so insightful that he stops pontificating.

No, because this was his new competitive advantage, huh, and it turns out a little bit of a curse.

I'm Robert Smith and I'm Jacob Goldstein.

This is Business History, a show about the history of business.

When we told the story of Young Warren Buffett, it was a story of, you know, a crafty man using research and math and hard work to make millions of dollars.

But Old Warren Buffett's a little bit of a harder story because he sort of starts with a billion dollars and just continues to get richer, right, And he is also a man at this point who is making his own weather.

He doesn't have to be smarter or faster.

He may be, but doesn't have to be because he is Warren Buffett.

And people just want to do business with him.

They want to be part of the magic.

So in the nineteen eighties, Buffet's already putting together this whole empire under the brand Berkshire Hathaway.

He has the insurance company generating cash.

He's got sees candy.

Have you ever had to seize candy?

I have, Yeah.

My step grandfather used to give me a box for Christmas when I was a boy.

Wid grhead parents too, and they are these lovely boxes of fancy chocolates.

Half of them are disgusting.

You just don't know which.

You don't know, right, And they could put a man You know what, I don't want the cherry.

Nobody wants the cherry.

I just want the like the chocolate tree.

No fruit, No, don't put the fruit in there.

But old people love it.

And it was a great successful American company.

Right.

He has a couple of newspapers at this point, he's got a bank, he owns some of ABC, the TV network, Geico insurance.

So he is very successful and very rich.

But this is the nineteen eighties, right, go, go Gordon Gecko.

Right, is that his name, Gordon Gecko?

Greed is good?

Right?

The movie Wall Street, it's all about financial innovations.

We're all going to be rich.

We're not all going to be rich in Wall Street for the record, Yes, the Wall Street people get rich.

Rich, yes.

Yes.

And that guy in Omaha, he doesn't really know what he's talking about.

Right.

He doesn't believe in borrowing vast sums of money.

He doesn't believe in junk bonds any of these things.

Right, you just can't buy and hold.

This is the nineteen eighties.

And this is also the era where finance professors are starting to put forward something called the efficient markets hypothesis, which you and I know.

Well, yes, yes, I mean it's basically the idea that in a big liquid market like the US stock market, the price of a stock today reflects the true value of the company.

And obviously that's not true every day, but in a simpler format means you can't do what Warren Buffett does.

You can't look at a stock systematically and on average beat the market.

Because the price is the price, and that reflects all the information.

And unless you have insider information, which Warren Buffett never claimed, essentially like you can get lucky.

And they would say at this point, the professors, and they did say Warren Buffett was just pretty lucky.

He made some lucky calls over the years.

Or also, as we talked about in the last episode, he came along at a time when the market was less efficient, and he focused on the even less efficient aspects of the market.

Right.

Remember in the last episode, he's like buying companies that are not even traded on the New York Stock Exchange at a time when fewer people are paying attention and so I think clearly those markets were inefficient and he was exploiting those inefficiencies.

Now it's the eighties, so not only is the market more efficient, but Buffett has to deploy so much money that even if there's some weird little bus company in New Bedford, Massachusetts, it's too little for it to move the needle for him, right, he has to be playing in this big efficient market.

Yes, and more than that, the finance professor should have realized one of the reasons why the market was efficient was Warren Buffett.

That variety showed, he showed and he closed those arbitrage gaps.

So absolutely, but you know he's still like people are looking at him.

Even his method of using mostly cash to like invest in whole companies and holding them just feels out of date in the nineteen eighties because this is the age of the leveraged buyout.

You don't use your own money, You borrow massive amounts of You rate a company that doesn't want to be sold, right, you use that debt as leverage to pry the company away from the owners.

Then you take that debt and you shove it down the mouth of the company, and then you take out a cleaver, and you chop up the company into little pieces and sell it all.

Yes, yeah, am I supposed to like that or not like it?

I have a complex emotional response to I don't know.

I just got carried away good into the nineteen eighties, right, And like Buffett would definitely borrow some money to close deals.

But like he thought debt was terrible, that you would be overladen with debt.

