20 Questions for Warren Buffett

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It's that time of year again: Warren Buffett is auctioning off a lunch -- with himself. The eBay auction ends this afternoon. Last year's winning bid hit $2.6 million. As of Friday morning, the top bid was $2.3 million (proceeds go to charity).

Most of us don't have that kind of money. Even if we did, $2 million is a bit steep for a meal, regardless of whom it's with.

But what would you ask Buffett if you had his ear for a few hours? Here are 20 things I'd want to know.

1. You've been extremely open over the years. You give interviews. You write op-eds. Your annual meetings attract tens of thousands. Yet you haven't written a book. Why?

2. It's rumored that you keep around $500 million in a personal portfolio that invests in situations too small for Berkshire Hathaway (NYSE: BRK-B  ) to touch. How has this portfolio done over the years?

3. Your partner, Charlie Munger, has said that if you remove just a few of Berkshire's top investments, its long-term track record is pretty average. Some have used this to claim that at least part -- maybe most -- of Berkshire's success has been a fluke. Is there any merit to that?

4. A lot of Berkshire's success has relied on the decentralization of subsidiaries. That, in turn, is dependent on your ability to find trustworthy managers. But the David Sokol ordeal shows that this isn't fail-proof. Do you worry that a manager could "slip through the cracks," so to speak, and cause irreparable harm to Berkshire? Also, where does the buck stop at Berkshire?

5. You've said in the past that it's a "virtual certainty" the U.S. will experience a nuclear terrorist attack. Where do you get these odds, and how do similar Armageddon probability calculations influence how you manage Berkshire's portfolio?

6. Is whoever replaces you at Berkshire going to have the same investment approach as you do? Would you ever pick a replacement whose style was fundamentally different from yours, but that you still had confidence in?

7. What five laws or regulations could be removed, revamped, or created to help the American economy?

8. A recent paper from MIT talked about how business change and innovation is happening faster today than ever before. How do you find companies with sustainable business models in a world that changes overnight?

9. Berkshire hasn't altered its shares outstanding count in a meaningful way since you took it over decades ago. It hasn't needed to raise equity capital, rarely has it used stock when making acquisitions, and you personally haven't needed liquidity. If you could go back several decades, do you wish your partnership would have just bought the entire company and kept it private?

10. When you started your investment partnership in 1956, there were no large hedge funds, no high-speed traders, and no readily available platforms to access company information. Did that make stock mispricings more common than today? If so, is it even possible for someone today to replicate the success of your early years ?

11. If you could go back 50 years, what industry do you wish you had added to your circle of competence?

12. What's the biggest misconception about the way you invest? What does the media repeat about you that just makes you want to bang your head on the table?

13. If you were to teach a one-semester class on investing, what would the syllabus look like?

14. What investment paradigms have changed over the years? In other words, what used to be an ironclad rule that no long applies to today's economy?

15. Munger says your greatest talent is that you're a "learning machine" -- that you never stop updating your views. What are the most interesting things you've learned since the financial crisis hit three years ago?

16. You're an unapologetic long-term bull on America. But nothing works in certainties. What do you think is the biggest threat to our economy's long-term success?

17. Besides Ben Graham, Philip Fisher, Charlie Munger, Bill Gates, or anyone in your family, who has had the most influence on your thinking?

18. Bill Gates has said that he wants to be remembered for his philanthropy just as much as his contributions to technology. Do you feel differently, given that you've donated the bulk of your fortune to foundations that aren't associated with your name?

19. Be honest. Have you ever Googled yourself?

20. After his lunch with you a few years ago, Mohnish Pabrai said, "The best things about Buffett have nothing to do with investing, but everything to do with leading a great life." Tell me, how do you live a great life?

What would you ask Buffett? Better yet, how do you think he would answer some of these questions? Sound off below.

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics.

Fool contributor Morgan Housel owns shares of Berkshire. Follow him on Twitter @TMFHousel. The Motley Fool owns shares of Berkshire Hathaway. Motley Fool newsletter services have recommended buying shares of eBay and Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (9) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 10, 2011, at 12:49 PM, Glycomix wrote:

    I don't dispute Buffett's long-term investment record.

    These are my questions:

    1. Who is Buffett training to take over Berkshire and what is their track record?

    - Buffett and Munger are in their 80s.

    2. Berkshire is at its lowest point in a year. In six weeks it has dropped about $9.50 over 11%,and $5.00 in the past 7 trading days.

    Recent and predicted Tornadoes and Floods must have hurt insurance reserves. What percentage of Berkshire's business is 'homeowner's insurance'? What is Berkshire's exposure versus cash reserves?

