2006 年 Charlie Rose：Warren Buffett, Pt. 1

Warren Buffett, Pt. 1

Monday 07/10/2006

https://charlierose.com/videos/12653

Investor, businessman, and philanthropist Warren Buffet begins, focuses on his personal life and the path that led him to success.

Charlie Rose: I get to use whatever paint I want, paint whatever I want. I love it. Warren Buffett, the man, coming up. Warren Buffett is the second richest man in the world, worth about $44 billion. He's chairman of the Berkshire Hathaway Corporation. He made headlines around the world on Monday, June 26th, 2006, when he announced he was giving $31 billion of his wealth to the Bill and Melinda Gates Foundation. Together, they have created a foundation which will have more than $60 billion to give away. It was an act of extraordinary generosity, borne out of friendship, shared values and mutual admiration. I admit it, I am prejudiced about Warren Buffett. He is a friend. He and his family have given me access and time to talk about his life, his business, his values and his philosophy -- his philosophy about everything. We have talked many times since our first interview in 2004 at the annual meeting of Berkshire Hathaway. His is a life worth talking about, because of his candor about it and his remarkable intelligence. And yes, his stunning wealth. Warren Buffett owns 31 percent of Berkshire Hathaway, a company with a stock market value of $140 billion. His share is worth $44 billion. Berkshire Hathaway owns part of some of America's most famous brand names -- Coca-Cola, the Washington Post Company, American Express and Procter & Gamble. And all of Fruit of the Loom, See's Candy and the Nebraska Furniture Mart. He is the subject of many, many newspaper and magazine stories, and more than 20 books have been written about him. For a man so famous and so rich, Warren Buffett has led a remarkably modest lifestyle in his hometown of Omaha.

Warren Buffett: Omaha is home. Always been home, always will be home. A lot of friends are here, but I just -- I feel good here. I mean, my kids are going to the -- my grandchildren now are going to the same public high school that my kids went to, my wife went to, my dad went to. I mean, almost 100 years. And there's a lot of continuity here. It's a great life. You feel like you're part of a community. I live in a house I bought in 1958. You know, that's 46 years ago. I'm happy there, you know.

Charlie Rose: You like the house. And so if it ain't broke, don't fix it.

Warren Buffett: Now, this office I've been in for 42 years. And it's -- everything falls into place. I do two things. Call it asset allocation. In other words, we have somewhere between $100 million and $150 million a week coming into Berkshire. And that's after all the needs of the operating businesses are taken care of. Because I let -- you know, if they build plants or anything, that's up to them. But then the remainder comes into Omaha. My job is to allocate that among anything in the world that makes sense to me. I can put it in marketable securities, I can put in bonds or equities, I can put it in -- I can put it in whole businesses. I can sit temporarily with it in cash. But that's my job. I mean, that is my sole responsibility. We don't do that by committee. We don't do it by advisers. That's my job. The second job I have -- and this is easier if you kind of get the ball rolling -- and that's to have talented, high-grade managers running our businesses who are happy running them. So when I buy a business, I'm usually buying the manager with it, because I don't know how to run the business. So I -- when somebody comes along and says they want to sell their business, I have got to look them in the eye and I have to decide whether they love the money or they love the business. It's OK to love the money some, but they have to love the business. They have to have a passion for it. Why am I running down here every day and can hardly wait to get to work? If it isn't for the money, it's because I get to do my job the way I like to do it. I get to paint on my own canvas. I feel like I'm Michelangelo down here and I'm doing the Sistine Chapel. Now, nobody else may think so, but they don't say, use a little red paint instead of blue paint or something like that. I get to use whatever paint I want, paint whatever I want. I love it. The second thing is they want applause. I want applause. I mean, I like it when people say that's a good job. And our managers are just the same way. They have got a lot of money, most of them, and they want to be treated fairly. So you don't want -- they don't want to be taken advantage of. They want to paint their own painting. They love that. And they get it at Berkshire like no other place, and they want applause. And when they get applause from me, they're getting applause from a knowledgeable observer. I mean, it is not uninformed applause. So that keeps them. And you know, we've had remarkable success in keeping managers over the years.

Charlie Rose: Let me just talk for a moment about your skills.

Warren Buffett: We can do that in a moment.

Charlie Rose: You think one moment is enough?

Warren Buffett: Well, I'll stretch it out for you.

Charlie Rose: Let's assume we talk about energy and intelligence and integrity. Let's give those values and skills to you, all right? You have an extraordinary capacity to focus.

Warren Buffett: Absolutely, yes.

Charlie Rose: You read a lot.

Warren Buffett: Yes.

Charlie Rose: And you focus.

Warren Buffett: Yes. A lot of people I know that have done well in their own areas, focus. In fact, just about the first time I met Bill, we were at a place with 15 people eating dinner. And his dad asked -- went around the table and asked everybody what they thought the most important ingredient they brought to their game was. And I answered focus. And I saw Bill nodding his head across the table.

Charlie Rose: So you knew right there --

Warren Buffett: Yeah --

Charlie Rose: -- you were soulmates.

Warren Buffett: No, it's focus.

Charlie Rose: What do you mean by focus?

Warren Buffett: I mean just concentrating on what's important. I mean, you have to know your game. I was -- I was -- listen, I was lucky. I was born wired in a certain way, you know. I didn't have anything to do with it at all. I was born at the right time in the right place. Huge capital markets. America -- couldn't have been anything like it any place in the world. So here I am wired for it. And by focus I mean using that wiring, basically, and trying to get it so there's fewer flickers here and there and that sort of thing.

Charlie Rose (Voice Over): He was born on August 30th, 1930. His parents, Howard and Leila, lived on Barker Avenue in Omaha. (on camera): This is Barker Avenue.

Warren Buffett: Barker Avenue.

Charlie Rose: Tell me about this photograph.

Warren Buffett: Well, that's my mom and dad at 4224 Barker. And that's where I spent the first five or six years of my life. My dad, until 1931, was working for a bank, and he was selling securities. And then the bank went broke in August of 1931. In fact, just about on my dad's birthday. At that time, my dad was paying, as I remember, $55 a month on this house. He had no job. He had two little kids. I was one year of age at that time. And my grandfather had a grocery store. So there was at least a little food around. But it was a tough time. It was a tough time.

