Buffett’s 53rd Annual Letter to Shareholders:
Buffett’s 53rd annual letter to shareholders marked a departure from the traditional format, with the inclusion of the full 10-K report and a shorter letter.

Tax Reform Impact on Berkshire Hathaway:
The 2017 tax changes led to a $65.3 billion increase in Berkshire’s net worth, primarily due to the reduction in deferred tax liabilities. The reduction in the corporate tax rate from 35% to 21% resulted in a $14 billion decrease in Berkshire’s tax liability for unrealized gains in equities. The change in depreciation rules allowed companies to take 50% depreciation in the first year, providing tax savings that will be taxed at 21% instead of 35% in the future.

Tax Reform’s Impact on American Business:
Buffett sees the tax reform as a significant tailwind for American businesses, particularly those with substantial depreciation and bonus depreciation. The lower tax rate will result in corporations paying less in taxes, leading to increased cash flow and potential investment opportunities.

Buffett’s View on Government Control vs. Private Sector Allocation of Capital:
Buffett acknowledges that the tax reform gives Berkshire more control over capital allocation, which he believes is beneficial for the company. However, he emphasizes the importance of considering the potential impact on low-income individuals if tax cuts were directed towards them instead.

Buffett’s Perspective on Berkshire’s Tax Savings:
Buffett expresses his satisfaction with Berkshire retaining the tax savings, emphasizing that it is beneficial for the company and its shareholders. He highlights the potential challenges of distributing the funds to various parties, including the risk of lawsuits from shareholders.

Upcoming Accounting Change and Its Implications:
Buffett mentions an upcoming accounting change that will impact Berkshire’s reported income, making it more challenging for individuals to assess the actual performance of the company’s businesses. The new accounting rules require Berkshire to recognize unrealized gains and losses on its equity investments in its earnings, potentially leading to higher reported income in some years and lower income in others.

Unrealized Gains and Losses:
Berkshire Hathaway now reports unrealized gains or losses on its stock investments through the income account, as required by new accounting rules. This can lead to significant fluctuations in net income, which may not accurately reflect the company’s operating results. Buffett emphasizes that investors should focus on the company’s underlying business performance rather than the reported net income figure.

Stock Market Valuation:
Buffett believes that the stock market is not necessarily overvalued based on long-term fundamentals. He prefers equities over long-term bonds in the current environment, as he expects stocks to outperform bonds over the next 30 years.

Berkshire’s Stock Buying and Selling:
Berkshire has been a net buyer of stocks so far in 2020, despite selling a portion of its stake in Phillips 66. Buffett emphasizes that Berkshire’s stock purchases are based on the intrinsic value of the companies and not on short-term market movements.

Deploying Excess Cash:
Berkshire has $116 billion in cash and is looking for opportunities to deploy it. Buffett expects to find attractive investment opportunities in the future, particularly during market downturns.

Share Repurchases vs. Dividends:
Buffett prefers share repurchases over dividends because they allow the company to retain earnings and compound them over time. However, he is willing to consider a one-time special dividend if it is in the best interests of shareholders.

GE’s Accounting Issues:
Buffett acknowledges that GE has made accounting mistakes in recent years, particularly in the insurance and power businesses. He intends to carefully review GE’s upcoming 10-K report to understand the extent of the restatements and their impact on the company’s financial position.

GE’s Insurance Mis-reserving and Kansas Department Oversight:
Warren Buffett highlights the significant mis-reserving issue in GE’s insurance business, leading to billions of dollars in reserve adjustments. He expresses curiosity about the correspondence between GE and the Kansas Department, the supervising authority, regarding this matter.

Buffett’s Stance on GE Stock and Potential Acquisitions:
Buffett reveals that Berkshire Hathaway sold its GE stock, which was acquired through warrants associated with preferred shares. He emphasizes that GE’s current situation presents an opportunity for potential acquisitions.

