Not recognize me if my tie was fixed. Lets leave it this way. David i do not consider myself a journalist, nobody else would consider myself a journalist. I began to take on a life of being an interviewer even though i have the day job of running a private equity firm. How do you define leadership . What is it that makes somebody tick . I appreciate it. All right. We are at your favorite restaurant in omaha, why do you like it so much . Is it the food, the price, the combination of both . Mr. Buffett it is the food, the price, the heritage. Four generations of family involved, i have known him since grammar school. I have known the people over the years. The steaks are great. The prices are right. I had lunch year today, it was very good, it was not that expensive, and i enjoyed it. A lot cheaper than new york and washington. Mr. Buffett a lot. I buy people lunch here. David you grew up in omaha and then moved to washington when your father became a congressman. How did you start your Business Career in washington with various pinball machines and gulf businesses . Mr. Buffett i had a couple of those businesses going in, the pinball was the best. The wilson coinoperated machine company. It was named after the high school my partner and i went to. We had our machines and barbershops and the barbers wanted the machines with flippers, but those cost 350. Whereas an obsolete machine only cost 25. We always said we would take it up with mr. Wilson. He was one tough guy. David when you graduated from high school you are not interested in academics . Mr. Buffett i was not interested. David your High School Yearbook said you are likely to be a stockbroker even the you were not good at math. Mr. Buffett i did not want to go to college, although my dad wanted me to go to college. We did not have sats then. In the truth, i always wanted to please my dad, he was my hero. He still is. He kept on jogging me along and said, lets fill out an application for the hell of it. He suggested wharton, and i got in. After the first year i wanted to quit and going to business and my dad said, give it one more year. So i went the second year and i said, i still want to quit. And he said, you have almost enough credits. If you go to nebraska, which i was quite willing to do, for one year, you can get out in three years. So that is what i did. David has wharton ever said you are a half graduate, you should give us some money . Or do they not bother you. Mr. Buffett no, but they may after they watch this. David after that you wanted to go to Business School . Mr. Buffett i won a minor scholarship in nebraska. I applied to harvard. I applied. David you did not get in . Mr. Buffett i did not get in. I spent 10 hours going to chicago to see him, and he looked at me and said, forget it. David did you ever run into that guy again . Heard from him since . Mr. Buffett no. He needs protection now. David harvard does not come after you because you turn them down. Why did you go to columbia . Mr. Buffett i was at the university of Omaha Library in august, leafing through catalogs, and happen to see the teachers. I had read their book but had no idea they were teaching. I said, i thought you guys were dead. Now that i know you are alive, i would really love to come to columbia if you can get me in. David you went to columbia Business School . Mr. Buffett i did ok there. It was terrific in the sense that i was working for my hero. Then he was going to retire for a couple years so i was only there for a year and a half. But every day out was excited about being able to work for him. David what you are good at was picking stocks, according to his formula, looking for companies undervalued, we call it value investing. Did he realize that he had some principles that were fairly unique and that is what you followed his guidance . Mr. Buffett i kind of went to i could have recited his books, i read the multiple times. It was more a question of being inspired by him than learning something from him. David why did you come back to omaha . Mr. Buffett i wanted to go to omaha. I had many friends in new york, but we had two kids by that time and i lived in white plains, i take the train. And i take it back. It did not strike me as much of a life compared to being here in omaha. Both sets of grandparents were alive at that time. It just, uncles and aunts omaha was a more Pleasant Place to live. David you buy a house here mr. Buffett i rented a house. I rented a house for 175. David and when did you buy the house you are in . Mr. Buffett 1958. When my third child was on the way. David how did you raise money . Mr. Buffett when i came back i had about 175,000. I thought that was everything i needed. I planned on going to school, thought about law school. David think about how successful you could have been as a lawyer. Mr. Buffett that is true. I know, i have regretted it ever since. David how much money did you cobble together . Mr. Buffett we met one night early in may of 1956 and there were seven people there, aside from myself. And they put in 105,000 and i put in 100 and i gave them a little piece of paper called the ground rules. David but you ended up the partnership . Mr. Buffett between may of 1956 and january 1, 1962 i started 10 more partnerships. I made a mistake, i had no more no secretary or accounting. I kept 11 checks of books, filed 11 tax returns. I did it all myself. I was worried, it was other peoples money. So i would go down to the bank. Finally, i got wise and on january 1, 1962 i put all 11 of the previous partnerships together and ran that until the end of 1969, at which time i dissolved it. David you dissolved that one. But then you started a new partnership . Mr. Buffett no, by that time we had 105 million in the partnership, and about 70 million was in cash to be distributed and the cash was in three stocks. Mostly Berkshire Hathaway area i distributed it pro rata to everybody. David and you purchase