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Warren you are a big advocate of index investing and of not trying to time the market but by your having a Berkshire holds such a large amount of cash and t-bills it seems to me you don't practice what you preach I'm thinking that a good alternative would be for you to invest most of berkshire's excess cash in a well-diversified Index Fund until you find an attractive acquisition or buy back stock had you done that over the past 15 years all the time keeping the 20 billion dollar cash cushion you want I estimate that at the end of 2018 the company's 112 billion balance in cash cash equivalents and short-term investments in t-bills would have instead been worth about 155 billion the difference between the two figures is an opportunity cost equal to more than 12 percent of berkshire's current Book value what is your response to what I say and for I forgot to say the question is from Mike elzar who is with the colony group located in Boca Raton Florida that's a perfectly decent question and I wouldn't quarrel with the numbers and I would say that that that is an alternative for example that my successor uh they wish to employ because unbalanced I would rather own an index fund than than carry treasury bills I would I would say that if we'd instituted that policy in 2007 or eight uh we might have been in a different position in terms of of our ability to move uh late in 2008 or 2009 so it it has certain it has certain execution problems with hundreds of billions of dollars than it does if you were having a similar policy with a billion or two billion or something sorry but it's a perfect it's perfectly rational observation and certainly looking back on 10 years of a bull market it it really jumps out at you but I would argue that that uh if you're working smaller numbers it it would make a lot of sense and if we're working with large numbers it's it might well make sense in the future at Berkshire to operate that way you know we committed 10 billion a week ago and there are conditions under which and they're not they're not remote they're not likely in any given week or month or a year but but there are conditions under which we could spend 100 billion dollars very very quickly uh uh and if we did if those conditions existed it would be the capital very well deployed and much better than in an index fund and so we've been uh we're operating on the basis that we will get chances to deploy Capital they will come in clumps in all likelihood and they will come when other people don't want to allocate Capital Charlie what do you think about it well I played guilty to being a little more conservative with the cash than other people and but I think that's all right we could have put all the money into a lot of Securities that would have done better than the s p the 2020 hindsight remember we had all that extra cash all that period if something come along in the way of opportunities and so on it's a sin to be a little strong on cash when you're as big a company as we are we don't have to I watched Harvard use the last ounce of their cash including all their prepaid tuition from the parents and plunge it into the market at exactly the wrong moment and make a lot of forward commitments to private equity and they suffered like two or three years of absolute agony we don't want to be like Harvard because Timber and a whole bunch of things plus Timber and I mean yeah yeah we're not going to change we we do like having a lot of money to be able to operate very fast and very big and we don't and maybe we won't we know we won't get those opportunities frequently I don't think certainly you know in the next you know in the next 20 or 30 years I'll be in two or three times when it'll be raining gold and all you have to do is go outside but uh we don't know when they will happen and and we have a lot of money to commit and I would say that if you told me I had to either carry short-term treasury bills or have index funds and just let that money be invested in America generally I would take the index funds but we still have hopes and the one thing you should very definitely understand about Berkshire is that we run the business in a way that we think is consistent with serving shareholders who have virtually all of their net worth in Berkshire I happen to be in that position myself but I would do it that way under any circumstances we have a lot of people who trust us who who really have disproportionate amounts of Berkshire compared to their net worth uh if you were to follow standard investment procedures and and uh we want to make money for everybody but we want to make very very sure that we don't lose permanently money from anybody for anybody that buys our stock somewhere around intrinsic business value they begin with we we just have a we have an aversion you know having a million plus shareholders maybe as many as 2 million and having a lot of them uh ever really lose money if they're willing to stay with us for a while and we know how people behave if when the world generally is is uh upset and uh they want to be with something I think they want to be with something that they feel was like the rock is a broader and and we have a we have a discipline we have a real disposition toward that group
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