He once said, oh, I should have given this to you.

Right, once said debt is like gasoline makes the cargo faster, but it causes an explosion when you crash.

I mean, in that metaphor, debt seems totally reasonable.

Like I drive a car, I put gas in it.

I just don't crash, Just don't crash.

There you go.

And you know, Buffett like he was not a big breaker up of companies.

You know, he just wanted large and larger chunks of Coca Cola.

Grandpa, if you weren't willing to own a stock for ten years, don't even think about owning it for ten minutes.

Exactly, we're in Buffett exactly right.

I mean, Buffett wanted companies with a durable advantage, ones that could make money for a long periods of time, like a very Grandpa move, right, But the nineteen eighties were about to test Warren Buffett and this theory.

Why don't we take a break right now and we'll return with business history in a moment.

So we have the wild things Wall Street are doing, we have the leveraged buyouts, we have the finances doubting Warren Buffett, and the first crack really appears in nineteen eighty six.

So Warren Buffett gets a call from John Gutfrind of Solomon Brothers.

He's the CEO of Solomon Brothers.

And he's the guy in Liar's Poker, right, like classic eighties Wall Street guy.

Yeah.

And Solomon is a huge investment firm at the time.

They specialize in bonds, and they're part of this go go Wall Street thing in the nineteen eighties.

But at this moment they are in trouble, right because all these leverage buyouts are happening right out in the real economy, and all of a sudden, Solomon Brothers itself, the investment firm, is targeted for takeover by one of the raiders, Ron Perelman, and you know, like Raider Action on Raider on raider violence.

Right.

And you know the thing about being rated by another company is you start to think, oh, I'm not going to have a job, so they're going to come in and fire everyone in the country.

Certainly if you're the CEA, you're thinking, I'm going to have a job soon.

So the CEO gutfriend is panicking and he calls Warren Buffett, who knows from previous deals, and he's like, help, I need a white Knight.

I need someone to come and hear with a huge investment, a lot of money into the company, who will basically be a big sign that says like stay away.

Like, sure, you could take on Solomon Brothers, but you can take on Solomon Brothers and Warren Buffett, Uh huh, I don't think so.

Now, this is not normally the kind of business that Warren Buffett likes, right, because they don't make something that an average American can buy at their corner store.

Right.

I used to call.

Investment firms casinos, like you just didn't like Wall Street.

Right, But he likes the CEO and he sees a desperate firm willing to make a really good deal, and they make an amazing offer.

They essentially structure a deal so that he gets stock in Solomon Brothers guaranteed fifteen percent profit whether the start the company goes up or down.

That's pretty good, right.

Sixty three million dollars a year in dividends like this is this is the kind of money he can use elsewhere.

Right, And Solomon Brothers, they just get the reputation of the Great Warren Buffett.

Now apparently Warren Buffett shows up to make the deal, has no briefcase, no papers, you know, it's just the handshake.

They got a coke in one hand and a dilly bar or the other.

Exact and then he will soon regret.

He will soon regret this deal because in nineteen ninety one there is a rogue bond trader.

Yes, I love a rogue trader.

Little explanation.

Rogue.

They always call them a rogue.

Yes, yeah, right, it's kind of rakish, rakish pond trader.

It's worse than rakish.

So Solomon Brothers was a big dealer in treasury bonds, and the way treasury bonds work, they're the way that the US government funds its business obviously, right, billions and billions of dollars worth, and they don't just sell them to the public.

They sell them to the most esteemed firms on Wall Street, and those firms sell it to the.

Public primary dealers, the.

Primary dealers, and Solomon was one of those.

And in order to like make it fair, there was this rule that like one firm couldn't outbid all the other firms and sort of core to the market on treasury bonds for any certain issuance.

Right, So essentially everyone was supposed to put their bids in for the treasury bonds from the government and giving them up among themselves depending on what their bids were.

Right.

So this trader at Solomon gets this idea that like, well, they're not really watching, I could sort of create some fake buyers and like engineer this so that the government doesn't know that we're buying all the treasury bonds.