stocks through Berkshire Hathaway . Mr. Buffett yes. Stocks and businesses. David what would you say was your reason to do this . Did you study the companies more than anybody else, are you smarter, you didnt get caught up in fads, what is your reason for success . Mr. Buffett we bought businesses that were decent at sensible prices and we had good people to run them but we also bought marketable securities. Over time, the emphasis shifted from marketable securities to buying businesses. David what was the theory behind buying a railroad, people thought they were fossils . Mr. Buffett they had a bad century, like the chicago cubs. Everybody has a bad century now and then. Announcer the David Rubenstein david over the years, you bought many companies, like the Washington Post. How did that come about . Mr. Buffett in 1973, the Washington Post company had gone public in 1971, about the time of the pentagon papers. But in 1973 the nixon administration, through a pal of nixons, they were challenging the licenses of two of the four television stations. So the stock went from 37 down to 16. At 16, there were about 5 million shares. That was for 80 million. No debt to speak of. So the Washington Post company, intrinsically worth 400 million or 500 million was selling for 80 million. It was ridiculous. You have a business unquestionably worth five times what it was selling for, and mr. Nixon was not going to put them out of business. David when you are doing these analyses, then and now, do you have computers that help you . In those days, how did you read about the Washington Post, and how do you do it today . Mr. Buffett same way, but fewer opportunities now. I met bob woodward and he came up with all the president s men. All of a sudden, at 30 years of age he was getting quite wealthy. We had lunch at the Madison Hotel and he said, what do i do with the money . I said, investing is about assigning yourself the right story. I said, imagine if ben bradley said to you, what is the Washington PostCompany Worth . What would you do if you have to write a story headline . You would interview tv brokers and assign value to each asset. I said, that is what i do, i assign myself the right story. It is nothing more than that. Now, there are some stories i cannot write. To write a story about something glamorous, nonprofit business, i do not know how to write the story. But if you ask me what Potomac Electric power is worth, i can write the story. That is what i am doing every day. I assign a story. David so you get the annual reports and read them the way some people might read novels, and you do the calculations for how things are worth in your head. Do you use a computer today . Mr. Buffett i use it to play bridge. And i use it to research, a lot. I do not have one in the office, but i do at home. David for a smart phone, can someone get a hold of you on a smart phone or mobile telephone . Mr. Buffett no, a smart phone is too smart for me. David and a computer, you use rarely. Mr. Buffett one of the trick questions bill gates and i say, who was on the computer more, excluding email. And the answer, it is probably me. I spend 12 hours a week playing bridge on it. David anonymous people on bridge . Mr. Buffett i go by the name of tbone. And there is a woman i play with who goes as sirloin. She is a two time world champ and i am eight two time world chump. David are you at a worldclass level after all these years . Mr. Buffett no. You could not have a better teacher than she is, but the student has limitations. David you mentioned bill gates, how did you actually come to know bill gates . Mr. Buffett the editor of the editorial page of the post called me in the late 1980s and she said warren, i have always loved the pacific northwest, but would like to know if i would have enough money to purchase a house, a vacation house near seattle. I said, anyone who asks me if they have enough money, does. So she bought the house and she invited me and others to the house. And she knew the elder gates. She called mary gates. They tried to get bill to come, he did not want to come to meet a stockbroker. But mary was a very firm type. Finally they started negotiating hours and she said for hours, and he said one hour. When we met, we talked for about 11 hours straight. David so that was the beginning of the relationship. Mr. Buffett we hit it off. David but you did not buy any shares . Mr. Buffett i bought 100 shares just to keep track of what this young kid was doing. David and he is now on your board . Mr. Buffett yes. We have a lot of fun talking. David let me ask about the philanthropic things you have done with bill and melinda. How did the idea of giving your money to somebody elses Foundation Come to you . Mr. Buffett i originally planned that my first wife would handle the disposition of, well, everything. We came to that conclusion in our 20s, we started the Buffett Foundation over 50 years ago. But i did not give away a lot of money during those intermediate years because i thought it was compounding at a rate i could give away billions instead of millions if i waited a while. She died in 2004, so that plan disappeared. Then i was faced with the question of, how do i give away this money in a way that goes to the people i want without me doing all the work . So david so you called will or melinda one day, to say i will give you the bulk of my fortune . Mr. Buffett not as elegant as that. It was done over the phone. David you did not ask them to call it the bill and Melinda Gates and warren Buffett Foundation . Mr. Buffett that would not do any good. David you were on the board . Mr. Buffett true, but they run it. [laughter] david what are the highlights of some of the deals you are most proud of . The biggest deal you ever did was 37 billion. Mr. Buffett yes. Between 32 billion and 33 billion of cash, and we assumed 4 billion of debt. David so, you spend 37 billion, did you spend a year studying