Response to Viewer Questions on GE and Siemens:
Buffett clarifies that Berkshire Hathaway would not acquire a healthcare business solely for integration with its healthcare initiative. He indicates that acquisitions would depend on liking the business, finding the right price, and having suitable management. He expresses an understanding of certain GE businesses but acknowledges that he doesn’t fully understand the entire company.

Accounting Changes and GE’s Restatement of Earnings:
Buffett notes that GE’s restatement of earnings is not related to the SEC investigation but rather due to new accounting rules post-tax reforms. He highlights the confusion surrounding these accounting changes, which were previously discussed at the beginning of the presentation.

General Electric Accounting Changes:
Buffett highlights that the restatement of earnings in 2016 and 2017 is not related to insurance reserves miscalculation. He discusses the flexibility companies have in recording costs and revenue, especially in long-term contracts like aircraft or engines. Buffett believes the SEC is examining these practices, as different approaches to contracts can impact earnings over several years.

Wells Fargo Misconduct:
Buffett acknowledges that Wells Fargo had perverse incentives that led to bad behavior and misconduct. He emphasizes the contagious nature of unethical practices and the importance of correcting them promptly. Buffett mentions that former CEO John Stumpf lost his job due to these issues and criticizes the company’s delayed response.

Federal Reserve’s Involvement:
Buffett recalls the Fed’s anger toward Salomon in 1991, emphasizing the significant consequences of flouting regulations. He believes Wells Fargo is suffering due to past actions, not current CEO Tim Sloan’s decisions. Buffett commends Sloan’s efforts to clean up the mess but acknowledges the ongoing process of uncovering and addressing wrongdoing.

Warren Buffett’s Investment Strategy:
Buffett reiterates his confidence in Berkshire Hathaway, where he invests 99% plus of his money. He avoids naming a single stock to invest all his money in, as he believes in diversification and the strength of Berkshire’s portfolio.

Warren Buffett’s Favorite Stocks:
Buffett favors Berkshire Hathaway above other stocks, valuing its stability and low risk of negative outcomes. Apple ranks highly among Buffett’s recent purchases, despite not being his absolute favorite stock.

GE’s Board Restructuring:
GE is reducing its board size from 18 to 12, making significant changes in its composition. Three new directors are joining the board, including former Financial Accounting Standards Board Chairman Leslie Seidman, former American Airlines CEO Thomas Horton, and former Danaher CEO Lawrence Culp. Notable departures include Stephen Mollenkopf, Shelley Lazarus, Jim Rohr, Mary Shapiro, Maren Deckers, Susan Hockfield, Peter Henry, and Andrea Young. Jack Brennan will remain as lead director until 2019 to facilitate the transition to a new lead director.

Warren Buffett’s Perspective on GE’s Changes:
Buffett understands John Flannery’s desire to implement changes and ensure things are done his way. He acknowledges the complexity and breadth of GE’s operations, requiring time to fully comprehend and address all aspects. Buffett does not blame Flannery for not having everything in place immediately, given the intricate and extensive nature of GE’s business.

Berkshire’s Investment Policies:
Warren Buffett clarified that Berkshire Hathaway does not own any gun manufacturers, but he has not imposed a ban on his money managers from investing in such companies. Similarly, the company owns shares in Diageo, a liquor manufacturer, despite Buffett’s personal aversion to alcohol consumption.

Impact of Gun Ownership on Insurance Premiums:
Buffett confirmed that gun ownership does not significantly affect property and casualty insurance premiums from an actuarial perspective. It is not a factor that insurers generally consider when setting rates.

Larry Fink’s Approach to Corporate Social Responsibility:
Joe Kernen highlighted the movement led by Larry Fink, CEO of BlackRock, and others who advocate for investors to have more influence on the companies they invest in. However, Kernen acknowledged the potential pitfalls of taking such a stance, as it could alienate a significant portion of customers.