And at one point he gets like eighty seven percent of a certain issuance.

And if you're somebody who has eighty seven percent of anything, you can kind of set the price.

You know.

It's just a little little bit of a cornering of the market play.

It's funny because you think think of like treasuries as the most boring, safe thing in the world.

The idea that a rogue trader is going to be monkey around there is interesting.

And really scandalous.

Huh yeah, because the treasuries are the safest investment in the world, like the bedrock of the financial system.

So he gets caught.

I believe the Treasury of the Fed sends like a letter on this.

People know all the way up in the company that this has happened, but they decide not to fire him.

They say it was a mistake.

They said he shouldn't have done it right.

It ends up being this sort of massive cover up, and the government is pissed, like they are threatening to take away this primary dealership from Solomon.

Basically, it would say the US government doesn't trust you as an investment firm.

It would be the end of the firm.

Yeah, right, So the CEO resigns.

Everyone's implicated except yeah the Oh and he's the second richest man in the world at this point.

He's got things to do, you know, He's got Coca Cola shares to buy, he's got to go eat Hamburgers.

He has to fly to New York, place he doesn't really like and take over running Solomon Brothers, a firm which he doesn't really respect or trust.

And this is the guy who in a way never wanted a job, right, like you've said all this to be rich, and now we have it.

Yes, is such a job.

And he goes to the he goes to the Treasury Department, and they're talking about, you know, this sort of death sentence for the firm, saying we are going to officially say that we don't trust Solomon Brothers.

And he says, you know, I have technically not signed the papers that I will take over a CEO, so I can just go back to Omaha at any time.

And then all of a sudden, you have basically the greatest financial disaster in history unfolding under you.

And I'm gonna go back in Eataly.

I think the Warren Buffett card now with the US government.

Yeah, He's saying, do you know who I am?

US government?

Yeah yeah, And they're like, okay, like we want you to rescue this company because we don't want to have to rescue this company, right, And they end up putting Warren Buffett through the wringer.

He's got to testify before Congress, he's got to remake the management of the firm.

Not a popular guy.

On Wall Street at this point because he's cutting pay for the traders.

He cancels everyone's magazine subscriptions.

He just thinks like they're spending way too much money.

He's being the frugal Warren Buffett.

Which remember you know this is Wallstall the Street in the eighties.

Yes, and you know he cuts the cocaine budget exactly.

It's terrible.

And he tells the workers at Solomon wait for it, you got it.

Lose money for the firm and I will be understanding.

Lose a shred of reputation for the firm, and I will be ruthless.

Eventually, Solomon Brothers gets bought by someone else, Buffett can get out.

And to be clear, he ended up making a bunch of money on the deal, as he always does, right, but he would be sort of gun shy about this, lending his reputation to another business for a long time.

Right, And over the next few decades he would get the call the first place you turned when you're like, oh, we screwed up, We're about to go out of business, there's a run on our bank or whatever.

We need to call Warren Buffett.

We did, we did.

We need a smiling Grandpa face on that building.

So in the late nineteen nineties, there's a firm called Long Term Capital Management.

I heard of it a boiler, not long term.

They were a company staffed by brilliant Nobel prize winning right, yes, economists who thought they had figured out all these global arbitrages.

And then there's the nineteen ninety eight was it the Russian current?

Russia?

Well, and they were highly leveraged.

They'd borrowed a ton of money.

This is the gas lean in the fuel tank blowing up.

Moment, ring ring ring.

Yeah, Warren Buffett, would you like to buy everything we own and save our company?

So Buffett made an offer, made an offer to save Long Term Capital Management, but he had pretty strict terms.

He's like, I'm going to buy all your assets for very cheap and you all need to leave the company.

And they didn't like that.

Give you a little money and you're fired.

Yes, how about that?

For socium of investment firms had to sort of bail out Long Term Capital Management and save the global economy.

So Buffett did not like this role of savior.

But at this point, Warren Buffett is sort of facing this bigger existential crisis which is as we move into the nineteen nineties, we're about to hit the age of computers and the Internet and high tech.

