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'Midas' Buffett says India visit is for TaeguTec

Commenting on whether India will see investments in this financial year, he adds, ³I can promise that our
cheques were clear!´ On any likely interests in the auto sector in India, Buffett says he is a phone call
away for "families that control an auto company and wish to see company grow over time."

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Bhan: India is one of the most vibrant democracies albeit a chaotic one. It is one of the world¶s
fastest growing markets, you have got Ajit Jain in Berkshire Hathaway but yet it has taken you
2011 to discover India, to put India on the Berkshire Hathaway map. What has convinced you or
rather who has convinced you to do so now?

A: I have some pretty convincing associates, including Eitan Wertheimer of Iscar Metalworking and Ajit
Jain. Bill Gates too joined in and said he would like to meet me over here. But the reason I am here is
because of TaeguTec.

Bhan: Can you give us some sense of how soon we could see Berkshire Hathway making a
significant investment into India? Will you be looking at majority control on whichever company
that you do decide to invest in?

A: Just within the last ten days or so, we began an insurance operation here in India. I do not know where
the next opportunity is going to come from. It was almost five and a half years ago that I received a letter
from Eitan Wertheimer of Iscar Metalworking. I didn¶t know I was going to get that letter, it just came in
and we are ready to go.

The same thing will happen in India, I will hear from somebody ± I will be meeting a lot of people in the
next few days and maybe from the next week or a year from now, one of those people may contact me
and that is the way.

Bhan: Are you certain that you will make an investment in India in this financial year?

A: Our cheques were clear, I can promise you that.

Bhan: The average group of people present here is about 40. So, what was Warren Buffett¶s dream
when he was 40?

A: I have always been doing what I loved and so it¶s never been that if I want to get there to some next
plateau then I will be happy. I have been happy as I go along and it¶s been a work in progress. It will
never end. Berkshire is an organization will grow beyond my lifetime. It is not like I have any specific
goals for next year or the year after. I just know if I keep showing up, good things will happen.

Q: Recently, you made an investment in BYD which is new and clean technologies and electric
vehicles. How do you see that your investments in India? How do you see this change of pace on
more of technology and clean energy?
A: Fortunately, I have a partner who is lot smarter than I am. My partner Charlie Munger, who is 87 and
going very strong, he understands a lot of the aspects of technology. So, BYD was his idea and I have
never made a mistake following Charlie.

I am not good at tech matters but I have got a lot of people who are. I don¶t have to be smart about
everything; I didn¶t deliver my wife¶s baby! So, I believe in using people who are smarter than I am and it
is not very hard to find the number that are and certainly in the tech field. I just don¶t have that ability but I
am reasonably good at spotting the people who do have that ability. We do not want to do anything that
curbs the enthusiasm, the innovativeness of the people who work with us and we get the best people and
when you get the best people and you let them go, you get he best result.

Bhan: The auto sector in India is one of the fastest growing in the world, not just two-wheelers but
also the car segment. The insurance market is something that you are interested in, they do fit in
and they do align with each other. Would the auto sector in general be something that you would
be considering here in India?

A: It is unlikely; I would go into that myself. The ownerships are pretty well established in that field. If one
of the families that controlled an auto company, for some reason thought that being a part of Berkshire
Hathaway would help their company grow over time, I am just a phone call away.

Q: Do you see new challenges for the cross border businesses?

A: There will always be people in all countries that resist change. There will be an element in United
States or in other countries that resist the idea of more trade between countries. I am in exactly the
opposite camp and believe that it will prosper as we do more and more business with each other.

Various countries have various advantages and no country can do all things themselves. As world trade
expands it will mean a better life for people around the world. I have seen more of it in my own lifetime;
the world trade has expanded during my lifetime significantly, including United States where there is
some resistance to trading with the rest of the world. Our exports since 1970 have gone from 5% of GDP
to 12% and our imports have gone from about 5% to more like 16%.

We are benefiting more and more from what the rest of the world does, what the rest of the world
benefiting from what we are doing. There will be people who will fight that. However, over a time, good
ideas prevail and the world 20 years from now and 50 years from now will see far more trade between
countries and will be more prosperous because of it.

Bhan: How real is the threat of protectionism at this point in time? How worried are you?

A: There will always be people pushing for protectionism. If you have 309 million people in a country, it is
human for a number of them that think that the rest of the world is a threat. There will be more people
who will understand and look at the benefits we have obtained from just take these last forty years.

We are living better now in the United States because we are importing 16% of our GDP than we were
when we were importing 5%. So, I believe that logic will prevail over time though there will be plenty of
resistance and Congress will see from time-to-time bowing to protectionist type sentiment. In the end, the
right thing works out.

Q: When there are so many other fields that are more challenging and more interesting why
metal?

A: I received a letter in the fall of 2005 from Eitan, I did not know him or about this company but I
recognized it in this page and half that I that I was hearing from an extraordinary individual about an
extraordinary company. It didn¶t mean that I knew anything about Metalworking myself. I invited Eitan and
his associates to come over and they attempted to educate me. They made a lot of progress; they made
even more progress with my partner Munger who picks up on things better than I do.

