Introduction:
Warren Buffett shared his thoughts on dealing with the news media, emphasizing caution and carefulness. He recalled his family’s history in the newspaper business, which influenced his perspective.

Buffett’s Advice:
Buffett compared interacting with the media to “making love with a porcupine” – a delicate and cautious process. He highlighted the importance of accessibility, courtesy, and straightforwardness while interacting with journalists. Buffett mentioned the challenges journalists face in covering complex topics without firsthand experience, using the example of obituaries.

Media Coverage:
Despite his cautious approach, Buffett had significant media coverage, with over 862 articles mentioning him in a single newspaper since 1983.

Family History in Journalism:
Buffett’s grandfather owned a newspaper in West Point, Nebraska, where Buffett’s mother learned to operate a linotype machine at a young age. His mother worked at the newspaper during her high school years and later attended the University of Nebraska, where she met Buffett’s father, who was the editor of the student newspaper.

Newspaper Business and Stock Market Crash:
Buffett’s family’s involvement in the newspaper business and the stock market crash of 1929 influenced his interest in business and investing.

Overview:
In this transcript excerpt, Warren Buffett shares his early life experiences, his entry into the newspaper industry, and his perspectives on the media and finance. He emphasizes the importance of avoiding media interference in one’s life and engages in a Q&A session with the audience.

Early Life and Newspaper Experience:
Buffett’s father initially wanted to pursue journalism but eventually became a stock salesman due to his grandfather’s influence. Buffett was born in 1930, during the Great Depression, which significantly impacted his father’s stock sales. Buffett worked for the Lincoln Journal in college and delivered newspaper routes in Washington, D.C., gaining insights into the newspaper industry.

Media and Finance Perspectives:
Buffett highlights the importance of avoiding media influence on one’s life and career. He discusses the concept of monopoly in the newspaper industry and its impact on his early experiences.

Audience Questions:
An audience member inquires about the accuracy of a statement regarding the national debt and deficit. Buffett clarifies the distinction between actual debt and the present value of actuarial promises in the social security system.

Government’s Role in Social Security:
Buffett explains that Social Security is not an insurance fund but an intergenerational transfer payment. He emphasizes the government’s ability to increase taxes to cover future costs, given its taxing power. Buffett highlights the government’s ownership stake in American corporations through its share of their profits.

Media Endorsement:
Buffett confirms that The Buffalo News endorses Kennedy and that this policy was in place before and continued after their acquisition in 1977.

Endorsement Policy:
The Buffalo News, edited by Murray Light, regularly endorses candidates for various positions. Despite endorsing five congressional candidates from Buffalo, their voting records showed no similarity, suggesting a policy of endorsing incumbents. Buffett believes newspapers should express opinions on all subjects, including endorsements, even if people pay less attention to them in presidential races.

Overlooked Business Stories:
Buffett has been asked about important stories that the media overlooks, particularly in the business realm. Big stories often occur gradually over time and lack dramatic news pegs, making them challenging to cover. He emphasizes the difficulty of writing about and legislating issues that have a slow, glacial-like impact on society.

Policy Cycle vs. Electoral and News Cycles:
The policy cycle is often longer than both the electoral and news cycles. This makes it challenging to address important issues during the news cycle and to write about them in a compelling way. Buffett acknowledges that it’s easier to write about issues after they happen rather than while they are gradually unfolding.

Buffett’s Insights on the Financial Press:
Writing about intricate financial issues is challenging, especially when there’s a lack of expertise within the news organization. It’s difficult to write about undiscovered fraud or problems with long-term implications, as they often go unnoticed until it’s too late. Writing about big stories, such as the fiscal imbalance or population growth, can be challenging due to their complexity and the need for specialized knowledge. Newspapers occasionally publish special reports on significant issues, which can have a significant impact and generate public awareness.

Buffett’s Reading Preferences:
For daily news, he prefers the New York Times, and for in-depth analysis, he recommends Fortune magazine. He emphasizes the importance of obtaining statistical data from sources like Value Line for financial analysis.

Buffett’s Thoughts on Wells Fargo:
Buffett declines to comment on his confidence in Wells Fargo, stating that he doesn’t recommend or comment on individual companies.

Buffett’s Stance on Interviews:
He spends a significant amount of time giving interviews, particularly for financial publications. He avoids profile-type interviews as he believes they can be distracting and take away from his focus on running Berkshire Hathaway.

Interview Frequency and Time Commitment:
Buffett spends a significant amount of time with media personnel, averaging about two hours per week. He prioritizes interviews with reporters who have knowledge and expertise in the subject matter.

Challenges in Media Interviews:
Buffett emphasizes the importance of finding reporters who are knowledgeable about the topic being discussed. He finds it unproductive and uninteresting to engage with reporters who are merely seeking sensational headlines.

Journalistic Criticisms:
Buffett acknowledges public perceptions of journalists as rude, arrogant, and cynical. He highlights the concerns of inaccuracy and predetermined conclusions among journalists.

The Unique Power of the Press:
Buffett recognizes the potential harm that the press can inflict, particularly when stories are inaccurate or biased. He compares the power of the press to that of a federal prosecutor, who can cause significant damage with their decisions.

The Economics of the Newspaper Industry:
Buffett discusses the economic factors that have led to the decline of competition in the newspaper industry. He explains that the essential economics of the business drive it toward one newspaper per city or metropolitan area.

Profitability of Newspapers:
Buffett points out that newspapers can be highly profitable regardless of their quality, due to the lack of competition. He cites the example of Roy Thompson’s newspapers, which had high profit margins despite being considered lousy.