And Warren Buffett he didn't even know how to turn on a computer.

Wait a minute, Never invest in a business you cannot understand.

And understand it.

He did not.

After the break, that's the end of the ads, We're going back to the show.

It's the late nineties and the internet boom is here, and Warren Buffett doesn't know how to use a computer.

Yeah, I mean he didn't want to use a computer, right.

He lives in an analog world.

He gets the Wall Street Journal.

I was going to say every morning, but I think he had a deal to get it the night before, you know, delivered, and he would read it from beginning to end.

He liked to read papers and magazines and annual reports.

This is the Warren Buffett, right, And everyone kept telling him, Oh, you should really get a computer.

It's the next hot thing.

When I say everyone, I mean like Bill Gates.

He was friends with Bill Gates, which is sort of unusual, right, an older man, younger guy.

But they played bridge together, right, and they just.

Love to talk about business.

They really hit it off and Bill Gates is always like, well you might want to use a computer's like no, no, no, And then of course, like people would pitch him like you need to buy these dot com stocks or even Microsoft, or even Microsoft really, I mean Bill Gates came to him about this, and Buffett said, like, don't I don't understand how it works, so I really don't want to do it.

He eventually got on the internet for a funny reason.

He loves to play bridge, and one of the professionals he was playing bridge with was like, you know, you could play bridge anytime, day or night with people around the world.

So I imagine there was a time when if you were playing bridge online, you might have been playing against I don't know, WB seven seven one two might have been Warren Buffett, right.

I like that for Warren Buffett, the Internet is just basically like a bridge video game.

Well, you know, it's funny.

Someone had pointed out to him that like, for a lot of people, the internet is just a way to do something they really want to do, and like that is the strength of it.

So hopefully at this point, like he's sort of seeing this, but he is still not going to pour money into dot com stocks or into the tech business at all in the nineteen nineties.

And we know where this story is going.

There is a crash coming.

The stock market is going crazy.

Valuations are up.

I think you know, the Nasdaq went up seventy eighty percent in a year, like it was just insanity.

And Warren Buffett's stock, Berkshire Hathaway is kind of like not doing so.

Well, underperforming, underperforming.

At least everyone else.

Right, this is what's going to happen in a bubble.

At one point, there is a rumor that Warren Buffett has died.

The rumor was started on an internet bulletin board by on Yahoo.

Someone used the moniker ZX one six seven five.

That guy sounds credible, yeah, and he posted Warren in hospital critical And here's Warren Buffett hasn't even seen the internet.

Right.

Berkshire Hathaway stock plunges.

They have this like policy they don't comment on Warren Buffett or anything, but they had to like put out a put out a thing they said, like Warren Buffet's fine, he is alive.

Right, But even after they debunk it, the stock is down like eleven percent for the week, right, and by the end of the.

Down on rumors of his death.

Then up, I was a little nervous.

You were going to say they said he died and it went up right now, that would be really bad side.

No, no, no, I mean they's still like the people who trade in Berkshire Hathaway stock need Warren Buffett.

Right, at one point he looks back on a year or two and he's done worse than the S and P index, Yeah, which.

Hasn't been a lot of going up a lot at this time, driven by tech stocks.

So there's this legendary moment in nineteen ninety nine, right, Buffett goes to this big conference in Sun Valley, Idaho.

Happens this day.

It's called like the Allen and Company Conference.

Right, all the CEOs pour in.

There's a lot of media types high tech, right, so they.

All wear vests and weirdly, like part of the Allen Sun Valley conference is it's got to be some kind of photo op because like if you see a picture of Jeff Bezos or Rupert Murdoch or whatever, like, it is usually from there.

Like it's a phenomenon that I don't understand, but I have observed for years now.

It's like a low key red carpet for billionaires.

The heads of Microsoft, Apple, they're all there.

Warren Buffett is the final speaker in this book, the Snowball.

There's this love thing about you know.

He can't got to set up his presentation and everything.

Not a big computer guy, right, He's.

Not setting up his own presentation.

He's not talking to the av I know that.