It is a very important business. Everything we do in life would not be done as efficiently or as effectively, if
companies like TaeguTec were not turning out extraordinary products and thinking about products of
tomorrow working with the end user. Hence, I regard it as a very exciting industry and I couldn¶t be
happier to be in it.

Q: Parliament session is going on and it is marred by corruption and scams. How this will
adversely affect your investment plans in India?

A: Corruption is in every country, including United States. It is important to us who we associate with and
that is one of the decisions I make when we look at buying a business. When Eitan wrote to me, I
checked out the reputation of the people that I was about to enter into partnership with. So, we are going
to look at every activity we do to make sure that none of that creeps into any of the Berkshire Hathway
companies. As I point out to lot of the managers, which is in the back of the annual report this year, if you
have a city and we have 260,000 people working for Berkshire Hathway companies, there are going to be
something that is wrong.

It is our job to find out soon about those incorrect. We cannot eliminate all wrong doing. You can have a
city of 260,000 people and in that one person doing something wrong. However, our whole approach is to
set a tone at the top that we will move down from the various operations, so the people will know what is
expected of them is good behaviour. It¶s not a big issue but you have to simply draw the line. There is
plenty of good and honest business to be done in this world and we are going to try and get every bit that
we can.

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Bhan: When you invest in the company, you do look at size and size does matter as far as Warren
Buffett is concerned, the bigger is better. Is that going to be the philosophy here in India as well?

A: It will be the philosophy at everyplace, we want, what we need, our present size Berkshire has a
market capitalization about USD 200 billion. So to move to USD 300 billion or USD 400 billion over time,
we need run our present businesses very well and then we need to make big acquisitions. I am looking
for bigger businesses as time goes by. We will find one from time to time and to some extent they seek us
out. We are good home for businesses but they do have to be big and India has got some big
businesses.

Bhan: So, the next deal that you could look at could top USD 9 billion not in India specifically but
globally?

A: I don¶t know what it will be that makes my job so much fun. If I knew what was going to happen
tomorrow, the next day and the next week my job wouldn¶t be as much fun. I tap dance down to the office
every morning because I am just waiting for that letter to come in and most days it doesn¶t but when it
does then that makes it all.

Q: Two of the major economies of the world Japan and US are in doldrums and with crude on the
boil because of Middle East. Do you see the growth continuing across the world?

A: Growth is continuing though it is tough in Japan for a significant period. Japan is an important country
but the engine of growth that is been moving in the last two years throughout a very high percentage of
the world. We have businesses that do business in more than 100 countries and we see practically every
place except in residential construction in the United States. We see growth occurring throughout the
world and thought the Japan tragedy interrupts Japan for a period although it will come back strong. It will
not take the rest of the world off-track.

We have business in electronic components for example and the figure is coming from Asia and Europe
just keeps growing. People are using these things, they are using the products of TaeguTec and you see
growth of TaeguTec occurring and it will continue to grow. Hence, I would predict that the output of the
world a year from now will be up significantly up from what it is now, on per capita basis. It¶s been
happening for two years and it will continue.

Bhan: One of the fear or concerns is that the setbacks are coming one after the other. There has
been Japan, then the crises in the Middle East that¶s led to the crude spike. What worries you?
What is the number one threat to the world economy at this point in time? Are central banks
losing out on options now? We had the quantitative easing take place in the United States,
interest rates at rock bottom, are central banks left with no options on what to do at this moment?

A: They have used most of their ammunition about interest rates. We have had a very stimulative fiscal
policy in United States. We don¶t call it stimulus because when you are spending 10% more of your GDP
than you are taking in as a government that is a huge stimulus. So it is true that those two tools have
been used very extensively. However, the most important point in my view, those are the ones you can
measure; you can measure interest rates and deficits but the one you cannot measure, most importantly,
is the human spirit that wants to do something better tomorrow than the day before.

When Steve Jobs at Apple may be working on some product that you and I don¶t even know about, he is
thinking of something. So, there are tens of thousands of people doing that everyday and that¶s what
makes economies move forward over time. Look at what has happen at TaeguTec. TaeguTec is doing
things better than they were six months ago. Its doing better than it was a year ago and that moves the
world. It can¶t by the story about what exactly it is like Federal Reserves dropping interest rates a quarter
point or something of that sort. Nevertheless, it is what causes the economies of the world to move
forward.

Q: What is your investment plans in the next five years? What are the sectors you plan to invest
in?

A: We don¶t have a master plan at Berkshire. In 1965, Berkshire was a textile company in the North
Eastern part of the United States; it did not have a future. I did not have some plan that some day we are
going to buy the Burlington Northern rail road or anything of that sort. I just kept looking for things that
were commensurate with what I understood and with the resources we had to deploy. At first those were
small things, so we bought some very small operations. However, as time has gone by, we can buy
bigger and bigger things. I still have to keep them within my field of competence, so I have to look for that.

