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gdefelice:

Good notes. I'm sorry I didn't meet you.

I'd like to supplement with my own notes.


Q: Why isn't your estimate of Intrinsic Value published in WESCO's annual report anymore?
CM: Got tired of it. We began because people thought WSC was a better buy than BRK because it was smaller. We wanted to throw cold water on that.

Q: Why does BRK hold bonds?
CM: We can't find attractive stocks. Our default option is bonds, generally mortgage-backed securities.

Q: Have ethics on Wall St. always been like this?
CM: Ethics on Wall St. have been imperfect throughout my life. There was a time when you could buy stock OTC, take it to church and sell to little old ladies pocketing 5% for pushing a no-brainer utility. I thought this was inelegant.
I don't know anyone who doesn't have to fight his company at some point. Still, you don't get credit for not comitting adultry with the Virgin Mary.

Q: How much influence to board directors have?
CM: Not much. The CEO runs the show. Anything else is a fiction.

Q: (Gentleman from Sweden, who gave CM "Ice Age") How did you become interested in scientific methods?
CM:Freshman physics. Newtonian mechanics charmed me. Everyone ought to be forced to take physics.

Q: (Manish from Long Grove, IL based on the language he used I suspect Manish works at ZurichKemper) How do we manage risk when assumptions are wrong? (what if BNC exlusions are insufficient)
CM: Things happen. We try to arrange things so we don't have to go back to "GO" no matter what happens. We're more aware of agregation risk.

Q: What was Ben Franklin's biggest contribution
CM: The example of his life. He did so much. He convinced France to fund the US Treasury during the Revolution. If this was all he did, would he be remembered? I think not. He invented bifocles, founded Univ of Pa,... These have to be considered in total. His contribution is the example of his life.

Q: (Whitney Tilson http://boards.fool.com/Profile.asp?uid=23202 ) What would you change as Emperor of the United States?
CM: Fix central city school systems. Its a hard problem, but not impossible. Fire 3/4 of University Professors. There's too much specialization in academia, and in corporate America for that matter. That's probably what went wrong at Andersen. Everyone looking at their piece of the situation and no one looking at the whole picture.

Q: Will Berkshire ever be in the S&P?
CM: It's your fault we're not in. They're afraid to. The institutions wouldn't be able to buy enogh of the stock and there'd be a huge run-up.

Q: Is Finova a runoff? Are you satisfied with the disclosure of American Express?
CM:Yes, Finova is a runoff. It has been negatively effected by 9/11. We'll still make money, but not as much as we thought.
American Express is satisfactory.

Q: Do you have a computer?
CM: Not so far. I don't even type. T H Morgan banned the use of calculators. If you get the big concepts you don't need minutae. People calculate to much and think to little.


At this point my hand got tired, so I just listened and stopped writing.
While talking about consumer credit he likened people who run up debt and can only make interest payments to serfs. When asked about his involvement in the GenRe merger, he said he was brought in very late in the discussions. "There'll be more situations like that as I grow older". There was also some discussion of Japan. He noted that many insurance companies there are technically insolvent because they signed contracts promising to pay 3% interest to policy holders, and yet the current interest rate is 0%.
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