So he looks out and he says to the CEOs, many of which are very rich from this bubble, right, there is no new paradigm.

This time is not different.

This is a bubble fueled by greed and beloney.

And Warren Buffett loved boloney, but he wasn't using it that way.

He was saying, Look, you only have to go back to history to see what is happening today.

He says, look at the car industry, right, the car industry, huge invention, right, maybe even bigger than the internet.

Right.

The car right changed the world.

But of the two thousand auto companies started, only three survived.

So he's like, look, it was great for America, great for the world, but kind of miserable for investors.

There is not a guarantee that a transformative invention is going to be hugely profitable for the people who invested in it.

One more example, he gives them airplanes, airline industry.

Right, revolutionary, transformative travel through the air.

Right.

But to quote Buffet, isn't this one in our selfworst episode?

Right?

If a capitalist had been present at Kittyhawk, he should have shot Orville Wright.

He would have saved his progeny money.

His point here is, whatever you all think about the Internet, it can both be the world's best invention and companies can still go out of business and still lose money on it.

This is the classic bubble story, right.

Like in fact, now when people talk about the dot com boom, they talk about actually the fiber optics.

Right.

These telecom companies that were laying fiber optic cables totally overbuilt, put in way too many fiber optic cables, had horrible economic returns for their investors.

But we as America had all this fiber optic cable that allowed the rise of the twenty first century Internet.

A similar story about railroad tracks in nineteenth century England.

Same story.

Yeah, and people would make money obviously off the Internet to this very day, but it would happen after the investment, after a lot of people went out of business.

And of course we remember this speech in nineteen ninety nine because in the year two thousand the bubble pops, a lot of these companies do go out of business.

And by the way, today this is the way people a lot of people are thinking about AI, right, like, exactly right.

There's a very plausible story which is, yes, AI is an incredible transformative technology.

But also a lot of these companies that are high flying today will lose a ton of money for investors, especially those who are getting in at high prices.

Exactly right.

So Buffett can now say he was right.

He stood in front of these geniuses and he told them the way it works.

Then listen to him, or even better, you know, they listen to him like, well, what are we going to do?

We got to ride this up.

So there's a crash and Buffett does what he did back in the nineteen seventies.

He still has money, and he looks at his stock, remember, which is like a little lower than he thought it should be, and so he says publicly, I'll buy it.

If you have my stock and you don't want it, I will buy it from you.

So he's doing kind of the like fundamental analysis of his own company, and it's too cheap.

It's a deal.

All I got cash, my company is a deal.

I will buy back your stock.

And he doesn't really have to because when people hear this, they're like, oh.

If Warren Buffett thinks it's a good deal.

Stock goes up twenty four percent, right, amazing.

Right, But this is also one of those moments, those buying spree moments that Warren Buffett loves.

Right, So now his stare price is going up.

He still has some cash, and companies, because there is a recession and there's been this bubble crash, companies are cheap.

So he starts buying.

I got one.

Yeah, opportunities come infrequently.

Ah, when it rains, gold, put out the bucket, not the thimble.

Love it, And he put out the bucket.

He bought Benjamin Moore paint Manufacture.

Sounds like a classic buffet.

Oh, oh, this one's even better.

Fruit of the Loom.

Sure underwear.

No matter how much the stock market goes.

Down, I know if you're in recession, man still sell underwear.

No, not a fruit, it's a loom company, exactly right.

Buffett buys carpet maker Pipeline companies.

So by the end of two thousand and seven, the S and P Index has suffered sort of a lost decade.

You know, if you invested and I think this doesn't count dividends and such, but if you invested at the beginning ten years before, your stock has gone nowhere over a decade.

But Berkshire has gone up twelve percent a year.

Lesson from first decade of the twenty first century.

Courtesy of Warren Buffett.

Be fearful when others are greedy, Be greedy when others are fearful.

We may need that one soon.

I'm going to keep that one.

So during this time, Warren Buffet's also doing some clever things with the company itself, or at least unusual things.

I should say.

One is he never lets the stock price split.