Charlie Rose: It was the beginning of the Depression.

Warren Buffett: It was the beginning of the Depression. Yes.

Charlie Rose: This one is?

Warren Buffett: That would be my sister Doris and me together.

Charlie Rose: And this one? This has to be --

Warren Buffett: I was big on costumes when I was a kid. My dad would go to New York, and when he came back he would usually --

Charlie Rose: Bring a costume.

Warren Buffett: -- bring you a costume. So I'd be a fireman or a cop or whatever.

Charlie Rose: Or a cowboy.

Warren Buffett: Or a cowboy, yes, right.

Charlie Rose: Did you have an entrepreneur spirit? Were you the kind of kid that wanted a paper route and wanted to sell lemonade and wanted to do all those things?

Warren Buffett: Yes, I did. I enjoyed it. And many years ago, I read about a study -- and I don't know whether the study is any good or not -- but somebody was trying to correlate business success with various factors, whether it was your grades in business school or, you know, what your parents did or anything. And it said it correlated best with the age at which you first got into your own business.

Charlie Rose: And when did you first get into your own business?

Warren Buffett: Well, I'm not sure exactly. But it was probably when I was maybe 6 or something like that.

Charlie Rose: Doing what? Do you remember?

Warren Buffett: Well, I would buy six packs of Coke from my grandfather's grocery store for a quarter and sell them for a nickel each.

Charlie Rose: That's a 5-cent profit right there.

Warren Buffett: Absolutely. Absolutely. And I had the whole Coca-Cola Company behind me pushing it.

Charlie Rose (Voice Over): Howard Buffett, his father, was elected to Congress in 1943, and the Buffett family moved to Washington. (on camera): He was your hero.

Warren Buffett: Absolutely.

Charlie Rose: Because? Yes.

Warren Buffett: You know, just everything about him. I mean, growing up with him. We were pals. You know, never saw him doing anything in his whole life that you couldn't put on the front page of a paper.

Charlie Rose: Why did he get into politics?

Warren Buffett: Well, he was a man of political ideas. But I don't think he ever had any ambition to get into politics. He was introverted. He basically didn't like to give speeches or anything of the sort. But he had strong ideas about political systems and about the individual and --

Charlie Rose: And about service?

Warren Buffett: Yes. And he had a strong political philosophy and a philosophy of life. And it was religious based to a significant degree. And he -- he was -- he thought the government should play a very minor role in people's lives, to almost an extreme degree. He may have gotten a little more extreme as he went over the years. I didn't agree with him totally on political philosophy even as I was growing up, and then I grew further from that. But it didn't change my feelings about him.

Charlie Rose: What do you see in yourself that most reminds you of your father?

Warren Buffett: Well, certainly, listen, if I could be three quarters of the man he was, I'd be very pleased with myself.

Charlie Rose: Why do you say that?

Warren Buffett: I just think he was the best human being I've known.

Charlie Rose: The best human being you've known?

Warren Buffett: Yes.

Charlie Rose (Voice Over): When he came back to Omaha, he met Suzy Thompson. (on camera): The Buffett family knew the Thompson family.

Suzy Buffett: Oh, my, yes. They were like this. The parents, the parents. The children didn't know each other, because Warren and his sisters lived in Washington from the time he was 13.

Charlie Rose: His father was a congressman.

Suzy Buffett: Right.

Charlie Rose: So when you first met him --

Suzy Buffett: I first met him, I was going to be his youngest sister's roommate at Northwestern. So I walked into their house, and he was sitting in this chair in the living room. And he made some sarcastic quip. I hadn't even met him. So I made one back. I thought, who is this jerk? And that's how we met, yes.

Charlie Rose: Here is the story. He chased you and you were dating other people.

Suzy Buffett: Um-hum.

Charlie Rose: He would come over to the house.

Suzy Buffett: Right. He -- my dad --

Charlie Rose: And sit with your father.

Suzy Buffett: Yeah, and --

Charlie Rose: And you'd gone off on a date.

Suzy Buffett: Right. My dad fell in love with him. Listen, Warren is smarter than you even know. My dad had a mandolin up in the attic. Warren said, Doc, get out your mandolin and I'll play with you with my ukelele. So they played together. And my father fell in love with Warren. And he kept saying to me, you don't understand this boy. He has a heart of gold. No pun intended. And that's what went on for quite a while. You know, I mean, but doesn't Warren always get what he wants?

Charlie Rose (Voice Over): Suzy and Warren Buffett were married, and they soon moved to New York to study and work with Ben Graham, a professor at Columbia University. Next to his father, Ben Graham remains an intellectual influence and a hero.

Warren Buffett: There are half a dozen that had a tremendous influence. And certainly Ben Graham influenced me enormously in terms of giving me the investment framework to work -- to go forward. I wouldn't be remotely where I am without Ben Graham.

Charlie Rose: Graham gave you the principle.

Warren Buffett: He gave me the foundation.

Charlie Rose: And you read the book first.

Warren Buffett: I read the book.

Charlie Rose: And said, I want to meet this guy?

Warren Buffett: Well, I was where I was. I wanted -- and I didn't understand he was teaching. Charlie, when I read the book and when I finished Nebraska, I was leafing through a catalogue of Columbia and his name popped out at me. And that's when I wrote and said, will you take me? But I had no notion about that.

Charlie Rose: Why were you willing to leave Omaha and go to New York? Was it that this guy knows something?

Warren Buffett: Oh, yes. I wanted to -- you know, if I was going to be a disciple, I wanted to see the messiah.

Charlie Rose: And you sort of viewed it that way.

Warren Buffett: Yes, I did.

Charlie Rose: Investing.

Warren Buffett: Sure.

Charlie Rose: When you read the book, you said to yourself --.

Warren Buffett: I said, this makes sense.

Charlie Rose: Makes sense.

Warren Buffett: It makes sense. Nothing up to then had really made sense.

Charlie Rose: And the principles are still the same.

Warren Buffett: The principles are absolutely the same.

Charlie Rose: Having changed what, though, as you changed circumstances?

Warren Buffett: Well, you just see more ways to apply them. I mean, the applications come up in different forms. But the principles remain the same.

Charlie Rose: Help me understand the operative idea about Ben Graham, of value investing.

