1994: Will Berkshire ever split its stock?

AUDIENCE MEMBER: My name is Cy Rademacher (PH) from Omaha.

Is there any point at which your stock would rise to the point where you might split the stock?

WARREN BUFFETT: Surprise, surprise. (Laughter)

I think I’ll let Charlie answer that this year. (Laughs)

He’s so popular with the shareholders that I can afford to let him take the tough questions. (Laughter)

CHARLIE MUNGER: I think the answer is no. (Laughter and applause)

I think the idea of carving ownerships in an enterprise into little, tiny $20 pieces is almost insane. And it’s quite inefficient to service a $20 account and I don’t see why there shouldn’t be a minimum as a condition of joining some enterprise. Certainly we’d all feel that way if we were organizing a private enterprise.

WARREN BUFFETT: Yeah, we would not carve it up in $20 units.

We find it very — it’s interesting because every company finds a way to fill up its common shareholder list. And you can start with the As and work through to the Zs and you’ll — every company in the New York Stock Exchange, one way or another, has attracted some constituency of shareholders.

And frankly, we can’t imagine a better constituency than is in this room. I mean, we have — we don’t think we can improve on this group, and we followed certain policies that we think attracted certain types of shareholders and actually pushed away others.

And that is part of our eugenics program here at Berkshire. (Laughter)

CHARLIE MUNGER: Yeah, just look around this room and as you mingle with one another. This is a very outstanding group of people. And why would anybody want a different kind of a group?

WARREN BUFFETT: Yeah, if we cause — if we follow some policies that cause a whole bunch of people to buy Berkshire for the wrong reason, the only way they can buy it is to replace somebody in this room, or in this larger metaphorical room, of shareholders that we have.

So someone in one of these seats gets up and somebody else walks in. The question is do we have a better audience?

I don’t think so. So I think that — I think Charlie said it very well.