GETTING RICH

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when i was 11 i picked stocks i had the

whole wrong idea i was interested in

watching stocks and i thought stocks

were things that went up and down and i

charted them i read books on technical

analysis i read edwards and mickey i

think that was the classic then hundreds

and hundreds of pages and i read that

whole thing over and over again i read

everything and i thought the first eight

years i thought the important thing was

to predict what a stock would do and

predict the stock market and then i read

ben graham you know when i was 19 or 20.

and i realized that i was doing it

exactly the wrong way

but didn't hurt that i had that

background and everything and i

rejiggered my mind and when i read the

book the intelligent investor at from

that point i never bought another stock

i bought businesses that happened to be

publicly traded

but i became an owner of a business

and i did not care whether a stock went

up or down the next day or the next week

or the next month or the next year and i

didn't have any idea what it would do i

didn't know what the stock market would

do but i knew

businesses i'm a bright guy

who's terribly interested in what he

does i've spent a lifetime doing it i've

surrounded myself with people that bring

out the best in me

and you don't need to be a genius in

what i do

that's the good thing about it if i went

into physics on a whole lot of other

subjects i'd be an also ran but i am in

a game that you probably need

120 points of iq yeah but 170 doesn't do

any better than 120 it may do worse

probably do worse but you don't really

need brains

what do you need

you need the right orientation

you know ninety percent of the people

pulling the figure out of the air but

ninety percent of the people that buy

stocks don't think of them the right way

they think about something that they

hope goes up next week

and think about the market as something

they hope goes up and if it's down they

feel worse i feel better and you think

about i think about what the company is

going to be worth 10 or 20 years now and

i hope it goes down when i buy it

because i'll buy more

i try to keep my competitive experience

in a game where i can win i do know this

when i want to do something i always

want to do it big

i put my whole net worth in city service

preferred 114.75

and

i've never

since that day and now march 11

1942

i have never had less than eighty

percent of my money

in american business

you can call them stocks all right

but i see them as american business i've

owned a piece of american business

at least 80

at all times i just i don't want to own

anything else i want to own a home and

you know things my family wants and all

that but owning five homes doesn't mean

anything to me because i'm going to be

happy in one home and there's a certain

amount of things that go wrong with

everything and

if i got two homes i know i've got more

problems and i don't have more happiness

what brings you the happiness what makes

me happiest is what i'm doing what i'm

doing i enjoy two things about it one

i know i'll win over time that's me

don't beat everybody else or anything

like that but i mean the game is very

very very easy if you have the right

lessons in your mind about what you're

buying i'm not buying stocks i'm my

pieces of overwhelmingly american

business and i'm happy when i'm doing it

i'm happier when stocks are going down

because i can buy more of them with the

same amount of money i'd be happy if i

was a farmer i'd want farmland to go

down so i could buy more acreage it just

makes sense i'll tell you the second

thing i really like i like being trusted

by people i would rather do what i do

with partners than do it sitting in a

room myself

even though i might make more money that

way

let's pretend there is no stock market

let's say i had to buy these privately

like you buy a farm privately like you

buy a department house product they're

investments

so you're looking to say what can i do

with money i've saved

to put it away

so i feel good about getting it back

later under any circumstances but not

necessarily on a given moment but if i

have a farm it's going to take me a

while but people would be so much better

if they

if they actually didn't have a stock

market in terms of buying businesses

united states economy

and it's very easy to look at the

statistics on it i mean

more people

a greater percentage of the american

population

is uh wealthy now or having more income

now

than they've ever had and if you look at

whether bank of america would give you

their average deposit i mean you just

look at the wealth

that doesn't mean everybody's wealthy

but it does mean relative to any other

period of time i mean people have more

money now they get mortgages at lower

rates than they've ever gotten so if

they want to buy a house or something

right today you live in an environment

where

the bottom two percent in terms of

income in the united states the bottom

high percent and for sure the top one

percent

all live better than john d rockefeller

was living when i was six years old john

dre rockefeller was the richest man in

the world

and today

you can get better medicine

better education better entertainment

better transportation you can do

everything better than he could it's

astounding that's in my lifetime

if he wanted to watch

a football game he still had to go there

and i can sit there with this big screen

and they keep showing me the replay i

saw that explaining to me what happened

and every and

maybe everybody doesn't have a screen as

big as mine but damn near everybody has

a screen or an iphone or a computer or

access to one

and they have access

when i was born

the dentist didn't use novocaine

so there has been progress obviously

and nowhere more than in the united

states there's no country that's done

what our country's done if you go back

three of my lifetimes you're looking at

less than one percent

of the world's population closer to half

of one percent are sitting in this land

they don't work harder than people in

all the rest of the world i mean in

terms of hours of unpleasant labor

everybody's got hours of dozen labor in

those days practically

they don't come laden with gold and you

know they are half of one percent and

they work the same hours they got the

same iqs they may be a little

self-selected in terms of enterprise in

terms of going across oceans and things

and fast forward a couple of lifetimes

and they've got

20

plus of all the bounty in the world

i mean that is something that has worked

like nothing just imagine that if you've

gone to anybody

constitutional congress you know 1789 if

you go to any one of the representatives

there

and you said

i want to tell you what this place is

going to look like you know in three

more of your lifetimes your

great-great-grandchildren are going to

be

flying in the skies they're going to be

watching sports all over the world

they're going to be entertaining their

medicine they'd hold you off to a

lunatic society of what he's doing he's

getting 50 cars and he's getting a whole

bunch of little claim checks just think

of it everything when thomas edison did

all the things he did he made some money

but we're using it it belongs to us if

you take what an hour of labor delivered

to you 100 years ago and what an hour of

labor delivers to you now for you and

your family

it's unbelievable capitalism say get rid

of a referee and a government we've got

a government that can tell capitalism

what to do

they do and that's what they should do

and they do in different ways at

different times and all kinds of things

but it's claimed checks on future output

then within and the climbing tax

belonged to me so if i want to buy 50

super yachts i can do it but what does

it mean to me they can buy more things

for other people that are useful to them

it's not evil the federal government is

the boss in the end and they shouldn't

screw up capitalism and capitalism screw

up the federal government it's very

simple

it's evolving always we started in 1789

we had business and it's gotten far far

far unbelievably more productive for

people and the only thing you can do

with what it produces is give it to

other people it isn't like the 50

richest guys in the country can say i'm

just going to eat everything

they're turning out products iphone that

i have which i'm probably the least

capable guy in the world of working with

it but it makes life better

but that comes with government so far

we've got the best system we've got a

better system than we used to have and

we'll have a better system 50 years from

now

why are you so sure well i've seen 91

years of it

i've never seen a period where i didn't

believe that

not every aspect we'd go backwards to

some and now it's not

but it's unbelievable what has happened

we just think of it you know we've had a

civil war we've got a great depression

we've had all these things

pandemics yeah i'll guarantee you well i

thought you get them next year and the

year after the year after but in a

herky jerky but dramatic matter

business moves forward government moves

forward

more important people move forward

i mean i am happy to tell people that uh

the same thing i've told them before but

they'll never get the message most of

them but if you do

that's the most you know best thing to

do if you want to invest for the long

term is index and it's the s p 500 index

right and what's happened of course is

that organizations like to grow

so they set up indexes on different

industries different countries and as

soon as you do that you're violating

basically what jack bobel said he says

you don't know

enough to pick the right businesses

which means you don't know enough to

pick the right countries you're right

you know enough