2016: If Buffett had a silver bullet, which competitor would he take out and why?

AUDIENCE MEMBER: Good morning Warren and Charlie. I am Vandemere Se from the Philippines. Warren, my wife and I sent original paintings to your office two days ago, we hope you like them.

WARREN BUFFETT: Thank you.

AUDIENCE MEMBER: Today — sorry — today Berkshire’s size ensures that it faces competition from numerous businesses. If you had a silver bullet, which competitor would you take out and why? I’m sorry — and you can’t say Donald Trump. (Laughter)

WARREN BUFFETT: Which competitor in which businesses? I mean, you’re asking about which —

CHARLIE MUNGER: Which — which competitor would you kill if you could? I don’t think — I don’t think we have to answer this one.

WARREN BUFFETT: (Laughs) Charlie’s a lawyer. (Laughter)

But I’ve thought about the question. (Laughter)

We have lots of tough competitors. And in many areas, we’re a pretty tough competitor ourselves.

And — and the real — what we want our managers to be doing, you know, is thinking every day about how to achieve a stronger competitive position. We call it “widening the moat.”

But, we want to turn out better products, we want to keep our costs down to a minimum, you know, we want to be thinking about what our customer’s likely to be wanting from us, you know, a month, a year, 10 years from now.

And, generally, if you take care of your customer, the customer takes care of you. But there are cases where there is some force coming along that really is — you may not have the answer for it. And then, you know, you get out of that business.

We had that department store in Baltimore in 1966, and if we’d kept it, we would have gone out of business.

So, recognizing reality is also important. I mean, you do not want to try and fix something that’s unfixable.

CHARLIE MUNGER: We’re not targeting competitors for destruction. We’re just trying to do the best we can everywhere.

WARREN BUFFETT: Spoken like an anti-trust lawyer. (Laughter)

OK. We really hope to be the ones that the other guys want to use the silver bullet on.