What Determines a Newspaper’s Quality?:
Newspaper quality solely depends on the owner’s wishes, not on profitability or excellence. There is no correlation between excellence and profitability in the newspaper business. Publishers often perpetuate the myth that excellence is the key to survival to motivate their staff.

The Economics of Television News:
In the top 100 television markets, the local news broadcast leader often determines the success of the network nightly news broadcast. The feed-in from the local news before the network broadcast is the most critical factor in determining viewership. Having popular shows like Oprah as a feed-in can significantly boost the viewership of the following news broadcast.

The Importance of Local News:
The feed-in before the local news broadcast is the most critical factor in determining viewership. ABC’s Cap City affiliate is number one in local news in every market due to their smart programming and dedicated anchor persons.

Anchor Person Value:
Anchor persons who draw a large audience are worth more than newspaper writers, especially in larger cities. Jazzing up local news shows can increase viewership, but it has no effect on newspaper readership.

Newspapers vs. Television: Different Dynamics:
People generally only want to read one newspaper a day, while they can easily switch between television channels. If television technology had developed differently, requiring viewers to choose a single channel, one network would have become dominant.

Journalistic Books on Wall Street:
Warren Buffett reads and enjoys journalistic books about Wall Street, such as Michael Lewis’s Liar’s Poker. He believes these books provide valuable insights into the industry and often contain accurate information.

Books and Docudramas:
Warren Buffett spends approximately seven hours daily reading various materials, including novels, journalistic books, and docudramas. He acknowledges that docudramas, such as the screenplay for Barbarians of the Gate, can significantly influence public opinion about individuals, even if they contain inaccuracies. Buffett emphasizes the tendency for authors and publishers to “jazz up” books to increase sales. He personally declines advances on books to avoid feeling indebted to publishers.

The Impact of Docudramas:
Buffett expresses sympathy for individuals portrayed in docudramas, as they have limited control over how they are presented. He highlights the potential negative consequences of docudramas, particularly when they depict events or conversations that may not have occurred accurately. Buffett illustrates this point with the example of a scene in a docudrama showing Nixon and Kissinger praying together during Watergate, regardless of whether it actually happened.

The Importance of Accuracy:
Buffett acknowledges that certain books and docudramas may contain inaccuracies or exaggerated accounts, even if they are based on real events. He emphasizes the need for readers and viewers to be discerning and recognize that not everything presented in these works is necessarily factual.

Media’s Influence on History:
Buffett believes the media has a powerful influence on shaping historical narratives, even if inaccurate, due to its pervasive reach.

Handling Scandals:
Buffett advocates for transparency and honesty in dealing with scandals. He suggests laying out all known facts and avoiding misleading statements.

Lawyers’ Role in Scandals:
Buffett criticizes lawyers’ tendency to advise silence during scandals, arguing that it can worsen the situation.

Solomon Revival Scandal:
Buffett shares his experience managing the Solomon Revival scandal, emphasizing the importance of communicating facts to stakeholders.

Media’s Role in Spreading Rumors:
Buffett highlights the media’s tendency to amplify rumors and misinformation, especially during crises.

Right to Know:
Buffett questions the notion of an inherent “right to know” regarding personal information, especially in cases like Arthur Ashe’s health.

Media Investments:
Buffett discusses the changing landscape of media investments, noting that while still lucrative, it’s not as dominant as before due to increased competition.

Impact of New Technologies:
Buffett explains how the proliferation of electronic highways has diminished the dominance of traditional media channels.

Competition in Media:
Buffett emphasizes the growing competition in the media industry, leading to a shift in profits from media outlets to content creators.

Advertising and Distribution:
Buffett cites examples of how changes in advertising and distribution channels, such as the U.S. Postal Service’s rate changes, can affect media businesses.

Investment Strategies:
Buffett declines to provide specific investment advice beyond what he shares in Berkshire Hathaway’s annual reports.

Emotions and Media Influence:
Buffett acknowledges that the media can influence emotions in the market, but he refrains from discussing the extent of this influence.

News Media’s Influence on the Market:
Warren Buffett emphasizes that the news media often focuses on short-term cycles, making it challenging for them to provide meaningful insights for investors. He highlights the importance of evaluating individual companies and their fundamentals, rather than relying solely on media reports.

Assigning Yourself the Right Story:
Buffett stresses the value of assigning oneself a story to work on, especially when it comes to evaluating investment opportunities. He encourages individuals to dedicate time each day to research and analysis, focusing on understanding a company’s worth rather than following the latest news or market trends.

Journalists Covering Berkshire Hathaway:
Despite their in-depth coverage of Berkshire Hathaway, Buffett observes that few journalists actually invest in the company’s stock. He suggests that journalists may become overly focused on reporting events and miss the opportunity to take advantage of investment insights they gather through their work.

Presidential Campaign Coverage:
Buffett acknowledges the fascination with the horse race aspect of presidential campaigns, both among the public and journalists. He expresses concern that the focus on the entertainment value of campaigns may overshadow discussions of substantive issues and policies.

Quality of News Coverage:
Buffett commends certain newspapers, such as the New York Times and the Washington Post, for their in-depth coverage of political candidates. He contrasts this with network news, which he believes often falls short in providing comprehensive campaign coverage due to time constraints.

Conclusion:
Warren Buffett emphasizes the importance of conducting thorough research and analysis when making investment decisions, rather than relying solely on news media reports. He encourages individuals to assign themselves stories to work on, dedicating time to understanding the fundamentals of companies they are considering investing in. Buffett also highlights the value of quality journalism in providing insightful coverage of political campaigns, urging readers to seek out reputable sources for information.