Warren Buffett Walking Interview - Berkshire Hathaway Annual Meeting 2019

Buffett explains Kraft Heinz $15.4B write-down: intangible asset impairment because they paid too much for Kraft (not Heinz). Unit sales of top 10 products remain steady - habits don't change much. Population grows 1%, food consumption grows 1%. Snickers #1 candy bar for 40 years. Real issue: power shift from brands to retailers. Private label stronger in UK, growing in US. Canned corn example: name brands can't charge 25% premium.

Buffett addresses succession concerns: Berkshire IS the brand, not Warren. It's a self-reinforcing culture that exists with managers, directors, and unique shareholder base. Will continue stronger than ever after Warren - just use cardboard cutout. Annual meeting example: 600+ employees voluntarily give up weekend to work booths, all smiling. They feel being part of Berkshire is something special.

Buffett's effusive praise for Bezos as potentially greatest manager ever. Started with commodity (books) available to anyone, no proprietary rights. Brilliance: combined three elements others spent fortunes developing (internet, payments infrastructure, delivery) in optimal way. Amazon Prime genius: copied Saul Price's Costco membership model - keep away low-value customers, lock in big spenders who validate membership through purchases. 100M+ members paying $125. Warren admits he was 'idiot' for not investing.

Candid admission: Amazon taking share from 'probably all' Berkshire brick-and-mortar businesses. Success factors: tremendous customer base with high satisfaction, and delivery excellence - which Buffett thought would be very difficult to execute. 'Everything store' value proposition: comprehensive selection saves time, items arrive immediately.

Buffett's humility about identifying future great managers: can't pick winners from 100 top MBA grads, but can recognize success after 20-year track record. Telling anecdote: Jeff Bezos attended Buffett's 1998 Sun Valley talk listing 2000 failed US auto manufacturers (60 pages, only 3 survivors). Bezos asked for list to show Amazon troops 'this is a tough game' - shows his realism and preparation for competition.

Investors push for dividend from $112B cash pile. Buffett clear: not happening ('no way...no not yet'). Will find uses for money. Perspective: had more cash relative to size in 2007-2008. Buyback threshold: look at past quarter purchases to infer price level, but it's moving target based on alternatives. Personal note: until age 65-70, Warren never held cash - always fully invested ('rhinophobia' - fear of being idle).

Asked about Boeing 737 MAX crisis: Buffett empathizes with complexity of running large corporation (Berkshire: 390K employees, millions of parts, millions of customer interactions). Nothing will be perfect. Aircraft industry record extraordinarily good, planes incredibly safe vs 50 years ago. Auto safety improved 16x since 1930s (16 deaths/100M miles → 1). Would fly 737 MAX without hesitation the day FAA re-certifies.

Healthcare venture with Bezos/Dimon: $3.3-3.4T industry (equals total federal revenue). Every dollar has entrenched constituency. Herculean task, odds against success. But three of them uniquely positioned - can commit 10 years and 'real money' (never discussed specific amount). Beautiful detail: no legal partnership agreement, just trust - each pays expenses and settles up later. If private sector doesn't improve, will go public.

Two days after 2016 election, Warren's biggest concern was nuclear weapons - still is ('nothing compares'). North Korea missiles show we're 'rolling dice every day.' Can add cyber to WMD list. If playing odds: biological weapons most concerning - easier to execute, plenty of bad actors. Anthrax attacks after 9/11 example. Existential threat to 'most wonderful world in planet history.' One quality wanted in president: minimize WMD possibility.

Five things making Buffett hopeful about America: Found 'secret sauce' in 1776 - imperfect start (women excluded, slavery) but aspirational framework met over time. Luckiest person in world history: baby born in America today. Know how to make people prosperous, healthy, educated - all trending right direction. Only existential threat: weapons of mass destruction.

Buffett dismisses value vs growth dichotomy as 'ridiculous' - all investing is value investing. Whether buying Apple, banks, or anything: getting lot for your money. Don't buy based on short-term business outlook or next 6-12 months. Long-term: American outlook exceptionally good. Don't predict economy short-term, don't care for investment decisions. Over long periods: Americans will do wonderfully. Even if Fed chairman predicted recession, wouldn't sell businesses.