2000: Could Buffett comment on M&T Bank and Disney?

AUDIENCE MEMBER: Jerry Zucker (PH), Los Angeles, California. Good morning, boss. (Laughter)

Calling your attention to the annual report and major investments, I’d appreciate your comments on two companies.

Number one, M&T Bank, a new name to that list, but not exactly a household name, at least on the West Coast.

And company number two, definitely a household name, but missing from the list this year, the Walt Disney Corporation.

WARREN BUFFETT: Well, we don’t comment much on our holdings, particularly as to purchases or sales, but we do have the CEO — longtime CEO — of M&T here today, Bob Wilmers. Bob, would you stand up? He should be up here somewhere. There he is. (Applause)

Bob is a terrific businessman, a terrific banker, and a terrific citizen. I’ve known him a long time. A good friend of Stan Lipsey, our publisher in Buffalo. Bob runs the kind of a bank that allows Charlie and me to sleep very comfortably.

Someone once said there are more banks than bankers, which is something worth thinking about a little bit. But believe me, Bob is a banker and he’s done a lot for Buffalo.

And he runs — he’s got a — he has a very big ownership position, which he achieved, at least in very large part, through purchase with his own money, as opposed to having options.

He’s got one of the largest ownership positions, probably, among the hundred largest banks in the United States.

And it’s just a very attractive business for us to be in, and we’re very comfortable with it. And 10 years from now, Bob will be here, and I hope I’m here. We will — we’ll probably own M&T.

The Disney Company, our ownership in that fell below the threshold level which we used, although we had ownership. And we think Disney is a terrific business. Michael Eisner’s done a great job there.

We have — as we put in the annual report — we have mildly reduced equities as prices began to — generally — began to get more and more full.

We do not think the general ownership of equities is going to be very exciting over the next 10 or 15 years, so we would like to buy businesses.

We bought a few last year. We had this one we announced last week in the insurance field. We got another small acquisition where we’ve got an agreement with somebody. It’s very small.

But we would love it if those were 10 times that size or 20 times that size, because — you will see more of that, relative to marketable securities, as we go along.

Charlie?

CHARLIE MUNGER: Yeah, regarding equities generally, I think that Fortune article, which was sent out to the Berkshire shareholders this year, should be absolutely must-reading for everybody. In fact, it would be a good thing to read two or three times.

The ideas there sound so simple, that — you know, people have the theory that they must understand it. But I think the world is more complicated than that. I think we are in for reduced expectations eventually, with respect to the kind of returns people have had from investing in stocks.

WARREN BUFFETT: You want to offer any thoughts as to what — that might — what the corollary might be?

CHARLIE MUNGER: Well, I think if you have very unreasonable expectations of life, it makes life much more miserable. Much better to get your expectations within reason.

It’s much easier to reduce expectations to some reasonable level than it is to get superhuman achievements.

WARREN BUFFETT: That’s why my kids were almost delirious when they heard that announcement I was going to give them $300 each and they — (Laughter)

How to be — do you want to be a zillionaire, or whatever it was.

Incidentally, that was terrific of Regis Philbin to do something like that. I mean, all of those appearances [in the video shown to shareholders] are nonpaid, I can assure you. (Laughter)

And those people are good — very, very, good sports. And I thank them.