Warren Buffett: Well, Ben just says, look at a stock not as some thing that wiggles around or is quoted in the paper every day or is up there on a ticker. Look at it as a piece of a business. Figure out what the business is worth. If you can't figure out what the business is worth, you have got no business buying the stock. And I had never thought of it that way. And so I started looking at businesses instead of stock charts and volume and all that kind of thing. And it was amazing, what kind of an edge that gave me. And then, secondly, he said the stock market is there to serve you, not to instruct you. So you don't look at stock prices as telling you whether you're right or wrong. You're there to take advantage of stock prices when they get out of line with reality. And then thirdly, he said always have a margin of safety. Don't try and drive a 9,800-pound truck across a bridge that says limit 10,000 pounds. Leave yourself room for error, because you don't know everything. So you always leave that margin of safety.

Charlie Rose (Voice Over): Buffett works in this office building with a staff of 16 and a collection of memories. (on camera): This is Gillette Safety Razor company.

Warren Buffett: Right. This goes back to the patent for the razor, going back I guess, well, this is 70 years ago roughly on that particular razor.

Charlie Rose: And how did Gillette come about? Or why did you decide to get involved in Gillette?

Warren Buffett: Well, Gillette, you know, here's a company that after 100 years of being in the razor and blade business has 70 percent or so of the value of razors and blades throughout the world. Now, when you have that kind of permanent advantage, obviously, with the consumer, it's not going to go away in a few years. It's not going to go away in decades. This is a company that really has something.

Charlie Rose: Meets the Buffett test.

Warren Buffett: It meets the test. It meets it. Durable competitive advantage. Durable competitive advantage.

Charlie Rose: And all night as you go to -- while you're sleeping, you know --

Warren Buffett: When I sleep at night, I know that hair is growing on the faces of billions of men around the world, and that hair is growing on twice as many legs of women around the world. But I don't think too much about the women's legs. I wouldn't get to sleep.

Charlie Rose: Here is the Omaha Royals.

Warren Buffett: The Omaha Royals, yes. Maybe 10 or so years ago, maybe a little more even, the owner of the Omaha Royals was going to sell, and probably move the team out of town. So at the time, it was the Union Pacific Railroad and Walter Scott and I bought the team, primarily to keep it in Omaha.

Charlie Rose: And it's still in Omaha?

Warren Buffett: It is still in Omaha.

Charlie Rose: And you suit up ever?

Warren Buffett: Oh, yeah. No, they count on me.

Charlie Rose: I've seen pictures of you in a uniform.

Warren Buffett: I've started several games, but they seem to pull me after one pitch.

Charlie Rose: Before the first pitch.

Warren Buffett: Yes, right.

Charlie Rose: We have a change in the starting lineup. Buffett will not be pitching today.

Warren Buffett: Nobody's got (inaudible). That was our first purchase. You can barely read it, because the ink has gotten faded.

Charlie Rose: By the partnership?

Warren Buffett: The first purchase of Berkshire stock by the partnership in 1962. And this is the trading record of a firm called at that time Tweedy, Brown and Riley (ph). And they were the brokers I used. A wonderful fellow named Howard Brown (ph) bought all my Berkshire for me at this small firm called Tweedy Brown (ph). And then many years later, they pulled off the trading card related to that first purchase and sent it to me.

Charlie Rose: This is what? Tom Osborne has signed this.

Warren Buffett: Yes. And Frank Solich too. And that's the record of Nebraska during the Devaney-Osborne-Solich --

Charlie Rose: 1962 to 2003.

Warren Buffett: It was quite a record.

Charlie Rose: They won a lot of football games.

Warren Buffett: They won a lot of football games.

Charlie Rose: That's a passion, the University of Nebraska.

Warren Buffett: I mean, you're not allowed to reside in Nebraska unless you're a little bit of a fanatic on the subject.

Charlie Rose: When you take Gates to a game in which they're playing against Washington?

Warren Buffett: He doesn't really respond very well. But in Nebraska, I mean, when there's a divorce in Nebraska, they don't argue about the kids. They argue about the football games.

Charlie Rose: Who gets the tickets. Here we have the New York Stock Exchange. And this is, let it be known that Berkshire Hathaway, Inc., Omaha, Nebraska listed on the New York Stock Exchange.

Warren Buffett: We had problem doing that because of the price of our stock and everything. It took a little special action by the Exchange, which I appreciated.

Charlie Rose: Explain that to me.

Warren Buffett: Well, it's just that they had some rowant (ph) requirements and all that, that were designed for lower-priced stocks. And we didn't have the number of 100-share owners that were required at the time. So they redefined it a little bit to allow Berkshire to be --

Charlie Rose: There are always people who want to know why you've never split the stock.

Warren Buffett: Well, we don't split the stock because we're not -- we don't want to encourage the kind of buyer who is excited by stock splits. And this way, it keeps it more of a business atmosphere and less of a day-to-day stock atmosphere around it.

Charlie Rose: And is there any sense that the people that you want to invest in Berkshire Hathaway, you want them to come in for a long time --

Warren Buffett: Definitely.

Charlie Rose: -- and you want them to take seriously the decision to buy Berkshire Hathaway.

Warren Buffett: We want them to join in the business with us, with the intention of holding it forever. Now, all kinds of reasons why they might not, but that's the goal.

Charlie Rose: Do you check the price of the stock every day?

Warren Buffett: I probably know about it sometime during the day, maybe at the close, but I'm not checking --

Charlie Rose: And if there's some movement, you're not interested why there is movement, who might be selling or who might be buying?

Warren Buffett: Doesn't make any difference.

Charlie Rose: Doesn't make any difference?

Warren Buffett: No.

Charlie Rose: So on this wall, here's Tom Murphy -- and you were in a soap opera.

Warren Buffett: I was in about four soap operas. That's because every time I got invited, they hadn't seen the earlier ones. And Susan Lucci was terrific. I mean, she -- she -- and Tom Murphy and I were there. We couldn't remember our lines or anything. She carried us through.

Charlie Rose: Now, you played yourself?

Warren Buffett: Yeah.

Charlie Rose: Buffett and Murphy show up on the set of All My Children.

Unidentified Male: May I introduce my friend, Warren Buffett.

