Warren Buffett Fox Business Interview at 2014 Berkshire Hathaway Annual Meeting

The interview opens at Berkshire's Omaha headquarters, discussing the record-breaking 38,000-40,000 attendance at the 2014 annual meeting. Buffett discusses the exhibition floor sales including Nebraska Furniture Mart's $40+ million in sales and 15,000 Dilly Bars served. He addresses questions about potentially moving the meeting to Dallas for the new Nebraska Furniture Mart opening but firmly declines.

Buffett makes it clear that his successor will be required to live in Omaha and that Berkshire will never engage in tax inversion strategies like Pfizer's UK incorporation. He emphasizes Berkshire's commitment to corporate citizenship and the fact that America has treated the company very well despite higher tax rates.

Buffett discusses succession planning, confirming candidates are all internal and currently male, though he believes a female successor is likely someday. The likely candidates include Greg Abel, Ajit Jain, and Matt Rose. He emphasizes that his successor will be someone 100% bought into Berkshire's culture, as outlined in the economic principles published in the annual report.

Discussion of corporate tax rates in America, with Buffett defending current rates while acknowledging some business regulations are irritating. He points out that corporate taxes as a percentage of GDP have fallen significantly over 50 years, from about 4% to 1-2%, and were higher under Ronald Reagan. He emphasizes that the corporate sector, including Berkshire, has done well under the current system.

Buffett defends his controversial decision to abstain from voting on Coca-Cola's compensation package rather than voting against it. He explains his compensation philosophy: pay very well for performance, but tie it to what's under the person's control. He criticizes option plans given to 6,000+ people as essentially lottery tickets. The abstention made a statement without declaring war on management he admires.

NYU Stern business student asks about activist investors like Carl Icahn and Bill Ackman. Buffett explains Berkshire will never take a contentious activist approach, preferring to join with people they like and trust. He addresses Carl Icahn's criticism of his Coke abstention, noting they're friends but look for different types of companies. Buffett emphasizes finding wonderful businesses run by people you trust and admire rather than trying to change management.

Discussion of Berkshire's major stock holdings including $16B in Coca-Cola, $21B in Wells Fargo, $13B in American Express, and others. Buffett defends owning $1.3B of Moody's despite the financial crisis rating failures, citing it as a very good business with high margins. For individual investors, he recommends a very low-cost S&P 500 index fund held for 20-30 years.

Bill Gates joins the interview discussing Microsoft's new CEO Satya Nadella (University of Chicago Booth alum). Gates addresses questions about potentially spinning off Xbox and Bing, explaining how Bing technology is fundamental to Microsoft's data center capabilities. He discusses Surface tablet's improving performance after write-offs and the shift from pure software to hardware business models. Gates confirms he would support a spinoff if Nadella thought it right.

Buffett admits he doesn't understand social media companies like Facebook, Twitter, and LinkedIn well enough to invest, despite knowing some will do terrifically. He discusses the declining newspaper business, noting circulation is declining year over year with no evidence of leveling off. When asked about Jeff Bezos buying the Washington Post, Buffett expresses hope for his success, saying if anyone has a chance to succeed, he'd bet on Bezos.

Discussion of Alibaba's upcoming IPO with Bill Gates praising Jack Ma's dominance of Chinese e-commerce and his philanthropy announcement. Buffett reveals he hasn't bought an IPO in literally 50 years, explaining that by design IPOs are rarely priced at a bargain. He notes the best time to buy stocks was fall 2008 when nobody was bringing IPOs. Charlie Munger dismisses both Alibaba and Bitcoin as outside his realm of interest.

Charlie Munger stands by his 'rat poison' characterization of Bitcoin, saying he was 'holding back a little.' Bill Gates distinguishes between Bitcoin's anonymous transactions (which he opposes) and digital currency for financial inclusion in poor countries (which the Gates Foundation supports). When forced to choose between investing in Bitcoin or Blackberry, Buffett says he'd short both, while Charlie quotes Samuel Johnson comparing them to choosing between a louse and a flea.

Discussion of geopolitical risks including Russia's actions in Ukraine and potential for Latvia involvement. Buffett and Munger express concern about border changes setting dangerous precedents. They discuss driverless cars potentially reducing Geico's insurance business but being good for society. Charlie criticizes climate change activists while acknowledging global warming is real. Bill Gates emphasizes the need for breakthrough clean energy innovation over 30-40 years.

Charlie Munger dismisses Thomas Piketty's concerns about income inequality, citing Hong Kong's success despite inequality. Buffett supports unequal outcomes with equal opportunity. They discuss student loan debt as an individual decision to trade future income for current skills. The interview concludes with reflections on happiness, family, continuous learning, and self-education through reading and surrounding yourself with smart people.