    3. How much of the $5.00 drop is due to ...

    - depression over the May employment numbers

    - contagion worries over Greek debt.

  • Report this Comment On June 10, 2011, at 9:48 PM, adcmelb wrote:

    The only real question for Warren would be about the true nature of the American economy - Berkshire Hathaway is so diverse that he must have some idea if Federal Reserve is accurate in its predictions

  • Report this Comment On June 11, 2011, at 8:39 AM, KCinAustria wrote:

    Answer to Question #10: "If I was running $1 million today, or $10 million for that matter, I'd be fully invested....I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that." --Warren Buffett

    SOURCE: "Homespun Wisdom from the 'Oracle of Omaha'", BusinessWeek, 5 July 1999.

    But I guess that was 12 years ago. I suspect it still applies today.

  • Report this Comment On June 13, 2011, at 12:46 AM, BuyloPESellHiPE wrote:

    20 Answers Buffett may have made

    1) I am not a great writer, my ideas have been said and researched by many and books written already.

    2) I don't have such a portfolio.

    3) Charlie is right ; we have had a few good runs that have made us stand apart; but it was not fluke.

    4) I dont worry about any manager even after Sokol. Look; he was a good guy who made some bad decisions. This could happen again but that is not going to change my strtaegy. As far as the business, the buck stops with the Manager. As far as capital allocation; Me.

    5) We plan for success and only work on those things that we can control.

    6) The person will have the same philosophy and operate with fundamentally the same principles this company was built on.

    7) Well defined Immigration policy (one that is fair for America), A health care law that protects the needy, A tax law that is fair across classes, Never breaking the Social Security

    8) We need to understand the difference between needs and wants before selecting companies.

    9) Yes

    10) The returns of earlier days are impossible because we are much larger today. Nothing to do with years ago and now.

    11) Health Care

    12) Media has been kind to me. Maybe you can stop talking about my replacement so much.

    13) Intrinsic value, Valuation of business, Understanding Moats, Cash

    14) Investment paradigms have not changed just that the number of stockholders has.

    15) I relearned that "History does repeat"

    16) War

    17) The game of bridge.

    18) I would like to be remembered for "Doing the right thing" that I got results the right way.

    19) Yes indeed.

    20) Keep it simple.

  • Report this Comment On June 13, 2011, at 1:09 AM, MyunderratedLife wrote:

    ^regarding what Buylo said: (i'll correct a few things)

    1. He's a great writer, read his partnership letters - witty and educational. The problem is, writing a book is a long and tedious process, I think he just likes running his empire more... besides, he always preferred the "less flattering version."

    2. The portfolio has to exist. He's made numerous "references" that he has a private portfolio (read his comments regarding purchasing/holding WFC in his private portfolio in 2009). The dollar amount and content is what's in dispute. Also he mentioned that before Oct, 2008 his personal portfolio was in cash/treasuries.

    9. I think he would answer that he would do away with Berkshire and just have bought Geico or a similar insurance company instead.

    10. Refer to his "I think I could make 50% on up to tenmillion dollars of capital" quote.

    11. I think this is actually "tech." He noted in a recent interview that if he had a longer investment horizon that he would like to understand tech (in the same breath him and munger talked about Google's "enduring moat."

    20. Do what you love, don't worry about the money. Don't save sex for old age.

  • Report this Comment On June 13, 2011, at 11:00 AM, MonkeyFish912 wrote:

    Buffett's advice: Don't spend 2.6 million dollars on lunch.

  • Report this Comment On June 13, 2011, at 1:08 PM, PhulishMortal wrote:

    "What is your bank account number and PIN?"

  • Report this Comment On June 14, 2011, at 5:44 AM, beechtree1 wrote:

    For ByeloPESellHIPE

    Most of the 20 answers Buffett may have made?

    Most of the answers he HAS already made.

    And how perceptive of Mr Pabrai, it is the quality of the person he has become that's helping him lead

    a great life.

  • Report this Comment On June 27, 2011, at 6:14 PM, krazycanuck wrote:

    To #16:

    Debt. Both government and consumer. Consumer debt must be re-paid eventually, and that debt also incurs interest, which also must be paid, in most cases. This takes disposable income away from purchasing other goods and services. Too much debt will mean too little consumption of these goods and services, or a default (and maybe both). Government debt also incurs interest, which must be paid, even if the principle is not re-paid. Every dollar of interest that is paid is a dollar that cannot be spent on government services or other expenditures, unless they can replace that dollar with tax revenue. Problem is that tax revenue is finite and limited at a certain point, yet governments (and consumers) continue to pile on debts. The bottom line is if consumption chronically exceeds production (or revenue), it will eventually "kill" the economy.

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