However, I don¶t want to narrow the world down, into saying; I want to buy into this sector or that sector. I
have enough in the whole world as my possibility. So, if you have got a good business and a big business
and you write me tomorrow, I am not going to worry about whether that was on some master plan that I
had some six months ago or a year ago, I am going to be very responsive.

Bhan: Are you going to go back to textile?

A: I still have the scars on my back from that.

Q: What are some of the key attributes you look at when you choose people?

A: I look for passion about what they are doing. I cannot put passion into people, if I handle things right, I
can preserve the passion that is there. It doesn¶t make a difference whether they are 25 years of age or
70 years of age, I am looking somebody who loves their business. I get approached all the time with
companies that are for sale, some of the people love the money that they are going to get, others like the
money but they love their business still. For one reason or another need to find a new home for it, maybe
some complication in the family or taxes or whatever but the one thing I am looking in their eyes is that
they love that business because they are going to keep running it.

We do not have contracts with any of the managers in the 70 plus businesses we have because it
wouldn¶t hold them. If I hand somebody a USD 1 billion dollars for a business and I rely on a contract to
keep them enthused about it six months from now or a year that isn¶t going to work.

What I need is for them to love nothing more than to get up every morning to figure out how to run their
business better. Now they have that passion then Berkshire Hathaway is a good place to keep that from
getting extinguished. We appreciate people like that, they are heroes to us. We find those people from
time to time.

When Eitan came to see me, I knew he was still in love with his business, I knew Jacob was in love with
the business. They are going to be as excited about that business a day later, a month later, a year later
and that is the quality I am looking for. I know these people are all good, and they have built outstanding
businesses. However, I don¶t want the fellow that is going to sell to me and then decide to buy a boat to
spend the rest of his time on it and I am not going to have a contract to keep him on that boat, I have got
to decide whether he really likes to be on a boat or really likes running the business.

Bhan: I want to ask you a question that a lot of entrepreneurs in India dealing with and that¶s the
diversification dilemma. As the Indian market grows, as the global opportunity beckons most
Indian entrepreneurs sometimes perhaps moving outside of their circle of competence. How much
is too much and how would you ask entrepreneurs to deal with this diversification dilemma that
they are currently dealing with in a growing market?

A: There is a temptation for some people to move outside their competence and that¶s not only true in
operating businesses but its true in investments and it¶s a big mistake. There is usually plenty of money
even in a relatively small circle of component. Thomas Watson who created IBM said I am no genius but I
am smart. He stayed around those spots and some people get inclined to go beyond those spots and
frequently they run into trouble.

You should stick with what you should be good at. You can try to enlarge the area that you are good at
and you should. Over time, at Berkshire we have done a lot of that but just to spread out because you are
getting a little bored with your present business or because there is a lot of cash around and it is a terrible
mistake.

Q: What was your biggest challenge that you overcame in your life?

A: I have over come certain number of challenges but I would say when I was in high school, in college
and shortly thereafter I was terrified of public speaking to a point. I couldn¶t do it and its important you are
able to communicate. If you cannot communicate it¶s like winking at a girl in the dark and nothing
happens. S,o I knew that I had to get over that but I would get physically ill at the idea of trying to do it.

When I was about 21 or so I paid USD 100, I paid in cash because earlier I had gone to the same course
and written a cheque for and then I lost my nerve in and cancelled the cheque. So the second time
around I gave the instructor a USD 100 in cash and I joined a group of about 30 people and none of us
got up in front of the crowd to say our name. It makes you feel good ± I felt like a great speaker compared
to all these other people who couldn¶t give their name. However that course changed my life in an
important way. As a matter of fact, during that course every week the person who did the most with what
they learned in the course in the previous week received a pencil and that was our price and during one
week. I proposed my wife and she accepted and so I got the pencil that week.

Q: India is a big opportunity for solar energy and also for nuclear energy. If you get two letters,
one is from nuclear and solar, which one would you chose to invest and why?

A: I don¶t think it should be either or. We know how to do nuclear now and the acceptance of it was just
coming back in the United States after Three Mile Island from 1979. So, it took 32 years and President
Obama endorsed the idea and the huge resistance to nuclear in the United States had dissipated,
particularly, in the last five years or so. We are about to see significant nuclear development in the United
States.

I personally, don¶t agree with it. I am a proponent to nuclear but, knowing how the American people
reacted before, it's been set back very significantly in United States. But, the answer in my view is more
nuclear but we have to learn to do things better. We always are learning how to do things better, just look
at the cars versus years ago, look at what¶s happened with the internet in 15 years or so.

We are very capable human beings, I am not but, plenty of people are of learning how to do things better
and with the energy resources. I have no doubt in my mind that 10 or 20 years from now we will see a
much different power generation profile in terms of the new addition.

Now there is a big installed base but we will see a different profile and it will be something different than I
can describe today. It will certainly contain a big nuclear component but there will be solar at some point,
never under estimate capability of human mind. We are just opening it up.

Bhan: What inspires you and there has been a lot of speculation on who will succeed you, so I am
not going to ask you who will succeed you, but when will the succession take place?

A: That¶s an even worse question, as late as possible.

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