Berkshire Hathaway 1994 Annual Meeting Audience Question # 46

How the increased speed at which information disseminates in the modern era has affected Warren’s business-buying decision process

Warren Buffett:

Zone 5.

Audience Member:

Good morning, I’m Sarah Pruitt from Milwaukee, Wisconsin.

And I wondered if you feel that the speed with which information is available and disseminated today has affected your business-buying decision process. And do you believe that speed has caused you to miss opportunities?

Warren Buffett:

Question about seas expanding?

Charlie Munger:

No. Does the speed of information today affect our decision-making process?

Warren Buffett:

No, we… I would say that we perform about like we were doing 30 or 40 years ago.

I mean… we read annual reports.

It isn’t the… the speed of information really doesn’t make any difference to us. It’s the processing and finally coming to some judgment that actually has some utility, that is, that it’s a judgment about the price of a business or a part of a business, a security, versus what it’s essentially worth.

And none of that involves anything to do, really, with quick information. It involves getting good information.

But usually that… it’s not… we’re not looking for needles in haystacks or anything of the sort.

You know, we like haystacks, not needles, basically. And we want it to shout at us.

And I would say that, well, virtually everything we’ve done has been reading public reports, and then maybe asking questions around to ascertain trade positions or product strengths or something of that sort.

But we never have to… we can make decisions very fast. I mean, we get called on a business… or we can make up our mind whether we’re interested in two or three minutes. That takes no time. We may have to do a little checking on a few things subsequently.

But we don’t need to get… I can’t think of anything where we really need lots of price data or things like that extremely fast to make any decisions.

We’ve got good management information systems in our operating businesses, but that’s just another… that’s a question of keeping inventories where they should be and all of that sort of thing.

I don’t think the invest… I think you could be in someplace where the mails were delayed three weeks, and the quotations were delayed three weeks, and I think you could do just fine in investing.

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