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1998: Is insurance Berkshire's most important business?
AUDIENCE MEMBER: Yes, good morning. This is Mo Stintz (PH) from Omaha, Nebraska.
In the past you’ve often said that the insurance operation is the most important business in Berkshire’s portfolio. Is that true? And what are numbers two and three?
I’d also like to ask, is it true that Charlie chose the colors for the cover of this year’s annual report?
WARREN BUFFETT: Did Charlie chose them? (Laughs)
He had nothing to do with them. I chose them. (Laughter)
They were a tribute to the Nebraska football team and Tom Osborne, who you saw. (Applause)
Tom, incidentally, has a very low-key style, and Bobby Bowden, a few years ago, was in Lincoln. And he said that on their first date that Nancy had to slap Tom three times. And somebody said, “Was he that fresh?” And she said, “No, I was just checking to be sure he was alive.” (Laughter)
Tom had a fairly conservative offense for a time in the past, although it hasn’t been so conservative the last few years, but somebody said at that time the most reckless thing he did was to eat some cottage cheese the day after the expiration on the carton by then. (Laughter)
But I — no, I chose the colors. Now what was the question? (Laughter)
What was the question, Charlie? Do you remember?
A memorable question, but give it to us again. (Laughter)
WARREN BUFFETT: Are we back there in zone 8? Oh, the number — yeah, sure.
The question was about the insurance business, which we have said will be, by far, the most important business at Berkshire. We said that many, many years ago, and it’s proven to be the case.
It obviously got a big leg up when we purchased all of GEICO. Insurance, as far as the eye can see, will be, by far, the most significant business at Berkshire.
And the question about two and three: in terms of earnings, FlightSafety is the second largest source of earnings. But we don’t really think of them that way. I mean we do know our main business is insurance, but we really have a lot of fun out of all of our businesses. And I had a great time out at Borsheims yesterday, or at a Dairy Queen.
So it will be accident, to some extent, over the next ten years, what ends up being the second or third or fourth largest. That’ll be determined by opportunity.
We bid on certain businesses — or negotiated on them — that could have been very large businesses if they become part of Berkshire. And that’ll happen again in the future.
So we have no predetermined course of action whatsoever at Berkshire. We have no strategic planning department. We don’t have any strategic plan.
We react to what we think are opportunities. And if it’s a business we can understand, and particularly if it’s big, you know, we would love to make it number two.
CHARLIE MUNGER: I also want to say proudly that we have no mission statement.
WARREN BUFFETT: No. (Laughter and applause)
It’s hard to think of anything that we do have, as a matter of fact. (Laughter)
Yeah, we have never had — I mean I’m sure you all know this. We’ve never had a consultant. And we try to keep things pretty simple.
We still have 12 people at headquarters. We have about 40,000 people that now work for Berkshire. And we hope to grow a lot, but we don’t hope to grow at headquarters. (Laughter)