Unidentified Female: Oh, my, I am so thrilled to meet you. I have been such a fan of yours for such a long time. But I must tell you that your photographs do not do you justice at all, Mr. Buffett.

Warren Buffett: Please call me Warren.

Unidentified Female: Well, thank you. If you'll call me Erica.

Charlie Rose: Susan Lucci is the long-time star of that show.

Warren Buffett: Right.

Charlie Rose: Now, they paid you for this.

Warren Buffett: They paid me for this. I tried to negotiate for more, but I didn't have much luck. The mural says a wardrobe allowance, which they gave me for $10. And that was in 1991. I haven't spent it yet. Some day, something will come along.

Charlie Rose: This is funny. This is the story about Gorbachev when he was ousted. "Hard-liners declare emergency, tanks rolled into Moscow streets." And the man that they were assuming to be, Gennady Yanayev, is not in fact -- it is Warren Buffayev (ph).

Warren Buffett: He may be my long-lost twin. I don't know. But this was the day after I took over at Salomon, and I thought some of the -- A, they got my picture mixed up, then there's "hard-liners declare emergency," (inaudible) --

Charlie Rose: It would have fit for Salomon?

Warren Buffett: It kind of fit, yes.

Charlie Rose: This is you batting against Bob Gibson?

Warren Buffett: Bob Gibson, right.

Charlie Rose: You take your life into your own hands.

Warren Buffett: I only play against the best.

Charlie Rose: What was it, (inaudible) that's ever been --

Warren Buffett: Yes, we're friends, but I wasn't sure how far that would carry me.

Charlie Rose: So Brokaw sends you a note saying, copy, but Gibson --

Warren Buffett: May object or something.

Charlie Rose: May object.

Warren Buffett: Baseball -- I've always liked baseball. I mean, I don't follow it the way I used to, when I was a kid, but baseball is, you know, I love sports generally.

Charlie Rose: Everywhere I look, there's you in a uniform. There's a hockey thing over there. Here is a man that you referred to because of his approach to hitting represents what to you as a metaphor?

Warren Buffett: Well, Ted Williams was all about discipline in hitting. He said the most important thing was waiting for the right pitch. And he illustrated -- in his book, "The Science of Hitting," he illustrated that. And you know, he looked at hitting as something that he thought about morning, noon and night. You know, and always was looking for how to do it better. But discipline, he said swinging -- waiting for the right pitch is the most important thing in batting.

Charlie Rose: And you think about morning, noon and night Berkshire Hathaway in what way?

Warren Buffett: Well, we keep waiting for the right pitch. And we're not going to swing at some pitch that some other fellow might like. I mean, if our favorite pitch is two inches above the naval, some other guy likes it, you know, around the letters or a little lower or something, that's fine. But in business, unlike baseball, there are no called strikes. So you can sit there and the pitcher can throw you IBM at 62 or General Motors at 28 and all kinds of things, and nobody is going to call a strike. If you swing at one of those pitches when it comes across, Berkshire Hathaway at 748, you know, and you miss, it's a strike, but it's a terrific game that way because you can sit there and wait and wait and wait for the right pitch. And there are not many things in life where you get that option.

Charlie Rose: And that's exactly what you're doing now.

Warren Buffett: That's what I do now. And I did it before.

Charlie Rose: In anticipation of this annual meeting, you have to say to the stockholders, I've been waiting for the right pitch and I haven't seen it.

Warren Buffett: That's right. That's right. And some pitch somebody else can hit out of the park, you know, but I don't think I can. You know, that's my problem, but I'm not going to -- I am not going to think I can hit a pitch that I can't.

Charlie Rose: Does it kill you to know that we've got $40 billion there, not earning huge interest rates in today's market?

Warren Buffett: Yeah, well, I don't like it. But I like it better than swinging and missing. And the problem for most managers is that they've got all these people up in the stands yelling "swing, you bum." You know, but we've got a group of shareholders who not very often yell out "swing, you bum."

Charlie Rose: In fact, they're yelling out swing when you're ready. And that's the confidence that you developed.

Warren Buffett: That's right.

Charlie Rose: Why do they come to this annual meeting?

Warren Buffett: I think they have fun. I mean, it's, you know, they see people they like. I think they -- they learn more about Berkshire. It's kind of a reunion for many of them. There's all kinds of little clubs develop and friendships develop out of it.

Charlie Rose: A little shopping on the side.

Warren Buffett: Yes, shopping on the side.

Charlie Rose: Get to see a free movie.

Warren Buffett: In the end -- yes, that's about it, though. We don't give them goodies or anything like that. I mean, they come because they want to come.

Charlie Rose: And here is Babe Ruth.

Warren Buffett: That's the Hall of Fame after the second year minus Ty Cobb, who was late.

Charlie Rose: Now, this is up here simply because you love baseball?

Warren Buffett: I just think those are -- you know, those are the champs. They were the first people put in the Hall of Fame.

Charlie Rose: And Ty Cobb --

Warren Buffett: He was late for the picture. And whoever took it wouldn't wait.

Charlie Rose: But he actually knew your great friend, Carol Loomis.

Warren Buffett: He dated her.

Charlie Rose: He dated her?

Warren Buffett: He dated her, right. Now, bear in mind --

Charlie Rose: A little bit of her history we didn't know.

Warren Buffett: To be honest about it, I mean, he was 40 or some years older than she was at the time. But his nephew called her and said my uncle Ty has been watching you on television -- she was on a quiz show -- and he would very much like to take you out. She went a couple of times.

Charlie Rose: She said, it's worth getting to know Ty Cobb.

Warren Buffett: Right, right.

Charlie Rose: So here's when Tiger Woods -- to Warren, he says, "I thoroughly enjoyed our day together and look forward to doing it again. Signed, your friend Tiger." Was he caddying for you?

Warren Buffett: No, no, I was caddying for him. And if I had my back here, on the back of it, it says "Woods." I mean, that was --

Charlie Rose: Oh, I see.

Warren Buffett: Then on the 18th hole, he said, now, Warren, he said, I understand you play this game. And I said not the game you're talking about, Tiger. He said we're going to play the 18th hole and we're going to play it for serious money. And I said, Tiger, all money is serious money. He said, no, we're going to play for $5. I said, that's serious money. And then he got down on his knees. He played me on his knees.

