Warren Buffett followed up the weekend of Berkshire Hathaway Inc. events with a three-hour TV sitdown Monday, repeating many of the comments he made to shareholders Saturday, chatting with Charlie Munger and Bill Gates, and arm-wrestling Ndamukong Suh.
Munger, Berkshire’s vice chairman, said America’s health care system prolongs death unnecessarily. He described hospital rooms where people lie in bed with no hope of recovery and “invoices” pile up, ruining families’ finances.
“I’m ashamed of the way our health care system prolongs death to make money,” Munger, 91, said during the “Squawk Box” program on CNBC, broadcast from the lobby of downtown’s Hilton Omaha.
Munger, 91, acknowledged that health care cost and quality are complex problems but said Europe’s medical system does a better job of end-of-life care.
Later in the day, Gates, co-founder of Microsoft, joined Buffett, Munger and other Berkshire directors for one of their official meetings.
Buffett said the shareholder meeting, which celebrated his 50 years in charge of Berkshire, set an attendance record by beating last year’s 39,000 figure. He had expected between 42,000 and 44,000 people but didn’t give a more precise estimate of the final turnout.
2. Warren Buffett beats Suh, a former Nebraska football star, at arm-wrestling.
Suh, a former Nebraska football star, recently signed a six-year contract with the Miami Dolphins worth a reported $114 million. He said pro athletes need to understand finance so they can manage what they earn during their short athletic careers. Buffett has been an informal financial adviser for Suh and other athletes.
Their arm-wrestling match was brief and not serious.
“I’m toying with him,” Buffett said, then pushed Suh’s arm to the table.
3. Bill Gates: Education is the most difficult problem tackled by the Bill & Melinda Gates Foundation. Charlie Munger said U.S. higher education is the best in the world, but he said he is not good at “insoluble problems” like pre-college education.
Buffett, Gates and Munger said education is one of the country’s most serious problems. Gates said education is the most difficult problem tackled by the Bill & Melinda Gates Foundation, to which Buffett donates billions each year.
Gates said that charter schools are doing a good job of educating kids in poor neighborhoods but that overall the education system has not improved significantly, even though teachers and schools want to improve.
Buffett said people who send their children to private schools may support public schools, such as by voting in favor of school bond issues, but would provide more support if their children and grandchildren attended public schools. He said his father served on Omaha’s public school board in the 1930s because he believed public schools were important.
Munger said U.S. higher education is the best in the world, but he said he is not good at “insoluble problems” like pre-college education.
The three said they don’t know how the Federal Reserve is going to work its way out of the low-rate environment. The United States can’t raise interest rates while European countries, including Poland, keep their rates so low, Buffett said.
“I think the Fed has done the right thing,” he said, but “we have not seen this movie before.”
Buffett spent about 15 minutes again defending Berkshire’s Clayton Homes subsidiary, which was accused in a Seattle Times investigation of predatory lending practices.
He said Clayton’s loans average about $40,000 and said the company loses about $16,000 if a buyer defaults, so it wants its customers to succeed financially.
4 Minimum wages might help some people but raising the earned-income tax credit would be more effective at helping low-income people.
All three said minimum wages might help some people but raising the earned-income tax credit would be more effective at helping low-income people.
Other comments during the program:
>> Munger said he is more concerned about running out of hydrocarbons than about climate change.
>> Buffett and Gates said they favor free trade. Buffett said people and countries should do what they do best and trade accordingly. Central America can grow bananas better than Nebraska, for example.
>> Buffett said 3G Capital, the Brazilian investment company that has partnered with Berkshire in acquiring businesses, cuts costs “humanely” when necessary and wants to build up businesses for long-term growth.
>> Buffett joked that Watson, the IBM supercomputer that was on display at the shareholders meeting, could be set up to answer questions about who will be Berkshire’s next CEO. It could say, “I AM.”
5. Berkshire Hathaway Berkshire would buy its own shares when the price falls below 120 percent of its book value.
>> Buffett said Berkshire would buy its own shares when the price falls below 120 percent of its book value, a policy set years ago.