2011: How do societal issues like clean water affect Berkshire's investment decisions?

AUDIENCE MEMBER: Hi, Mr. Buffett, Mr. Munger. My name is Vern Cushenbery and this question is on behalf of a group of investors that made the trip up today from Overland Park, Kansas.

Given your interest in renewable energy and natural resources, I wonder if you’d be willing to share your thoughts on how a world of limited and depleting clean water supplies and declining food stocks affects your investment strategies and thinking on the future.

WARREN BUFFETT: Yeah, I would say it’s an important subject but it doesn’t affect our investment strategy to any real degree.

In other words, you know, we would love to buy another GEICO. We would love to buy another BNSF. We’d love to buy another MidAmerican.

And we look at those businesses over a long time frame, but we are looking at what we expect their earning power to be three, five, 10, 15 years down the road compared to what we are paying.

So I would say that there are a number of societal issues that really do not enter into our investment or purchase of business-type decisions.

Charlie?

CHARLIE MUNGER: Well, I would advise not paying too much attention to the clean water issue. If there’s enough energy, you can always get enough clean water.

Israel sometimes goes month after month making half its water from sea water. With enough energy, why, you have — the water problem goes away. And that’s very helpful in considering the future.

And regarding the agricultural productivity, I think one of the main reasons for being restrained in the use of hydrocarbons is that modern agriculture won’t work without them.

So I’m a great believer in being conservative, in terms of blowing all the hydrocarbons on heating houses and running cars. I think that — think of how happy we’d be if we’d taken a bunch of that dollar oil in the Middle East and just carted it here and put it in salt caverns.

I mean you could argue that we really screwed up the past, and you could argue all the people who think that our main solution is to drill, drill, drill. They’re all nuts. (Laughter and applause)

It’s probably quite wise to use up the other fellow’s hydrocarbon while preserving our own.

It’s not going away because we are not drilling it now.

But you can see that this will lead into unproductive discussion. (Laughter)