Becoming Warren Buffett Page #2

and I made a penny a paper,

but in terms of compounding,

that penny's turned

into something else.

Einstein is reputed to have said

that "Compound interest

is the eighth wonder of the world"

or something like that,

and it goes back to that story you probably

learned when you were in grade school

where somebody did

something for the king,

and the king said,

"What can I do for you?"

And he said,

"Well, lets take a chessboard

"and put one kernel of wheat

on the first square

"and then double it

on the second

and double it on the third."

And the king readily agreed to it,

and by the time he figured out

what two to the 64th

amounted to,

he was giving away

the entire kingdom.

So it's a pretty simple concept,

but over time,

it accomplishes

extraordinary things.

Berkshire is an amazing company.

Fourth largest company

in the "Fortune" 500.

He is the only person

who has ever, from scratch,

built a company that is in the

top 10 of the Fortune 500.

Woman:
Berkshire Hathaway.

Fine, thank you.

Warren:
Well,

Berkshire is a holding company of sorts.

It owns a large number

of separate businesses

that operate

independently of each other

and, to a great extent,

from the parent company, Berkshire Hathaway.

All right, well,

we're going to get more from you in a second.

Warren:
So we have maybe 70,

maybe 80 businesses,

and we ask them

to behave in a way

that doesn't hurt

our reputation

at Berkshire Hathaway,

but they run their own lives.

Other people do most of the decorating in

the office, so various things come in.

Originally,

when I moved in in 1962...

you can see this...

I went down

to the South Omaha Library,

and I think for a dollar,

I got seven copies

of old "New York Times"

from big times like

the Panic of 1907.

This is one...

1929 obviously.

But I wanted

to put on the walls

days of extreme panic

in Wall Street,

just as a reminder that anything

can happen in this world.

I mean it...

it's instructive art

you can call it.

I was born in 1930

here in Omaha, Nebraska,

during the stock market crash.

My dad lost his job in 1931,

a year after I was born.

He was a stock salesman,

and he had what little savings

he had in the bank,

and so he started

his own company.

He worked right through

the depression.

Bertie Buffett:

He had an investment company,

and as an adult

when I looked back,

I thought, "Wow, did that ever

take a lot of nerve."

Sometimes we'd

go down there on Sunday,

and we could play

with the adding machine.

My brother and I tended

to play the games together.

And I remember

at one point he said to me,

"I'm going to be a millionaire by the

time I'm... 30," or something like that.

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