2011: Will Berkshire grow faster than the dollar depreciates?

AUDIENCE MEMBER: Good afternoon, Mr. Buffett and Mr. Munger. I’m Marc Rabinov from Melbourne, Australia.

As an investor from the Asian region, I am concerned that a weaker dollar will erode the value of my Berkshire stock.

However, Berkshire is highly productive with real pricing power, so can I be confident that over the long term any fall in the dollar will be offset by a rise in the value of my Berkshire stock? And by that I mean in addition to any intrinsic growth in the underlying business.

CHARLIE MUNGER: The answer is no. (Buffett laughs)

WARREN BUFFETT: It would be a lot easier if you just had the Australian dollar go down. The Australian dollar was one of two currencies that we did own last year that contributed to the $100 million profit.

But, no, I cannot tell you what policies will be followed in the United States and what policies will be followed in Australia that will — what they will be and how they will affect the relative value of those two currencies, say, 10 years from now.

I think the movement could be quite dramatic, and I think it actually could be dramatic in either direction. That’s why I don’t know what to do.

But the only promise you’ll get from Charlie and me about Berkshire is that we do every day, as I said in the annual report, try to think about increasing the earning power and the intrinsic value of Berkshire.

And to the degree we increase it, the shareholders will — or to the degree we decrease it — the shareholders will share in exactly the same proportion as Charlie and I do.

We will — our interests are 100 percent aligned. We will make or lose money through our stock and luck, to some extent, will depend — will determine — how well we do.

We know we can’t do remotely as well in the future as we have in the past.

There is no way to compound — there’s no way we know to compound the kind of sums we’re working with now at rates that are anywhere close to what we were able to do when working with much smaller sums. But you’ll get our best efforts.

Charlie?

CHARLIE MUNGER: I can’t add to that.

Australia has these fabulous open pit mines, and at a time when Asia is just totally booming with its demand for metals, I can’t tell you how Berkshire stock is going to perform vis-a-vis mines in Australia.

I think we’ll do pretty well compared to companies here in the United States.

WARREN BUFFETT: Yeah, I think so, too.