Buffett’s Views on Corporate Mistakes and Scandals:
Buffett cited the example of Wells Fargo, a company Berkshire does business with, which made significant mistakes that led to scandals. He emphasized that all large companies experience problems at some point, and the best defense is a hotline for employees to report wrongdoing.

Buffett’s Approach to Politics and Social Issues:
Buffett stated that he has not put his political views in a blind trust and has openly supported candidates he believes in. However, he does not impose his political beliefs on Berkshire Hathaway, which has never made political contributions. He believes that companies should be cautious about expressing personal views that could harm their social health and alienate customers or stakeholders.

Personal Opinions vs. Organizational Values:
Buffett criticized the idea of imposing personal views on an organization, citing the example of Walmart and Costco selling cigarettes despite his personal disapproval of smoking. He believes that companies should focus on their core business and avoid becoming entangled in social or political issues that may divide their stakeholders.

Corporate Politics:
Warren Buffett believes companies should be cautious about taking strong political stances that deviate from societal norms. He emphasizes the importance of individual expression but cautions against corporate entities expressing controversial political views. Buffett asserts that companies should avoid making business decisions based on political opinions, citing it as ridiculous to refuse business due to an individual’s gun ownership.

Apple Investments:
Buffett declines to disclose specific reasons behind his recent heavy investments in Apple stock. He maintains that the company’s actions and quarterly reports provide sufficient information for investors. Buffett highlights that Berkshire’s investment views are proprietary and belong to its shareholders.

Buffett’s Investment Approach:
Buffett mentions his past practice of using personal consumption of products as a means to understand the companies he invests in. He acknowledges that he still uses a flip phone, despite Tim Cook’s inquiry about his smartphone usage. Buffett humorously suggests that the market for smartphones may not be saturated until he personally adopts one.

Retirement from Kraft Heinz Board:
Warren Buffett announced his retirement from the Kraft Heinz board, citing time constraints and his preference to focus on Berkshire Hathaway. He emphasized that his decision does not indicate any diminished interest in the business and that Greg Abel and Tracy Britkuhl, Berkshire representatives, will continue to serve on the board. Alexander Van Damme, a significant investor in Kraft Heinz, will join the board, bringing additional expertise and a willingness to travel.

Personal Views and Corporate Activism:
Buffett discussed the importance of personal views and the role individuals should play in shaping society based on those views. He acknowledged the challenges of corporate activism, particularly when addressing hot-button issues where opposing viewpoints exist. Buffett expressed skepticism towards the left’s certainty in their answers and the media’s attempts to shame corporations into taking stances. He questioned whether he would directly engage with Larry Fink, CEO of BlackRock, about his views on corporate activism.

Becky Quick and Warren Buffett’s Discussion:
Becky Quick and Warren Buffett engaged in a discussion touching on various topics. Quick mentioned her preference for blue text messages over green, which Buffett found amusing and questioned her choice. Quick clarified that her preference is based on her perception of Apple users as being more status-conscious and tech-savvy.

Buffett’s Views on Smartphones and Samsung:
Buffett expressed his preference for Apple smartphones over Samsung. He acknowledged Samsung’s success in the semiconductor industry, potentially making it the second highest earning company globally. However, Buffett emphasized that Samsung’s profits in the smartphone business were significantly lower compared to its semiconductor earnings.

Buffett’s Reading Habits and Interest in Financial Statements:
Buffett revealed his enjoyment in reading financial statements of various companies as a leisure activity. He expressed his fascination with the financial details and insights they provide.

Discussion on Leverage and Margin Bets:
Joe Kernen brought up the topic of leverage and margin bets, highlighting a Wall Street Journal article about margin bets contributing to the recent market volatility. Buffett commented on the historical context of margin bets, mentioning the 1929 crash when 10% margins were allowed, leading to significant market machinations and adverse impacts on investors.

