2020: The Great Depression was a bump in the road for America.

WARREN BUFFETT: Let’s move on to the — another crisis of a different sort that hit the country. And this, of course, is the 1929 crash which led to the Great Depression.

And here, the Dow Jones average, which we’ll use for this — at that time that’s the one everybody paid attention to — actually the second most important average at that time, if you look at the papers, was the New York Times average which has disappeared. And of course, the Standard and Poor’s has probably, regardless, is a superior yardstick, but the Dow Jones is a perfectly adequate yardstick.

And on September 3rd, 1929, the Dow Jones average closed at 381.17, and people were very happy buying stocks on margin. It worked wonderfully. And the roaring ’20s had a good feeling to it with the auto coming of age, and the day of air travel coming along, and all kinds of new appliances, and the telephone getting wider use. Believe it or not, that hadn’t really caught on that much prior thereto. But the movies were coming on. It was a happy place.

And then, of course, if we’ll move to the next slide, we’ll look at what happened in the couple of months after September 3rd. And the Dow Jones average almost got cut in half. And that was pretty impressive until we had this recent situation where in a shorter period of time, we lost about a third.

But the — the — the crash — and there’s a great book about it called “The Great Crash” by John Kenneth Galbraith.

I may interject one little plug here. There’s a small business in Omaha — and I hate what this —what truncating this meeting or changing it so dramatically has done to many of the businesses in Omaha because I think small business is beneficial — were the beneficiaries of — of a really — they got a lot of business with the Berkshire meeting and they’re going to get it in the future but — but they suffer during a period like this, and they just had a story about the Bookworm.

Well, the Bookworm — if you buy any books that come out of anything I recommend, think about just put in, “Bookworm” — “Bookworm in Omaha.” And “The Great Crash” is a wonderful book, and John Kenneth Galbraith describes it.

And I would like to get into a bit of a personal note which will have some relevance. Not too much, but some relevance, to the story of the Great Depression, because in 1929 my dad, who was 26 years of age then, was employed as a security salesman by a local, small bank.

And he sold stocks and bonds, but he mostly sold stocks. And when stocks fall 48 percent and you were selling them to people a few months ago, you really don’t feel like going out and facing those same people.

So, I think my dad probably elected to, as they say now, shelter-in-place, which means stay at home. And there really wasn’t that much in our house. We just had a small yard. It was wintertime anyway. My dad wouldn’t have been puttering around the yard anyway. And there really wasn’t — you know, television wasn’t there. And he and my mother got along very well.

So, under those conditions, if you’ll turn to the next slide, I was born about nine months later, so —

But at that time — I was actually born on August 30th, but the stock market was closed that day, and so I’m using the previous day’s figures — but the — it wasn’t — I didn’t notice at the time that the market was closed — but the stock market had actually recovered over 20 percent during that 9 1/2 month period or thereabouts.

People did not think in the fall of 1930 — they did not think they were in the great — a great depression. They thought it was a recession very much like had occurred at least a dozen times, although not always when stock markets were important. But we’d have many recessions in the — in the United States over the time, and this did not look like it was something dramatically out of the ordinary.

But — and for a while — actually for about ten days after my birth — that (inaudible), and the stock market actually managed to go up all of 1 or 2 percent there in those 10 days.

But that’s the last day — well, from that point — if you’ll turn to the next slide — the stock market went from a level of 240 to 41, which was a noticeable decline, because if somebody had given me a thousand dollars on the day I was born and I’d bought stock with it, and bought the Dow average, my thousand dollars would have become $170 in less than two years.

And that is something that none of us here have ever experienced that — we may have had it with one stock occasionally — but — but in terms of having a broad range of America marked down 83 percent in two years, and marked down 89 percent of the peak that was September 3rd, 1929, was extraordinary.

And in that intervening period less than one year after I was born — the slightly less than one year — my dad went to the bank where he worked and had his account. And of course, the bank had a sign on it, “Closed,” and so he had no job. And he had two kids at that point.

And his father had a grocery store but — Charlie and I both worked for my grandfather — Charlie worked there in 1940, I worked there in 1941, so we didn’t know each other — but — but my grandfather said to my father that don’t worry about your groceries, and Howard, he says I’ll just let your bill run. (Laughs)

That was — my grandfather was not exactly — he was — he cared about his family, but he wasn’t going to go crazy. And —