Charlie Rose: So every stroke he hit was on his knees.

Warren Buffett: I mean, he was all the way down on his knees.

Charlie Rose: And how did he do?

Warren Buffett: Well, he hit his drive about 260.

Charlie Rose: On his knees?

Warren Buffett: On his knees. It was unbelievable. Straight out.

Charlie Rose: He's out like this when he --

Warren Buffett: Yeah, he didn't even adjust himself after he was down. So I went over and I handed him $5. And then I said, Tiger, I think you're forgetting something. He said, what's that? I said, the caddy gets 10 percent of your winnings. I'm still waiting for the 50 cents.

Charlie Rose: One day he'll caddy for you.

Warren Buffett: He's a terrific guy. He is one terrific guy. I can tell you that. It was part of a charity deal. And I mean, he went all out, delivered value to the people that bought the right to play with him.

Charlie Rose: And as Jack Nicklaus says, he plays a game I'm not familiar with.

Warren Buffett: I remember when he said that.

Charlie Rose (Voice Over): If you go to Omaha, Nebraska to see Warren Buffett, one of the things you might end up doing is going to Gorat's restaurant, one of his favorites. We did that and we talked with him about a typical day. (on camera): Walk through a day for me.

Warren Buffett: The day is -- you wouldn't believe the day. I mean, I come down and I --.

Charlie Rose: At what time?

Warren Buffett: Well, I do some reading -- I usually read a lot of the papers at home. I get up around 6:45.

Charlie Rose: Paper or online?

Warren Buffett: Mostly regular paper, but I also click on some things.

Charlie Rose: Yes. You have a favorite list, too?

Warren Buffett: Yes, right. I've even got THE CHARLIE ROSE SHOW up there. I want to see who's on your -- I really do. So I get up about 6:45 usually. But I may get to the office at 9:00. And I may get there at 8:00. But I have no schedule to speak of. I mean, here's my date book, you know, just take a look.

Charlie Rose: Can I do this? This is not jam packed with appointments.

Warren Buffett: 8:00, 9:00. I just don't do it. So -- I don't want to live that way.

Charlie Rose: You decided that a long time ago.

Warren Buffett: A long, long, long time. I decided that when I was delivering papers, you know, when I was a kid. I knew what I enjoyed and what I didn't enjoy. I like delivering papers. I'd still would like to deliver up. But I don't want to be head of IBM or General Motors.

Charlie Rose: Why not? Because --

Warren Buffett: Your life is too taken up by things that you don't really have choices about.

Charlie Rose: Meetings and agendas and --

Warren Buffett: Yes, I just don't want to do it.

Charlie Rose: Take me -- 9:45. You get in at whatever.

Warren Buffett: I do more reading. I read five newspapers a day. I read all kinds of annual reports and magazines and 10Ks and 10Qs. And so I would say I spend 75 percent of the day at least, maybe 85 percent reading. And I spend the rest on the phone. And I make -- I buy or sell stocks or bonds or foreign currencies. I mean, I -- but that doesn't take much time. Because we're not doing that on a broad scale. And then I go home and I play bridge or I read some more.

Charlie Rose: Go home at 5:00 or 6:00?

Warren Buffett: Yeah, although that can be -- there is no -- I don't like to have structure.

Charlie Rose: You have no schedule.

Warren Buffett: I don't like to be structured.

Charlie Rose: So if you want to go home at 3:00, you go home at 3:00. If you want to go home at 7:00, you go home at 7:00.

Warren Buffett: Exactly.

Charlie Rose: And read more.

Warren Buffett: Yes, usually, or play bridge now more.

Charlie Rose: Online.

Warren Buffett: Online. I would pay -- and I don't mind saying this to the people that own it because they don't know how to get it from me. I would pay $5 million a year for the ability to play online bridge 12 hours a week. It's worth it to me. You know, if I compare it to the cost of the second home, which wouldn't mean a thing to me to speak of, or the cost of a boat or whatever it might be. I mean --

Charlie Rose: (inaudible) is to be able to play --

Warren Buffett: If you deliver 12 hours of joy, playing with my sister in Carmel (ph) or whoever it may be, you know, doing it in a few seconds, clicking on, great, you know, interface on it, I'd pay it. But they can't -- so I'm paying about $95 a year.

Charlie Rose: (inaudible) and bridge and friends. Those two things.

Warren Buffett: And the bridge and the friends intersect, of course. I mean, this Saturday I'll play with Bill at 10:00 my time, 8:00 his time. We'll play for a couple of hours.

Charlie Rose: And you always win?

Warren Buffett: No. I'd tell you so, but you'd check with everybody --

Charlie Rose: That's -- I would, too.

Warren Buffett: Yeah.

Charlie Rose: The notion of investing for you. What are you looking at when you read? You are looking for an interesting company? You are looking for --

Warren Buffett: I'm looking for business I can understand. I'm like a basketball coach. If I walk down the street, the first thing I look for is seven footers. And now, once I find a seven footer, I still have got to figure out whether he's coordinated and whether I can keep him in school and all those things. But if some guy comes up and he says, you know, he's 5'6 and he says, you know, wait until you see me handle the ball and all that, I'm not looking for those kinds.

Charlie Rose: You want to look up at your players.

Warren Buffett: Yes. When I first started, I used to find a lot of seven footers. Harder to find seven footers now, because my universe isn't as big. But I look for things I can understand. I think I know what the economics of the business will look like five or 10 or 20 years from now. And it doesn't mean, you know, I understand what a computer does, but I don't know who is going to be making lots of money off the computers 10 years from now any more than I knew who was going to be making a lot of money off of television sets back in 1960. Turns out nobody was.

Charlie Rose: But you've always, always taken the position that really you don't want to make speeches except to business students and to kids.

Warren Buffett: Just to students, yes.

Charlie Rose: What's the idea?

Warren Buffett: The idea is that they listen. And you may change some lives. I mean, I -- the things I heard when I was 20 from somebody I wanted to listen to changed my behaviors in ways. And the people I listen to at age 74, I want to be entertained, all that, you know.

Charlie Rose: But it's not going to change your life.