Warren Buffett’s Advice on Borrowing Money:
Buffett believes borrowing money is risky and can lead to financial ruin. He emphasizes that borrowing money on securities is unwise. Buffett suggests there are better ways to get rich slowly and have fun while doing so.

Warren Buffett’s Thoughts on Happiness:
Buffett believes that doubling one’s net worth will not significantly increase happiness. He cautions against risking everything for the sake of quick riches. Buffett emphasizes the importance of contentment and enjoying life’s journey.

Warren Buffett’s Samsung TV:
Buffett revealed that he owns an 85-inch Samsung TV, which he enjoys watching sports on. He appreciates the close-up viewing experience that the large screen provides. Buffett acknowledged that he uses voice commands to switch between channels, including SquawkBox.

Berkshire Directors’ Net Worth in Berkshire Stock:
Ajit and Greg Abel, potential successors to Buffett, have a significant portion of their net worth invested in Berkshire stock. Ajit has acquired his Berkshire shares in the open market over time. Greg’s net worth is almost entirely tied to Berkshire, as he has been with Berkshire Energy for over 20 years.

Directors’ Ownership and Alignment with Shareholders:
Warren Buffett emphasizes that Berkshire Hathaway Energy directors have a significant portion of their net worth invested in the company’s stock, ensuring their interests are aligned with shareholders. Unlike many companies, Berkshire Hathaway does not grant stock options or restricted shares to directors. Directors and officers do not have liability insurance, making them financially responsible for their actions.

Real Estate Brokerage and the Impact of the Internet:
Buffett acknowledges the rise of internet-based real estate brokerage platforms like Redfin, which offer lower commissions compared to traditional brokers. He believes the personal and complex nature of home buying will continue to require a human touch, even with technological advancements. Buffett expects the real estate brokerage industry to remain largely person-to-person in the coming years, despite the efforts of internet-based operations.

Investment Team’s Role in BYD Acquisition:
Charlie Munger initiated the BYD investment, highlighting the exceptional leadership of the company’s CEO. Warren Buffett initially hesitated but later acknowledged Munger’s foresight. BYD’s success has reinforced Buffett’s admiration for the company and its management.

Precision Cast Parts (PCC) Acquisition:
Buffett described the PCC acquisition as a long-term bet on Mark Donegan’s leadership and operational expertise. Donegan’s focus on innovation and efficient manufacturing has contributed to PCC’s success within Berkshire Hathaway. While PCC’s earnings have not fully met initial projections, Buffett remains confident in the company’s long-term prospects.

Relationship with Investment Gurus Todd and Ted:
Todd Combs and Ted Weschler manage independent investment portfolios within Berkshire Hathaway. Buffett trusts them to make their own investment decisions, recognizing their complementary skills and perspectives. Combs and Weschler’s contributions extend beyond investment management, including involvement in various strategic initiatives.

Buffett’s Limited Involvement in Combs and Weschler’s Investments:
Buffett does not actively discuss investment decisions with Combs and Weschler in advance. He acknowledges their occasional disagreements on investment choices, viewing these as opportunities for learning and growth. Buffett emphasizes the importance of allowing them to develop their own investment strategies.

Buffett’s Broader Involvement in Berkshire Hathaway:
Combs and Weschler actively engage in various aspects of Berkshire Hathaway’s operations, including the healthcare initiative with Amazon and JPMorgan Chase. Buffett values their contributions beyond investment management, recognizing their diverse skills and expertise.

Samsung Investment:
Berkshire Hathaway, led by Warren Buffett, has invested in Samsung in the past, although it is not reflected in their 13F filings due to it being an international investment. Samsung was purchased at a low price of around a million won, and it later increased in value to around two million three or four won. Buffett attributes this successful investment to Samsung’s strong position as a large, stable company with significant cash reserves.

South Korean Stocks:
Buffett has a history of investing in South Korean stocks, particularly during periods when the market was undervalued, such as after the 1998 financial crisis. He purchased a diverse portfolio of smaller South Korean companies during this time, recognizing their potential as bargains.

