Berkshire Hathaway 2018 Annual Meeting Audience Question # 9

How much involvement does Warren have in the day-to-day operations of Berkshire’s subsidiaries?

Warren Buffett:

OK, Station 3.

Audience Member:

I’m Todd Lichter from Boulder, Colorado.

Mr. Buffett, are you still involved in pricing decisions at See’s Candies and The Buffalo News?

And with what other Berkshire subsidiaries do you take more than a hands-off approach?

Warren Buffett:

Yeah, you’re correct that at one time I, and for some… for quite a while… both Charlie and I took part in the pricing decisions at See’s Candy.

And certainly, for some years, particularly with the question of the survival of The Buffalo News was really in question, I definitely took part in those decisions.

In both cases, we had good managers, but still we wanted to… we thought those decisions were important. But it’s been a long, long time… very long time… since we’ve participated in anything like that.

I can’t tell you what the per pound price is for See’s Candy, which is because people, and you’re invited to join this group, send me free candy from time to time.

And I can’t… I really, I can’t tell you the prices at The Buffalo News. All I know is it’s very, very, very hard to move up prices on advertising, generally. So no, we…

The only thing is, Ajit and I talk frequently. And if there’s some very big risk, if somebody wants a $5 billion cover on a chemical plant some way excessive loss of over 3 billion or something… we have a certain amount of fun with him deciding on the price in his head. And I decide in my head, and then we compare notes.

It’s the kind of risk that you really can’t look up in a book and see, actuarially, what it’s fairly… the parameters… are fairly likely to be.

I enjoy thinking through the pricing of that, and I particularly enjoy comparing it with Ajit. So the…

These are just oddball situations, but we do that sort of thing, and we’ve done it for three decades. And it’s part of the fun of my job.

The candy prices, if you got to complain about those, you have to go to Charlie.

Charlie Munger:

Well, the answer is, Warren is still doing it and talking to Ajit, and… but that’s because Ajit likes it that way.

Warren Buffett:

Yep.

Charlie Munger:

We have a very peculiar place where the… where Warren’s contact with the various people elsewhere in the organization largely depends on what they want, not what he wants.

Warren Buffett:

The CEO of one of our…

Charlie Munger:

It’s very unusual, and it’s worked beautifully.

Warren Buffett:

The CEO of one of our most successful subsidiaries, I may have talked to… unless I saw him here and just said hello… I probably talked to him three times in the last ten years.

And he does remarkably well.

He might have done even better if I hadn’t talked to him those three times.
And on the other hand, Ajit and I talk very, very frequently. And he’s got the kind of business, A,

I do know… I know more about the insurance business than I know about a good many of the other businesses.

And it’s interesting. And we are evaluating things that you don’t look up in a book, you know. I mean, actuarial talent is not what’s important in the things that Ajit talks to me about. It’s plenty important throughout our insurance operation.

But in these particular cases, you know, we’re making judgments, and his judgment’s better than mine. But I like to… I just like to hear about them. They’re interesting propositions.

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