Warren Buffett: That's not going to change anything. So if I talk to a bunch of 50- or 60-year-olds, basically they want to be entertained and they want predictions. But if I talk to 20-year-olds, A, they ask -- or 25-year-olds, they ask me the questions, what's on their mind. And they really get to what's on their mind, and they listen. And you can see it in their faces. And then they write me afterwards, and it changes some lives. The biggest thing we talk about, and I know it resonates with them, because a lot of them are thinking they ought to go into this line or that line, because it will look good on their resume or they'll get a little more experience. I tell them, if you wait until you're 80 to do something you like, I say that's like saving up sex for your old age. You won't have a passion for what you do. Why go through life waiting for the big moment when you're 82?

Charlie Rose: Preparing for something else.

Warren Buffett: Yes, right. It doesn't make any sense. It doesn't make any sense. I tell them, you know, basically unless Shirley MacLaine is right, you only live once. And we go from there.

Charlie Rose: No evidence yet that she's right.

Warren Buffett: I hope she's right.

Charlie Rose: I do too. Talking to students about life and business is one of Warren's passions. He does it more and more these days. From all over the world, they make a pilgrimage to Omaha. One such appearance that was filmed for public television was at the University of Nebraska in Lincoln, where he appeared with his friend Bill Gates.

Unidentified Female: Hi. My name is Nicole Brockhaus (ph). I am a senior business administration major here at the university. And I was just wondering, what is the best piece of advice you've ever been given and how has it impacted your personal or professional lives?

Warren Buffett: I think that, you know, I got an awful lot of good advice from my dad. And he didn't lay it on me. I mean, he just, you know, you picked it up from him. But there was never any of this, you know, do this, do that type of thing at all. But I think he really taught me that it's more important in terms of what's on your inner scorecard than your outer scorecard. Some people get into a position where they're thinking all of the time of what the world is going to think of this or that instead of what they themselves think about it. If your inner scorecard, if you're comfortable with that, I think you're going to have a pretty happy life. And I think the people that strive too much for the outer scorecard sometimes find that it's a little hollow when they get all through.

Unidentified Female: Hello. My name is Kim Martin (ph). I'm a senior finance major here at the university. My question is, how do you instill ethical leadership throughout your organization? And to begin with, how do you know that the management one level below you is making decisions that would parallel your own?

Warren Buffett: We have all the money we need. You know, we'd like to have more, but we can afford to lose money. But we can't afford to lose reputation, not a shred of reputation. And therefore I ask the managers, I ask them to judge every action they take not just by legal standards, although obviously that's the first test, but also by the test -- what I call the newspaper test. How would they feel about any given action if they knew it was to be written up the next day in their local paper to be read by their family, by their friends, by their neighbors, written by a smart but kind of unfriendly reporter. And if it passes that test, it's OK. And I tell them if anything is close to the lines, it's out. And they can always call me if they wanted to check something. But if they call me, there's something wrong with it probably anyway. And that's about it.

Bill Gates: In Microsoft's case, our top management team, the majority of them joined us right after whatever degree they got, if any.

Warren Buffett: I shoul mention that I am the only college grad up here.

Charlie Rose: You've made a point to see almost any group of students who will come to Omaha. What is it about that? What do you get out of it and what do you think they get out of it?

Warren Buffett: Well, I like teaching. I mean, I taught my first class when I was 21. And I just enjoy it. I enjoy the interaction. I mean, it's fun to sit there and have them throw questions at me. And so I've always enjoyed doing it. And I do as much of it as I can.

Charlie Rose: Where is their curiosity?

Warren Buffett: Where is it?

Charlie Rose: Yeah. What is it -- what questions do they ask?

Warren Buffett: They ask a lot of -- they're business students, a lot of them, and so they're interested in markets and business and all that. But they're also interested in their own lives. And that's when it gets the most interesting. They ask me personal, a lot of personal questions, and I answer them. And it's interesting to know what's on their mind, because they're groping. I mean, they're looking for the road they're going to take in life. And a big part of that is the business and making some money and all of that, but that isn't the only part of the road. And we have good discussions about that. And I enjoy it.

Charlie Rose: And about values and about the notion of friendship and the notion of --

Warren Buffett: And how you're going to feel about yourself when you're 70 years old, and what -- looking back, what you'll feel good about and how you get there. I mean, I want them to reverse engineer their life, you know, basically.

Charlie Rose: To look at what you would like for it to be at the end.

Warren Buffett: Sure. And work backwards.

Charlie Rose: And then ask yourself, how do I work. Buffett tells students about the inherent advantages of where you were born.

Warren Buffett: Let's imagine that it's 24 hours before you're born. And a genie comes and he says, Charlie, you really look like you've got good judgment. I'm going to give you an enormously important task. I'm going to let you design the world into which you're going to be born in 24 hours. And you say to the genie, I appreciate the responsibility. You picked the right guy. But what's the catch? I mean, there has got to be. The genie says, there's just one catch. Before you arrive into that world, after you've designed the rules, you're going to go over that big barrel over there, and there's 6 billion tickets in it, and you're going to pull a ticket out. That ticket may say male, female, may say rich, poor. What kind of a world do you want to have not knowing what ticket you are going to get? I call that participating in the ovarian lottery. I got a ticket that said United States. You did too, you know. I got a ticket that said smart about certain things. All of that helped me. But I say, you should design a political system that will deliver lots of goods and services to people, but then will search for fairness in how those are distributed. So I come into this and abundance is just showered on me, because I have a talent. Gates says if I had been born at some other time or some other place a long time ago, I would have been some animal's lunch, because I don't run very fast and I can't climb trees. So I would be talking about allocate capital and that (inaudible) would be coming right at me.

Charlie Rose: And he offers a profound definition of success.

Warren Buffett: Let me tell you a story. It gets there. I have a friend here in Omaha. She's my wife's best friend. Sixty-odd years ago, she was in Auschwitz. She's a Polish Jew. Her whole whole family did not come out. If you talk to her today and you ask her about friendship, she would say she would define it as who would hide me. She says, that's the bottom line. I would say that if you get to be my age, or much younger for that matter and you have a lot of people who will hide you, the people who you want to have hide you would do so, you're going to feel very good about your life. It's the real test. I mean, it's a referendum on how you've lived your life. And you can't fake the ballot box on it. I mean, it's all important. And you certainly want to feel that way with your kids, but it's wonderful when you feel that way with your business associates and those who work around you.