Recent Transactions:
Buffett revealed that he sold more of his IBM shares and increased his Apple holdings based on the latest filings. He acknowledges that he made a mistake in selling IBM shares too early, as the company’s value has since increased. Buffett highlights Apple’s exceptional consumer franchise and strong brand recognition as key factors in his decision to invest in the company.

Comparative Analysis of Apple and IBM:
Buffett draws a distinction between Apple and IBM, emphasizing Apple’s unique consumer-centric business model compared to IBM’s more traditional technology focus. Despite their involvement in joint ventures, Buffett recognizes the fundamental differences between the two companies.

Buffett’s Appreciation for Apple’s Ecosystem:
Buffett recognizes the strength of Apple’s ecosystem and the loyalty of its users. He observes how ingrained Apple products are in people’s lives, creating a “sticky” product.

Buffett’s Comparison to IBM:
Buffett draws a parallel between Apple and IBM, highlighting the difficulty of switching from entrenched systems. He notes that IBM’s recent revenue increase was largely due to foreign exchange and new hardware, not a fundamental turnaround.

Amazon’s Disruption of the Cloud Industry:
Buffett marvels at Amazon’s entry into the cloud industry, revolutionizing the sector. He acknowledges Amazon’s long runway and the complacency of other players in the market.

Buffett’s Invitation to the Big East Tournament:
Buffett expresses his fondness for Creighton basketball but declines an invitation to the Big East Tournament due to his reduced travel. He promises to attend if Creighton reaches the finals of March Madness, emphasizing his support for the team.

Buffett’s Perspective on Healthcare Costs:
Buffett views the rising cost of healthcare as a major problem for the American economy. He highlights the significant increase in healthcare spending from 5% of GDP in 1960 to over 10,000 per person annually. He emphasizes the competitive disadvantage this poses for American businesses compared to other industrialized nations. Buffett stresses the need to address the complexities of the healthcare system and find the right CEO to lead the new healthcare company formed by Berkshire Hathaway, JPMorgan Chase, and Amazon.

Vision and Goals:
Aim to deliver better healthcare in terms of quality and patient experience while reducing costs without compromising quality. Focus on identifying and eliminating inefficiencies in the healthcare system. Strive for a sustainable solution that can be replicated by others to address the rising healthcare costs.

Challenges:
The healthcare system is highly complex, involving numerous stakeholders and intersecting companies. Finding a CEO with a comprehensive understanding of the healthcare landscape and the ability to drive meaningful change. Balancing the need for cost reduction with the importance of preserving innovation and advancements in healthcare.

Early Findings:
Potential for significant cost savings through negotiations and streamlining processes. Need for a comprehensive approach that addresses the entire healthcare ecosystem, including hospitals, physicians, patients, and various stakeholders.

Approach:
Open to forming a company but not a requirement at this stage. Seeking a CEO with exceptional leadership skills and a deep understanding of the healthcare industry. Emphasizing the importance of finding the right person rather than rushing the decision.

Timeline:
Aiming to have a CEO in place within a year, recognizing the complexity of the task and the need for thorough evaluation.

Impact on Employees:
Potential for cost savings to benefit employees through reduced healthcare costs and increased benefits. Aim to prioritize employee well-being and satisfaction alongside cost reduction efforts.

Potential Reach:
The joint venture has the potential to impact half of American households, as many receive insurance through companies like Berkshire Hathaway, JP Morgan, and Amazon. Could serve as a model for other organizations to address healthcare costs.