Now, to explain this, oftentimes when a stock goes up to two hundred, three hundred, four hundred dollars, they'll say, oh, we are basically giving you two shares for every one share, So now instead of one four hundred dollars stock, you have two hundred dollars stocks.

Basically just because it makes it easier for people to buy shares in the company, simple.

As here, absolutely.

It doesn't mean anything economically, really warm buff It's like, no, I'm not going to do that.

Right.

The Berkshire stock, which I guess if you go all the way back, started at seven dollars and fifty cents a share, right, kind of a normal share price.

Yeah, as of this taping, the Class A shares of Berkshire Hathaway are above seven hundred and fifteen thousand dollars.

Per share for one share, one share or.

A house, Like that's that's your choice.

Why, Like it seems kind of counter to the like folks see normal guy, rational guy, Like why does he do this?

When he is asked, he says that a low share price encourages short term investors, and he doesn't want people going in and out of his stock.

He wants to kind of almost keep it as a club.

And at that point it is sort of like a club of people who are investing in the company and don't want.

To sell it.

But I think it's also just like a weird ego thing that as he looks bet it's up on his computer now he uses computers.

His share price every day is a symbol of like everything that's happened over the last fifty years in one number.

Yeah.

I mean in the last episode you were talking about how he kept the name Berkshire Hathaway even though it was one of his worst investments, as like a way to be humble.

This is sort of the opposite of that, Like, if he's feeling too up, he just looks at the Berkshire share prices like, oh, I'm doing all right, you're like this.

When the share price started to get so big, a number of enterprising investment companies were like, well, wait a minute, here, what if we just imitate the shareholdings of Berkshire Hathaway, do everything that Warren Buffett does, but offer shares at like a cheap price, you know, essentially a more manageable price, I should say.

And people were doing this, and Warren Buffett was like, oh, they're making fees and all this sort of stuff off of my investment ideas.

So he creates the B class of shares and these are the democratic shares that anyone could buy.

In fact, he said he would print as many as people want because he didn't want like their scarcity to go up.

That's the way normal stock works, Yeah, Like they split the stock if the number gets high.

Yeah, so these people can then go to hear him talk at the Berkshire hath right right, right.

And it was enormously successful because it was like, first of all symbolic of this you know, American democratic company that everyone should be a part of.

And also it allowed dabblers to buy some Berkshire be a stock.

Sure, dabblers are just ordinary investors, like Berkshire b is just a normal stock.

The weird one is the seven hundred thousand dollars one, I mean presumably the seven hundred thousand dollars one.

Not only is it good for his ego, it's good for his brand, right, this whole thing of like he's profitable because he is.

We're in buffet that a single share trades for seven hundred thousand dollars burnishes that brand.

As we look back in sort of recent years, warm Off, it just keeps.

He keeps finding these companies that you didn't even think of, but they're just everywhere in your life.

Brooks running shoes, which I'm a big fan of shoe.

Yeah.

Absolutely.

In fact, a postal worker stopped me the other day and said, one of those shoes, and I'm like, is that a compliment?

Yes?

That's in New York.

That's a person who walks for a living.

Exactly right.

He buys Hines of course of ketchup fame and craft of macaroni and cheese fame, encourages them to merge, and that doesn't work out well and I think they're breaking apart.

Now buys Durasel like the battery company, and eventually, very famously, he hops into a tech stock.

He hops into Apple, huge investment Apples recently sold some of that, recently sold a lot of it.

But Apple Like.

He buys Apple like relatively late in the life of the company, and it actually makes sense as a buffet stock, even though it's a tech company, right, clear Moat, that brand is a clear moat.

Right, you can have whatever, a Dell laptop or an Android phone, but Apple can sell its products at a premium price year after year like that is the buffet thing.

And and Apple iPhone is just the thing that everyone has, yeah, like the running shoes or dairy queen, that sort of thing.

And even the story of Warren Buffett as White Knight that also keeps happening.

In two thousand and eight, during the financial crisis, it gets a call from Goldman Sacks.

At the time, everyone is panicked about everyone.

I won't say there was any particular problem with Goldman Sacks compared to the other investment companies.

