Ravi, thanks for your comments! Here are several of mine:
I thought that the tenor of the conversation of the three on stage was one of grace and shared respect. Warren knows how to work with people and inspire them. He is, at root, a portfolio manager who is not a backseat driver; he is not a hands-on manager. He is delighted to have found both Ajit and Greg, who are more hands on. In my mind Warren is the Tom Sawyer of business: he knows how to get others to want to help him paint his aunt’s white picket fence. That is a rare skill!
In the early ‘80s I was walking to a dinner in Washington with Warren. I asked him about GEICO. This was when Berkshire still owned 50%. He said, its problem was growth. GEICO has a tremendous expense advantage. I suspect that Progressive has found ways to nip into this advantage that the Gecko can’t easily overcome the nipping by himself. (I find Progressive’s ads totally unpersuasive.) Reducing marketing expense was a logical response.
Regarding AI, I recently read Uncertain—The Wisdom and Wonder of being Unsure, by Maggie Jackson. It is a lengthy—200 page—review of the scientific progress of psychological research. The early chapters might get a little too much into the academic weeds for many readers. The thrust throughout the book is how being unsure nudges us to solve problems: if we are convinced of a solution, we, like a robot, will stop. We learn early that 2+2=4, but the real challenge is putting two and two together in real world. (And, when I made this comment to Warren long ago, he noted that we only need a few fours to be successful.) The best chapter, and perhaps the first to read, is the last on AI. Current AI is designed to seek certainty: it does not understand how to follow Richard Feynman’s famous admonition: Don’t fool yourself; and remember, you are the easiest one to fool. A good scientist, investor, will qualify a statement by a degree of certainty. We have tricks, heuristics to test our certainty: As Warren once said, when he is considering making a large purchase, he asks himself, would I be willing to put a major portion of my net worth into it. That’s what we call a gut feeling. Imagine AI reading a mammograph. It will reply with certainty and likely be wrong. (A radiologist once encouraged medical students to study radiology, but skip mammography. Asked why, he replied: reading a mammograph is like trying to catch a snowball in a blizzard.) AI could produce many false diagnoses and, in life, fraud of the kind Warren mentioned. I’m sure he was bemused, and few of us would be suckers, but fraud often thrives on the few who are. I suspect AI might well evolve and advance to be useful; in the meantime, we should be motivated to be unsure of ourselves. As Maggie makes clear, being unsure is the force behind progress. I think Warren and Charlie are/were well motivated by being unsure of themselves—combined with curiosity.
Thanks so much for sharing your conversations with Warren from decades ago! This provides rare insight that few others have access to. It is incredible how he answers questions for five hours year after year. Looking forward to his 60th anniversary of taking control of BRK next year! Thanks for the book recommendation, I will look it up on Amazon.
Ravi, thanks for your comments! Here are several of mine:
I thought that the tenor of the conversation of the three on stage was one of grace and shared respect. Warren knows how to work with people and inspire them. He is, at root, a portfolio manager who is not a backseat driver; he is not a hands-on manager. He is delighted to have found both Ajit and Greg, who are more hands on. In my mind Warren is the Tom Sawyer of business: he knows how to get others to want to help him paint his aunt’s white picket fence. That is a rare skill!
In the early ‘80s I was walking to a dinner in Washington with Warren. I asked him about GEICO. This was when Berkshire still owned 50%. He said, its problem was growth. GEICO has a tremendous expense advantage. I suspect that Progressive has found ways to nip into this advantage that the Gecko can’t easily overcome the nipping by himself. (I find Progressive’s ads totally unpersuasive.) Reducing marketing expense was a logical response.
Regarding AI, I recently read Uncertain—The Wisdom and Wonder of being Unsure, by Maggie Jackson. It is a lengthy—200 page—review of the scientific progress of psychological research. The early chapters might get a little too much into the academic weeds for many readers. The thrust throughout the book is how being unsure nudges us to solve problems: if we are convinced of a solution, we, like a robot, will stop. We learn early that 2+2=4, but the real challenge is putting two and two together in real world. (And, when I made this comment to Warren long ago, he noted that we only need a few fours to be successful.) The best chapter, and perhaps the first to read, is the last on AI. Current AI is designed to seek certainty: it does not understand how to follow Richard Feynman’s famous admonition: Don’t fool yourself; and remember, you are the easiest one to fool. A good scientist, investor, will qualify a statement by a degree of certainty. We have tricks, heuristics to test our certainty: As Warren once said, when he is considering making a large purchase, he asks himself, would I be willing to put a major portion of my net worth into it. That’s what we call a gut feeling. Imagine AI reading a mammograph. It will reply with certainty and likely be wrong. (A radiologist once encouraged medical students to study radiology, but skip mammography. Asked why, he replied: reading a mammograph is like trying to catch a snowball in a blizzard.) AI could produce many false diagnoses and, in life, fraud of the kind Warren mentioned. I’m sure he was bemused, and few of us would be suckers, but fraud often thrives on the few who are. I suspect AI might well evolve and advance to be useful; in the meantime, we should be motivated to be unsure of ourselves. As Maggie makes clear, being unsure is the force behind progress. I think Warren and Charlie are/were well motivated by being unsure of themselves—combined with curiosity.
Thanks, always, for your writings!
Thanks so much for sharing your conversations with Warren from decades ago! This provides rare insight that few others have access to. It is incredible how he answers questions for five hours year after year. Looking forward to his 60th anniversary of taking control of BRK next year! Thanks for the book recommendation, I will look it up on Amazon.
Appreciate this, thank you.