Billionaire and philanthropist Warren Buffett’s bon mots, or witticism, never fails to enthrall his audience.
Billionaire and philanthropist Warren Buffett’s bon mots, or witticism, never fails to enthrall his audience. That’s the way it was even in Bangalore where he fielded queries from media on a host of topics on Tuesday. Here’s what the world’s biggest investor had to say on different issues:
Investment opportunity in India
This is not primarily a trip to do that. Bill Gates and I are meeting shortly to talk to a group of wealthy people about what we have done in the US with the ‘Giving Pledge’. We have an insurance operation that’s just started here. I will be talking to a lot of people in the next few days and I am sure someone will bring me some ideas.
Regulatory scenario in India
There are various rules to the percentage we can own for various types of businesses and I believe the limit for insurance companies is 26%. We do not have an insurance company here, but have an agency. Obviously, it would be more attractive if we could buy more than 26% of a company. So that is a factor in our decision for investing. You put the same amount of effort in a 26% company as you would in a company that you own 50%. I would say that for the time being our activities in insurance here will be at the agency level.
Advice to Indian equity investors
My advice to Indian investors would be the same as to investors in any other country. Invest in business you know and understand. Don’t get outside your circle of confidence. Do not try to buy and sell actively. Basically, buy into businesses where you feel that they have some kind of a sustainable economic advantage over time, where you feel good about the management and where you are not paying too high a price to make a purchase. That is what I have been doing all my life and it works just fine.
China vs India
The first time I went to China was in 1995 because Bill Gates had arranged a trip with seven couples. My wife and I went there. It (my late visit to India) has nothing to do with the priority of investments or anything of that sort.
Late entry in India
I guess you have got to regard me as a bit retarded because I should have come here (India) sooner. But I have been a sort of a stay-at-home fellow for most of my life and many countries I have not visited, and I wouldn’t name them for the fear of offending them. But I plead guilty to being late.
West Asia upheaval and US interference
We have investments all over the world. There will be things happening such as the terrible tragedy in Japan that affected one of our clients there for example. There have been all kinds of things that have happened in the US over my lifetime - like the 9/11 and the (global financial meltdown) panic in 2008 - but business goes on.
Philanthropy
It is tough. The market system does not give you feedback on philanthropy like it does it in business. If you open a restaurant and the public does not like your food, you know it within days. In business, unlike in philanthropy, you can look for easy situations.
Attractive sectors in India
It would be the same as the US or anywhere else. I will invest in industries which I understand and (feel) are going to do well in the next 5-20 years. There are industries that change rapidly, where there are going to be few successes and more failures. I work for industries with relatively modest changes which are going to do well in the next 5-10 years.
Emerging markets
I don’t consider India as an emerging market. It is a big market. We are looking at larger countries like India, China, UK, Germany and Brazil.
US’s protectionist policy
If we have 309 million Americans, some are going to perceive India as a threat. Whether it’s India, China or Japan, I am an enormous believer in trade which I consider essential for prosperity. The more India prospers, the more US will prosper in the long term.
Corruption
Corruption will be an issue in any market. It is everywhere in various degrees. There have been managements in the US as well with whom I haven’t been comfortable. However, that is not a big hindrance for us.
US economy
US economy is growing steadily but not at a great rate. The most important factor is the underlying resilience of capitalism and the American economy. You see numbers in fiscal and monetary policies, but what you don’t see is the effort of 309 million people to do something better every day. The American economy is getting better month by month.
Investment risks in India
Investment risks are everywhere. I have made plenty of mistakes in my life. I have invested in companies and sometimes misread the future. This has happened to me various times and this will happen to me time and again. I learn from my mistakes and try to analyse the quality of management of a company first.
On Ajit Jain
He is much better than I am. I thank India for giving me Ajit Jain. I met him in 1985, he has made a lot more money for the company than I have. He loves what he does, and is an extraordinary human being. He has exceeded in every single task and has behaved in a very generous way. He is unbelievably loyal, hardworking and smart.
Parting with 99% of his wealth
I have had more than I could ask for. I’ve never given up a meal, watching a movie or taking my family on holiday. I have everything in the world that I could possibly want, and still have a lot left over. That money would mean nothing for me, it would do a lot for other people. I am giving away something which has no value for me.
Starting philanthropy early in life
My wife certainly felt I should. We worked out a plan when we were in our 20s, I didn’t have money then, but I always believed I would have lots later. What I am doing now is what we talked about then.
Going down in history as the world’s richest man, greatest investor or biggest philanthropic I would like to be remembered as the world’s oldest man.
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