Sunday, June 25, 2006

Conversation with Warren Buffett

Well, when we got married in 1952, I told Susie I was going to be rich. That wasn't going to be because of any special virtues of mine or even because of hard work, but simply because I was born with the right skills in the right place at the right time.

I was wired at birth to allocate capital and was lucky enough to have people around me early on - my parents and teachers and Susie - who helped me to make the most of that.

In any case, Susie didn't get very excited when I told her we were going to get rich. She either didn't care or didn't believe me - probably both, in fact. But to the extent we did amass wealth, we were totally in sync about what to do with it - and that was to give it back to society.

In that, we agreed with Andrew Carnegie, who said that huge fortunes that flow in large part from society should in large part be returned to society. In my case, the ability to allocate capital would have had little utility unless I lived in a rich, populous country in which enormous quantities of marketable securities were traded and were sometimes ridiculously mispriced. And fortunately for me, that describes the U.S. in the second half of the last century.

Certainly neither Susie nor I ever thought we should pass huge amounts of money along to our children. Our kids are great. But I would argue that when your kids have all the advantages anyway, in terms of how they grow up and the opportunities they have for education, including what they learn at home - I would say it's neither right nor rational to be flooding them with money.

In effect, they've had a gigantic headstart in a society that aspires to be a meritocracy. Dynastic mega-wealth would further tilt the playing field that we ought to be trying instead to level.

More at the link.

Rich dude with principles. Ain't that a pisser?
Wonder why he isn't complaining about the "death tax"? Maybe because he doesn't want to encourage that kind of selfishness? I wish the interviewer had asked him about that.

I have decided to delay giving away my own vast fortune for a few more years. But if I change my mind, I guess the Bill and Melinda Gates Foundation is as good a place as any. It's not like they are sucking up to me because they need the money.

From Fiddler on the Roof...

Perchik: Money is the world's curse.

Tevye: May the Lord smite me with it. And may I never recover.

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