1. Would you comment on the quality of earnings in capital intensive businesses, like utilities? Source: BRK Annual Meeting 2009

Buffett: Capital intensive industries outside the utility sector scare me more. We get decent returns on equity. You won’t get rich, but you won’t go broke either. You are better off in businesses that are not capital intensive. Munger: A lot of moats have been filling up with sand lately.

2. How do you grow a small business into a big business? Source: BRK Annual Meeting 2008

CM: It’s the nature of things that most small businesses will never be big businesses. It is the nature of things that most big businesses fall into mediocrity or worse. Most players have to die. We have only made one new business, and that is the reinsurance business run by Ajit. We only created from scratch one small business into a big one. We’ve only done it once.

3. What’s your opinion of gold as an investment? Source: BRK Annual Meeting 2005

We’re not enthused about gold. People say it’s a hedge against inflation, but that’s also true of oil, land, Coca Cola, See’s Candies, etc. I’d much prefer to own land in Nebraska or an apartment house or an index fund as a store of value. We’d rather own an asset that will be useful even if the currency drops to 10 cents on the dollar. People will always need to drink and eat [referring to Coke and See’s]. We wouldn’t trade ownership of businesses for a hunk of yellow metal.

4. Any comments on commodities? Source: BRK Annual Meeting 2006 Tilson Notes 2006

A commodity doesn’t earn anything, so unlike a company, in which earnings are accumulating every year, you have to sit with a commodity and hope for a shift in the supply and demand. It’s a big drawback.


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