Key Insights from Warren Buffett:
Buffett emphasizes the importance of focusing on the intrinsic value of a business rather than short-term market fluctuations. He believes in evaluating a company’s long-term potential and cash flow generation rather than relying solely on stock prices. Buffett highlights the risks associated with complex financial instruments like the Volatility Index (VIX) and cryptocurrency, which he views as speculative gambling rather than genuine investing. He advises investors to avoid relying on such instruments and instead focus on understanding the underlying businesses they invest in. Buffett discusses the challenge of finding attractive investment opportunities in the current market, where valuations are often high. He explains that Berkshire Hathaway has been a net purchaser of equities in 2018 because they see value in acquiring small pieces of businesses at a discount compared to buying entire companies.

Berkshire Hathaway’s Recent Moves:
Buffett clarifies that he was not involved in Berkshire Hathaway’s recent purchase of Teva Pharmaceuticals, stating that he had no prior knowledge of the investment. Buffett discusses the airline industry, noting its competitive nature and the challenges of entering the market due to low-cost carriers. He acknowledges that Berkshire Hathaway owns stakes in four major airlines but expresses caution about acquiring an entire airline, citing the different economics compared to the railroad industry. Buffett emphasizes the importance of understanding the unique characteristics of different industries when making investment decisions. He compares the airline industry to the railroad industry, highlighting the differences in competition, pricing power, and barriers to entry.

Buffett’s Perspective on Stocks:
Warren Buffett emphasizes the importance of viewing stocks as pieces of businesses, rather than focusing solely on price fluctuations. He highlights Berkshire Hathaway shareholders’ unique perspective, treating the company as a savings account and reinvesting for the long term.

Interest Rates and Stock Prices:
Buffett sees interest rates as a key factor influencing stock prices, comparing them to “gravity.” Low interest rates tend to support higher stock prices, while rising interest rates can lead to concerns among investors.

Understanding Stock Coupons:
Buffett explains that stocks are similar to bonds, but with “coupons” that are not yet printed. The value of a stock is determined by the discounted value of these future cash flows, which are influenced by the company’s earnings and reinvestment potential.

Impact of Interest Rates on Stock Valuation:
Buffett illustrates how high interest rates can reduce the attractiveness of stocks compared to bonds. When interest rates are low, businesses with strong earnings potential become more valuable due to the scarcity of attractive investment alternatives.

Inflection Points in Interest Rates:
Buffett acknowledges uncertainty regarding specific inflection points where interest rate changes significantly impact stock valuations. He emphasizes the importance of evaluating businesses based on their earnings potential and reinvestment opportunities, rather than short-term interest rate fluctuations.

The Idiocy of Long-Term Bond Ownership:
Buffett criticizes the prevailing practice of investing in long-term bonds, particularly in the current low-interest-rate environment. He argues that long-term bonds have been a poor investment, especially compared to stocks of businesses with strong earnings and reinvestment potential.

Implications for Retail Investors:
Buffett highlights the common practice of misleading retail investors with simplistic narratives about stock market performance. He emphasizes the need for investors to understand the fundamentals of businesses and the impact of interest rates on stock valuations to make informed investment decisions.

Choosing Investment Strategies Based on Risk Tolerance:
Portfolio diversification is essential, with a mix of stocks and bonds for many investors. Certain individuals may need to avoid stocks due to emotional reactions to price fluctuations. Dumb investment decisions, such as selling stocks based solely on price drops, should be avoided.

Understanding the Long-Term Benefits of Stock Ownership:
Stocks represent ownership in a business, not just a financial instrument. The longer stocks are held, the less risky they become compared to bonds, which increase in risk with longer maturity periods.

The Psychological Barrier to Stock Investment:
Many investors struggle with the psychological challenges of investing in stocks. Warren Buffett emphasizes the importance of educating investors about the nature of stock ownership and business valuation.

Resisting the Temptation of Quick Wealth:
Buffett warns against the allure of get-rich-quick schemes and gambling, which often have unfavorable odds. Investors should avoid chasing short-term gains and focus on long-term investments.

Warren Buffett’s Reluctance to Engage with Social Media:
Buffett has not tweeted since 2016 and expresses irritation with the platform. He seeks a way to stay informed without directly participating in social media. Becky Quick suggests that Buffett delegate tweeting to someone else, but he remains hesitant.