But Warren Buffett invests five billion dollars.

You know, they hang a big poster of Warren Buffett up on the building, not really but kind of metaphorically that says, oh, you think Goldman Sachs is one of those slimy Wall Street investment firm zone No, no, no, no, no, we have Warren Buffett.

By the way, a striking thing to me in the financial crisis was that Uncle Warren, mister squeaky clean, had also owned a huge share of Moody's, the ratings company that was you know, I would say implicated, like not criminally, but you know, they were one of the key people who put these triple A ratings on bad mortgage bonds.

And Buffett was there too, and yet never sort of got tarred with that.

It's interesting, right, So he makes three billion dollars from the Golden Sax deal.

There's the Moody's thing.

He has made missteps, many missteps, But I don't know if it's just his demeanor or the amount of successes he's had, but like the press kind of gives him a pass on just about everything.

And I mean the amount of money he's made for his investors over the years.

I guess it makes sense you're willing to forgive a few mistaps.

And I don't think it's just the money, right, Like, he hasn't used a crazy metal leverage.

He never like blew up.

He never needed to be bailed out.

He invested for the long term in you know, things that people find useful.

I have an iPhone.

It's a good company, you know what I mean.

Lots of people drink Coca Cola.

Like he is sort of the opposite of the caricature finance villain who is just playing weird games and not doing anything for the real economy.

Like I think that is valid.

And this brings up the question what happens now.

At his last giant meeting, I think forty thousand people came to Omaha for the Berkshire Hathaway Annual Meeting, he announces that he's stepping out a CEO.

He'll still stay on as chairman, but his last day is December thirty first, twenty twenty five.

And it's a really interesting time for him to leave.

Right, We're seeing another perhaps bubble in tech stocks.

Right.

He has sold a lot of Apple and other companies.

So Brookshire Hathaway has a big pile of studying.

Seemed like the nineteen seventies and the two thousands all over again.

They are poised, perhaps something bad happens in the stock market to go in and make like these huge acquisitions, Like he'll be able to do pennies on the dollar for a data center.

Let's just say maybe maybe not right, and he's not there to do it.

So the question is without Warren Buffett there does the philosophy of Berkshire Hathaway and all their natural advantages.

Does it succeed?

They'll have the money to deploy, they have the ideas, they have a thousand quotes from Warren Buffett about how to do it, but they don't have the man himself.

And we'll be able to see, like what does that mean?

Remember Warren Buffett is getting personal phone calls when good companies are for sale or when bad companies need help.

That's a one on one phone call.

They're not calling the company, they're calling Warren Buffett.

We said, how the press gives Warren Buffett a pass regulators kind of too, like he just has a lot of goodwill, right, And then there's this like interesting sense that like Warren Buffett was there as this like symbol during difficult times when you have lost money on tech or some bubble or something like, you kind of want to go into the warm embrace, you know, of a cushy Warren Buffett being like here have have have a dairy queen treat in some Coca Cola, like everything will be okay.

And now we're gonna see, right, we'll see how much we miss Warren Buffett.

I mean, you're doing the time will tell ending.

But the thesis of this show, as I hear it, is like this whole last several decades, all second half of Buffett's career was trading on Buffett the man, Buffett the persona.

Let's say he's ninety five, He's stepping down a CEO.

He's not gonna live forever.

Like if I as I read this show, as I listened to it, you're arguing, like Berkshire Hathaway isn't going to be able to keep making those moves after Buffett.

That seems to be the argument this show is making.

I don't know.

I mean, it's good to have a lot of cash, and it's good they have very smart people, and he's put very smart people in charge.

And I will say there was a tiny little note that I saw somewhere which was although he's no longer CEO, he is still chairman of the board, and he might still be a little involved in times of great opportunity.

He's ninety five.

Those times better come soon.

Our producer is Gabriel Hunter Chang, our engineer is Sarah Bruguier, and our showrunner is Ryan Dilly.

I'm Jacob Goldstein and I'm Robert Smith.

We'll be back next week with another episode of Business

History, a show about the history, wait for it, of business