1996: Why is the ratio of the B shares 30-to-1 instead of 300-to-1 or something in between?

AUDIENCE MEMBER: Good morning. I’m Ruth Owades from San Francisco.

I wondered, how did you decide that the ratio of the Bs should be 30-to-1 instead of 300-to-1 or something in between?

WARREN BUFFETT: Yeah. We wanted to have something that was roughly — would trade, initially, at least, in the thousand-dollar range.

We thought it very unlikely that anyone would find it commercially feasible to set up a trust that offered units that were denominated much below that.

So, that’s as low as we felt we had to go. And we did not want to signal, in any way, that, you know, some sort of last chance, or something like that, to get in for some very low sum for people that, you know, just had some wishes that they could turn a hundred dollars into 100,000 or something.

I get letters from people that, you know, think that somehow that can be done. It can’t be done.

And we don’t want to appeal subliminally or any other way to people who harbor those hopes.

I’m sympathetic with them. But we don’t have the answer to that. So, we went down to the level to match the unit trusts.