Stock Market Wisdom:
Buffett emphasizes the importance of understanding the business behind a stock investment rather than relying solely on price movements. He encourages investors to focus on long-term returns and avoid emotional decision-making. Buffett highlights the value of patience and emphasizes that the longer stocks are held, the less risky they become.

Twitter Account Security:
The hosts discuss the dangers of accessing someone else’s Twitter account without their permission. They mention incidents where people have pretended to be them on social media platforms. The hosts acknowledge the difficulty in pursuing legal action against these impersonators due to their vast numbers.

Becky Quick’s Near-Hack of David Faber’s Account:
Becky Quick recalls an incident where she and Joe Kernen almost gained control of David Faber’s Twitter account. She expresses fear about the potential consequences of sending out inappropriate tweets and the risk of getting fired.

The Dangers of Twitter’s “Thought Police”:
Becky Quick expresses concern about the “thought police” on Twitter who can tarnish someone’s reputation by retweeting controversial or inappropriate content. She emphasizes the need for caution and advises against using Twitter altogether due to these risks.

TWI (Tweeting While Intoxicated):
The hosts discuss the dangers of tweeting while intoxicated. They advise against TWI (tweeting while intoxicated) as it can lead to immediate consequences.

Shifting the Conversation to Trade Policies:
The hosts transition to a discussion about trade policies and the appointment of Peter Navarro as a special counselor to President Trump. Peter Navarro has strong views on free trade and believes that having a trade deficit is inherently negative.

Trade and the Economy:
Warren Buffett expressed concerns about large trade deficits, stating that they transfer wealth to other countries and can lead to inflation. He believes that trade has benefited the world enormously, but abuses like dumping should be addressed. A world with more trade relative to the total world economy is better than one with less trade.

Trade Policy:
Buffett expressed skepticism about closing borders and believes that more trade is generally beneficial. He advocated for balanced trade but acknowledged the challenges in achieving it. He emphasized the need to avoid artificialities in the economy by restricting or promoting certain industries.

Impact on Berkshire Hathaway:
Berkshire Hathaway has not been significantly affected by trade, although some of its businesses, such as Fruit of the Loom, have been impacted by foreign competition.

Trade and Social Responsibility:
Buffett recognized the negative effects of free trade on certain industries and the individuals who lose their jobs. He emphasized the need for policies to take care of these individuals and address the economic sacrifices they make for the greater good.

Addressing the Roadkill of Free Trade:
Buffett discussed an initiative by Chris Hughes, a former Facebook executive, to address the issue of job losses resulting from free trade. Hughes proposed a program that would provide financial support and retraining opportunities for displaced workers.

The Earned Income Tax Credit:
Warren Buffett supports the earned income tax credit, a refundable tax credit for low-income working individuals and families. He believes it is a better option than raising the minimum wage because it guarantees a reasonable income while preserving the dignity of work and encouraging people to improve their skills. He suggests improvements such as making the credit available on a regular basis throughout the year rather than as a lump sum once a year.

Residential Real Estate:
Buffett likes the residential real estate business over time and values home ownership. However, he is uncertain about the performance of the residential real estate market, particularly the luxury markets in the Northeast, in 2018 due to factors such as high property taxes and the loss of the SALT deductions.

Partnership with Charlie Munger:
Buffett and Munger instantly clicked when they met in 1959 despite their strong-minded and confident personalities. They share a sense of humor and have never had an argument in their entire partnership. They respect each other’s opinions and have a great time working together, agreeing on most things and disagreeing on a few.

Elite Eight Deal:
Becky Quick and Joe Kernen make a deal with Buffett to watch the Elite Eight game if Creighton University’s basketball team makes it that far in the NCAA tournament. Buffett agrees to buy the popcorn and tickets for the game.