Warren Buffett on Charlie Rose 2007 - Marriage, Newspapers, Investment Managers & Trade Deficit

Rose recaps remarkable year: largest philanthropic gift in history, marriage to Astrid Minks, extraordinary 2006 performance. Buffett: 'That's the ultimate luxury in life. If you get paid for doing something that you would pay to do and have the time of your life surrounded by people you love, doing every day what you love doing, it doesn't get any better than that.' On 2006: 'We made some good acquisitions, our managers all came through for us.'

Buffett on Barney Kilgore (WSJ publisher): 'He conceived of a city not defined by geography but by interest. So he created a new city - national in location but a city with common interests. He built the Wall Street Journal to serve that city. Brilliant idea, well executed.' Problem: 'What gave newspapers their marvelous economics is that they were natural monopolies. That monopoly power has decreased. On the internet I can click from LA Times, NY Times, WSJ, Buffalo News, Omaha.com - go all over and there's no effort involved. I don't have to collect eight papers from my doorstep. A whole generation of people don't feel any great need to read a newspaper daily that would have been total addicts back when I was growing up.'

On selling the Wall Street Journal: 'Almost every business is basically just a brick business or lemonade stand - the value is the cash it's going to produce in the future. When you get to sports teams, movie studios, particularly newspapers, it's the value of the cash it's going to produce PLUS the significance that comes with it. So it's A plus B. B is big at the Journal. The Bancroft family doesn't really get the significance - they may get an inner significance, but everybody knows who George Steinbrenner is when he owns the Yankees. They don't really know the members of the Bancroft family. So they have an asset worth a lot of money to somebody else, not just Rupert Murdoch but other people.'

On successor investment managers: 'There'll be other things in the future with similar factors - the human factor will be the bottom of them. They won't be exactly the same but it's like Mark Twain said: history doesn't repeat itself but it rhymes. I have to have somebody in position who can think about those things and never get exposed to getting crushed by the herd.' Process: Give 3-4 people $1-2B each and watch them. 'I'll look at what they've done for themselves the previous 10 years. I can tell much more by looking at how they've swung at each ball over the years than having them hand me some score at the end. It won't just be their performance but how they achieve that performance.' Track record: 'I got out of my partnership, picked three people. 37 years later, all three were good choices - not just because they managed money well but they didn't self-destruct either.'

On current account deficit: 'We are in a sense giving up our assets in order to feed our spending habits. Exactly. It's a drip drip drip kind of thing. It's like sitting down at a table and having one extra piece of toast every day compared to your normal diet. You don't all of a sudden get up and everybody says "My god you look fat, you better give up that piece of toast." But if you keep taking in a couple hundred calories more than you're burning every day over a long period of time, you wake up someday and you find out you're in the kind of shape you wish you hadn't been in. We're the richest country in the world, we've got lots of assets to trade.'

Rose: 'There's one man in Omaha making these decisions out of passion, love, knowledge, principles, architecture of analysis.' Buffett: 'I just got to paint my own painting. I just sit there and keep painting and it'll never be done. I enjoy watching this canvas get larger and larger. But it isn't hard work. If any shareholders are listening, I'd like to tell them I'm bathed in sweat at the end of the day - it just isn't hard. We're gonna play bridge every night. You could make it hard work - fill that whole building with divisions reporting to each other, lots of data on how many boxes of peanut brittle did we sell at See's yesterday. Could be all kinds of make work stuff. We don't make committees. If we had committees we'd need 75 people, then other committees as liaisons, then conferences to report back what they learned. It goes on endlessly. We don't have any of that.' Reagan quote: 'They told me hard work never killed anybody, but I feel I won't take the chance.'

Rose asks about marriage to Astrid Minks. Buffett: 'She takes care of me. She's a terrific gal. I lived with her a long time and Astrid - you couldn't find a better person in the world. My life has been charmed.'