Berkshire Hathaway 2013 Annual Meeting Audience Question # 51

Most of Berkshire’s opportunities will be in the United States

Warren Buffett:

OK. Cliff?

Cliff Gallant:

Looking over your first quarter results in the 10-Q, I was wondering… and this might apply more to the noninsurance businesses… what are you seeing in terms of reading the tea leaves for the U.S. economy right now?

Are you starting to see lift? And I’m curious if you have any… if you feel any… need to start to expand Berkshire internationally outside of the U.S.?

Warren Buffett:

Well, we’re willing to go, you know, anyplace where we think we understand what things are… in a reasonable way…what things are going to look like in five or 10 years, and where we get our money’s worth, and good management, and all of the things that we emphasize.

But… so we don’t… we’ve never foreclosed anything, but we’re going to find most of our opportunities in the United States. It’s just the nature of things that this is a huge, huge market for businesses, and we’re better known here.

But, you know, most of our deals will take place here, but we find things outside the United States, particularly in terms of bolt-on acquisitions.

In terms of current business, ever since the fall of 2009, coming on four years, we’ve seen a gradual improvement. And sometimes people have gotten encouraged to think it was speeding up quite a bit, and then they get feeling that… they start talking about a double-dip, which I’ve never believed in and hasn’t happened.

What we see overall is just a slow progress in the American economy. You saw those figures on carloadings for the first 17 weeks. And, you know, we were up 3-and-a-fraction percent, but the other railroads were up 4/10 of a percent, so the industry as a whole might be up 1 percent or thereabouts, a little over 1 percent.

This economy is not… for the last four years… it’s not come roaring back in any way, shape, or form.

It’s never faltered, and I wouldn’t be surprised if it keeps going this way.

Now, finally, the overhang in housing ended… it ended about a year ago… but… so we’re starting to get… we’re seeing some recovery in home prices, which has a big psychological effect, and we’re seeing some improvement in construction.

But we don’t want to start overbuilding again. We really want to have housing starts that more or less equal household formation. And I think we’re seeing that.

So if you ask me where we’re going to be when we meet here next year, you know, I think we will have moved forward.

But I don’t think it will be in any surge of any sort, but I don’t think we’ll stall, either.


Charlie Munger:

Well, it’s not a field where…

Warren Buffett:


Charlie Munger:

… I’ve been good.

Warren Buffett:

We do know what’s going on now, though. I mean…

Charlie Munger:

Yeah, we know what’s going on now.

Warren Buffett:

And I guess that ends it?

Charlie Munger:

Can’t make a lot of money knowing what’s going on now.

Warren Buffett:

And you can’t make a lot of money thinking you know what’s going to go on tomorrow if you don’t, either.

We will… we’ll just keep… we keep playing the game. I mean…

Charlie Munger:

Yeah, we keep playing the game.

Warren Buffett:

And if we hear about something tomorrow that we can spend 15 or $20
billion on and we feel we like the business, United States or otherwise, we’ll move in an instant, and if we don’t, we won’t do anything.

And we just never know when opportunity is going to come along, but it does come along from time to time. And sometimes in financial markets, it comes in a huge way. I mean, that will happen from time to time.

We may not see very many more, but most of the people in this room will see four or five times in their… during their lifetimes… they will see incredible opportunities offered in… probably in equity markets… but maybe in bond markets as well.

People… things will happen, and then, you know, you have to be able to act, and then you have… and that means both in terms of having the ability and also having the mental fortitude to jump in when most people are jumping out. OK. Station 6. Charlie, you want to…

Charlie Munger:


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