Charlie Rose: Friends, real friends are important to Warren Buffett. And here are three of the closest -- Tom Murphy, former CEO of ABC Capital Cities; Charlie Munger, vice chairman of Berkshire Hathaway; and Don Keough, chairman of Allen & Company. TOM MURPHY, FORMER CEO, CAPITAL CITIES/

Abc: Warren would never take advantage of anybody. He's never looking to make a bad deal for the other guy. And he's completely honest and fair with everybody.

Charles Munger: It's the nature of life, that as the old Germans say, you're too soon old and too late smart. Anybody that helps you get smarter a little earlier enormously improves your life. And all we do is prove these simple old adages like that German saying. Warren got me smarter in some ways a little earlier. And that helps me.

Charlie Rose: How close did you live to the Buffetts?

Donald Keough: Well, I lived across the street.

Charlie Rose: Across the street?

Donald Keough: Across the street. We -- I bought a house there around 1959. A three-story house, brick house, tiled roof. Paid $27,500 for it, and there was a young fellow living across the street in another house, big house. He paid $30,000, I think, for his. His name was Warren Buffett. Nobody knew who he was. He was a nice guy. He had -- I think he and Suzy had three kids. We had four, working on five. And you know, I got to know him. He wasn't easy to know, because you didn't see much of him, but my kids did. Of course, the real story is that he came across the street one day and he said, Don, I love your kids. I said, I know. And he said, you know, I was thinking about college, you know, getting kids through college isn't easy. And I said, Warren, I'm working on grade school right now. I'll get around to college a little later. He said, I've started a little fund, people putting a little money into it. And if you gave me, say, $10,000, I think I could build that up into something. Well, Charlie, I didn't give it to him. For two reasons. One, I didn't have it. I could have borrowed it from my father. But I went in to Meckie (ph) and said, can you imagine giving $10,000 to a guy who doesn't get up and go to work in the morning? It was one of my great decisions of my life.

Charlie Rose: If you had given him that $10,000 --

Donald Keough: Don't ask.

Warren Buffett: Yeah, probably over $400 million.

Charlie Rose: About $400 million.

Warren Buffett: Yes. We're still friends, incidentally.

Charlie Rose (Voice Over): Suzy, Warren's beloved wife, unexpectedly died in 2004, one month after she sat down with me for her only television interview and talked about their unique relationship. (on camera): According to him, to me, he would not have made it without you. You gave him something.

Suzy Buffett: Well, I feel really good about that, Charlie, because whoever you are in this life, you don't want to think you've wasted a lot of your energy and love and time on something useless. Warren is phenomenal. And I felt that the best thing I could give him was unconditional love, and I have. And he says, you're like a little watering can, you know, and I'm the flower. And how could you not feel good about that?

Charlie Rose: He made you feel needed.

Suzy Buffett: Very much so.

Charlie Rose: And you knew he loved you.

Suzy Buffett: Oh, I don't know that anyone has ever been more loved. It fits me to be needed and to know that what I have to give is the right thing. And if you have two people -- we just had a lot of love and respect for each other. And that's never changed. PETER BUFFETT, COMPOSER/

Producer: Again, I can't help but relate it to art, because any great novelist, painter, musician is going to need the room to allow that to grow. And something is going to grow if it's in the right soil. And my mother gave him the soil. That's really what it is.

Charlie Rose: Did you get more mothering than fathering because he was so into reading and --

Susan Buffett: Yes, yes. I mean, my mother was there, and she was there and more present, in the sense that my dad was, you know, sitting in his office or room doing a lot of reading.

Charlie Rose: Why did you move away from Omaha?

Suzy Buffett: I'll tell you, I am a person who likes a private life. And I thought, you know, I would like to have a place where I could have a room of my own. It would be nice. Because, you see, physical proximity to Warren doesn't always mean that he's there with you. I mean, you can -- there hasn't been any change in anything because -- which he has -- it took him a while to figure it out, but he figured it out. I said, I'm not leaving you, because I'll be wherever you want me when you want me. But most of the time, when you're in the same house he is or whatever, he's up reading. And that's why I learned to have my own life. We were two parallel lines, and -- but very connected when he was open to connecting.

Peter Buffett: You just got this sense that there were two people that were very much in love, but were sort of becoming disconnected in a certain way. Because my mom loved life. And my dad loved what he's always loved, you know, his work.

Charlie Rose: He loved his work.

Peter Buffett: Absolutely. And so I think what my mom was starting to see coming was this idea of, you know, I don't want to be Mrs. Warren Buffett in Omaha, because she doesn't -- she just can't think of herself that way. She's an independent, strong-willed, giving human being that needs to be connected to a lot more things than what Omaha I think would have to offer after her kids were gone. I mean, she really gave us and my dad everything.

Charlie Rose: Are you responsible for Astrid?

Suzy Buffett: Well, yes. I mean, well, I'll tell you. I call her Aya, that's a term of endearment.

Charlie Rose: You call her what?

Suzy Buffett: Aya.

Charlie Rose: Aya.

Suzy Buffett: It's a term of endearment. When I was singing at the French cafe in Omaha, I was maitre' d, the woman that met you at the door. And she is a very helping, giving person. And between sets, she would always bring me tea and we would sit and talk. And we became very good friends. Then when I moved to San Francisco -- I mean, it would have been all right for some other person, but Warren can't find the light switch, and it's probably my fault. But I don't take all the blame (ph) for that. So then I called Astrid, I said, Astrid, will you make Warren -- make him some soup, go over there and look after him, because he's not going to make it. I mean, he's different than a lot of guys. Because we see each other all the time and we do things. But he just can't -- no, he can't function.

Charlie Rose: She went over and stayed.

Suzy Buffett: Yes. And stayed. And that was -- she's done me a great favor, let me tell you.

Charlie Rose: She took care of your man for you.

Suzy Buffett: She did. And she takes great care of him. And he appreciates it and I appreciate it. She's a wonderful person.

Charlie Rose: And they go out to dinner and everything.

Suzy Buffett: Yes, they just do.

Charlie Rose: She's a companion.

Suzy Buffett: They do what they do.

