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Some things I wrote down:

Quotes from AGM 5/2/2009

Asked about teaching financial literacy to people:
Charlie: I don't think you can teach high finance to people who can't use a credit card.

Warren recommends reading Jamie Diamond's JPMorgan Chase shareholder letter. "Very educational"

CM: Its very important if you are in the priesthood to look as though you know more than the people you are preaching to.

WB: You had these people stirring up the Kool-aid and then they drank it themselves. (regarding widespread error on MBS quality)

Regarding how well Berkshire CEO candidates did in 2008 investing, not much better than S&P. CM: We would exclude anyone who went to cash in 2008. They're not dumb enough for us.

Warren would have only 2 classes at business school 1) How to value a business 2) How to think about markets.

WB mentioned a good question he got from a student: "What are we learning that is the most wrong?"

WB talking about how it is hard to get people to change their ideas quoted Max Planck, physicist: "Science advances one funeral at a time."

Wells Fargo is better off relative to competition because of the crisis.

Federal Reserve sets margin requirements. Derivatives (stock options) circument this. They also circumvent the settlement date requirements on stocks.

WB recommended "The Great Crash" by Galbraith.

Finally at 11:11 AM for the first time this meeting: CM: "I have nothing to add."

WB: "Its not the taxpayer's money that we are spending, because we have lowered taxes and tax receipts are down. It will probably be the Chine who are buying T-bills that are footing the bill."

Heavy capital investment companies are the ones that are least good in inflation.

WB: For years the government has been telling people to save, and now that they are saving, the government is unhappy about it.

WB: 90% of share repurchases in the last 5 years were not in shareholders interest." Interesting how many of the companies that were repurchasing in the last 5 years are not repurchasing at lower prices today.

WB: "Charlie is team leader on BYD." Charlie waxed rhapsodic about BYD. "I regard it as a privelege to have Berkshire associated with a company so important to the world."

Credit Default Swaps on Berkshire were driven up by the purchasers of puts from berkshire to "insure" the payout on the puts. The price of that insurance is higher as the puts are worth more to their purchasers. As a result, Berk has renegotiated at least one large put to a lower strike price and shorter term.

WB: Charlie and I disagree, but we never argue.

CM: Unequivocally supported B of A's non-disclosure of material information to shareholders before the vote to acquire Merill Lynch.
WB to Charlie:: "I'm sure they hope you'll be on the jury."

WB: I'm not a big believer in contracts. He couldn't think of any employment contracts they have with any of their managers.
CM: "Our model is a seamless web of trust deserved on both sides."

Warren points out there is a tax advantage to consolidation: profits from see's can be used to fund other owned businesses with no tax consequence.

CM: Now that I'm so near the age of death, I find myself more cheerful about the world economy. (Charlie likes solar energy a lot.)

Regarding compensation committees, Warren said the CEOs aren't looking for dobermans for these committees, but rather cocker spaniels. And not just any cocker spaniels, but "cocker spaniels who are already wagging their tails."

WB: If you take 100 pages to explain how you are paying your CEO, something is wrong.
CM: The way we do it at Berkshire is 1/10 of 1% of America, and the way everybody else does it is silly.

WB: I'm not able to predict the Euro vs the Dollar.
CM: You did pretty well.
WB (chuckling): We did make a couple billion.

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