Warren Buffett: This is real parmigiana.

Unidentified Female: This is the reason he comes. The hash browns.

Warren Buffett: The has browns, yes.

Susan Buffett: They were really good friends. I mean, I think it's true, they loved each other. I know Astrid loved my mother and my mother adored her. Yes.

Charlie Rose: So your mother's death was tough for her too.

Susan Buffett: Oh, it was very hard for her. Yes.

Charlie Rose: But even more important for her to be strong because --

Susan Buffett: Yes.

Charlie Rose: It's one of those things that is so strange, it works.

Susan Buffett: That's exactly right. I mean, I always think, you know, this is one of those things that unless you're in it, you may not get it. But it works, and it's great.

Peter Buffett: She knew that my dad would need somebody, certainly. And I don't know or I don't remember the exact details, but I do know that there was essentially a -- do you mind making him chicken soup? And one thing led to another, basically, which is phenomenal. I mean, it is extraordinary how that worked out I think for everybody.

Charlie Rose: He was devastated by Suzy's death.

Susan Buffett: Oh, that's an understatement, yes.

Charlie Rose: Couldn't even get out of bed.

Susan Buffett: Well, he did get out of bed. I was proud of him. I didn't know if he would be able to get out of bed for a few months, but he did.

Charlie Rose: I mean, he was just -- because it was so sudden.

Susan Buffett: It was a huge shock. I mean, my mother, you know, she got sick in October of 2004, went through this really awful operation and very difficult radiation and recovery and was doing really well. It was slow, but she was doing really well. And she had an MRI I think just a few days before she died. And she was very excited. She was doing great. And --

Charlie Rose: And didn't die from cancer. Died from a stroke.

Susan Buffett: No, she didn't die from the cancer.

Howard Buffett: You know, I think that for any of us, it was hard to imagine her ever being gone. I'm sure that's probably natural --

Charlie Rose: He said to me he thought he would go first.

Howard Buffett: I think we all thought that. I mean, I would have said the same thing if you'd have asked me that question. And I don't know why that is. But you know, she was the true matriarch of the family. And so I think we just -- for some reason, we felt that way. And for not any logical reason, but you know, that was just a -- I never asked Suzy or Peter how they felt, but I mean, that would have been my answer to the question, is that I just thought that she would have been around towards the end. And I think that, you know, he's still adjusting to it. I mean, it probably takes years to adjust.

Charlie Rose: Five years, he said I'll be the same. He told me five years from now, I'll feel the same way.

Howard Buffett: And that's probably true.

Charlie Rose: Can't talk about it, though.

Howard Buffett: Well, that doesn't surprise me. I mean, you know, she was something very special.

Charlie Rose: Has he changed?

Peter Buffett: I think he has a little bit. He's never too busy or uninterested, which is fantastic. And that has only increased. I think that's the biggest thing over time, and specifically since my mom's death.

Charlie Rose: That he's more available?

Peter Buffett: Well, just greater interest in being in touch. You know, my show was on the Mall in Washington when the Smithsonian opened their National Museum of the American Indian. And I called him up and I said, you know, normally I would call my mom and I'd tell her how excited I was, and then she would call you and tell you how excited I was. So I'm calling you and telling you, you know, because she's not here anymore.

Charlie Rose: He has said there's nothing more important in life than to have someone you love who you know loves you back.

Howard Buffett: Well, I mean he would know that with her. There's no question about it.

Charlie Rose: This is a remarkable woman.

Warren Buffett: Yes.

Charlie Rose: You know, and the pictures of her -- every picture I would see of Suzy, she's smiling.

Warren Buffett: It's going to be hard to talk about.

Charlie Rose: I know. But you've got to talk to me about it, because she talked about you.

Warren Buffett: Charlie, I'd like to talk about it, but I can't.

Suzy Buffett: There's no finer human being than who he is. So I overlooked the money.

Charlie Rose: Two years later, Warren Buffett decided to give $31 billion to the Bill and Melinda Gates Foundation and $6 more billion to family foundations. What surprised you about the reaction? And I'll tell you what surprises me.

Warren Buffett: Well, it just surprises me that there was so much reaction, to tell you the truth.

Charlie Rose: The whole thing.

Warren Buffett: Yeah.

Charlie Rose: But when you think about it, I mean, it has so much drama, that the second richest person wants to give his money to the first richest person.

Warren Buffett: I could see that angle. Yes.

Charlie Rose: Yes, that makes it --

Warren Buffett: If it was the 20th or something like that, it wouldn't have had the same impact. Yes.

Charlie Rose: And its' so far ahead of everybody else that it is just, you know, that makes it -- the other thing that surprises me --

Warren Buffett: We haven't heard from the sultan of Brunei, incidentally.

Charlie Rose: Yes, exactly. Where is he? The other thing is everybody asks about the kids as if somehow the kids are going to be pissed off. It was sort of a surprising thing to me that somehow -- and to know your kids and how much they love you and what a great family it is, it's like the thought never occurred, yet everybody wonders, what about the kids.

Warren Buffett: They think it's the best thing that ever happened. Two of the three kids have told me in the past -- I'd set up these small foundations seven or eight years ago for them, and they had a little -- they have told me they would rather have me give more money to the foundation than to give that same money to them. They're more -- they'd say they don't need money. And they consider themselves ungodly blessed, and they love working with the foundation. Literally two of the three have said, come up to me, you know, at a Christmas time when they thought I might have been adding to the foundation, they said, don't give money to me, give money to the foundation.

Charlie Rose: You also had a wonderful marriage.

Warren Buffett: Right.

Charlie Rose: Have the things that have happened since 2004, given you a sense to put all that in context?

Warren Buffett: It's always tough, Charlie.

Charlie Rose: But this in a sense, it seems to me, and I've said this on a previous conversation we had here at this table, is so in touch with the spirit.

Warren Buffett: Yeah, it's the right thing to do. And Suzy would have thought it was the right thing to do.

Charlie Rose: When you think about the future, is it just continuing to paint the picture?

Warren Buffett: Absolutely. It doesn't get any better than this. I mean, I don't know how long you can do it, but you're just plain lucky in life if you get to do something that you love doing with people that you love being around.

Charlie Rose: Tomorrow, how Warren Buffett turned a $9 per