the company . Mr. Buffett no. David how much time did you spend with the coo . Mr. Buffett i met them july 1 of last year. And he happened to be calling on certain shareholders. And one of the fellows in our office at a position in the stock for some time. It was an accident i met him. If i had been out playing golf it never would have happened. But i like him, i heard him talk for 30 minutes. I sent to the fellow in our office, i will call in tomorrow. If you would like to receive a cash bid from Berkshire Hathaway, we would. And if not, forget we ever called. David do you ever hire Investment Bankers to analyze the company . Mr. Buffett no. Not to analyze the company. Sometimes they are involved in the deal. David one time you told me about a story how an investment banker was hired by somebody you were going to try to buy. Mr. Buffett American Energy hired an investment banker, they spent about a week, they sent a big bill at the end and said you have to increase your price. To make us look good. I said, i am not worried about whether you look good. So they hang around for a week, and called to bleed, cash plead, cant you increase your price somewhat so we can send the bill and get paid appropriately for our nonservices . I said, ok we will pay 35 and five cents. You can set you got the last nickel out of me. David do you ever do unfriendly deals . Mr. Buffett no. Berkshire hathaway was originally an unfriendly deal. Were just not interested. Not that they are necessarily bad. There is management that should be replaced. David people must call you every day and say, i have a deal for you. It is perfect. How often do they pan out . Mr. Buffett they do not call every day. We have made our criteria fairly clear. So there are relatively few who call. When somebody calls, i can usually tell within two or three minutes whether the deal is likely to happen. There is just it either makes it through the filters or it does not. David one time i was told you got a letter from israel, someone asking to look at your company. What are the odds that they would send you the prospect us and you would say you will buy it . You did buy it. Mr. Buffett we bought 80 of it. Four 4 billion. And we later bought the remaining 20 . David before you bought it, did you go to israel to look at the company . Mr. Buffett no, i hope it is there. David and you are happy with what you bought. Mr. Buffett yes. David and you bought a railroad. What was the theory behind that . People think of them as fossils. Mr. Buffett the Railroad Business had a bad century. Everybody has a bad century now and then. But finally, the Railroad Industry got modernized and it is a good business. It is not a great business, but it is a good business. In the fall of 2009, we already owned a fair amount in northern santa fe. And the price looked like we could do it at a sensible price. So that was a thursday. And on friday i said we would pay 100 per share of the directors were interested. He checked over the weekend and the following sunday we had a contract signed. David somebody from the white mr. Buffett somebody from the white house calls and says, would you mind having a tax named after you . Of all the diseases, i will take a tax. David in your view the best place to invest is still the United States . Mr. Buffett it is the best i know of, and it has been wonderful. Nobody has sold america short since 1776. And a joy what happened subsequently. David but we were having roughly 2 or slower growth. Is it possible to ever grow 5 in this economy . Mr. Buffett there will be some years. But 2 growth, if you have less than 1 population growth, means in one generation, 25 years, we will add maybe 18,000 gdp per capita, so we are just beginning. 1 , my life has had a lot of compound interest. May be better at higher rates, but if you have an already prosperous economy, and we have the most prosperous economy the world has ever seen, and you keep compounding it, over time, people will be living far better 20 years from now than they are now. David your secretary pays a higher tax rate than you do. Mr. Buffett accounting payroll taxes. David you favor changing that . Mr. Buffett some years ago, summary from the white house called to say that they had read my views on taxation, and said, would you mind having a tax named after you . If all the diseases have been taken, i will take a tax. And so they refer to it that way. I really do feel anybody with millions of dollars per year should have a combined payroll and income tax of at least 30 . And in my office, everybody in the office has that but me. David how did you become a democrat . Your father was a big republican and you live in a conservative state. Mr. Buffett civil rights more than anything else. I do not think about it when i was 12 or 14 years old. There was a school for blacks a few hundred yards away, it never dawned on me how different life was. Then i got to see more of the world and i noticed there were a lot of things unfair and democrats seem to be doing a little more about it. David in Berkshire Hathaway today, you have an annual meeting that attracts roughly 40,000 people. Mr. Buffett correct. David when you had your first annual meeting, how many people showed up to that . Mr. Buffett we had 12, but you had to count my aunt and uncle, family and managers. David did you ever think you could build a company that would become one of the biggest in the world . With ever in your plans . Mr. Buffett no. I have always just put one foot in front of the other. David what would you like to have as your legacy . Mr. Buffett i would like to be the oldest man that ever lived. I like teaching. I have been a decent teacher, and i have a lot of University Students come out every year. David and today is there anything on your bucket list you would like to do that you have not done . Mr. Buffett if there is anything i want to do, i do it. Money has no utility, time has utility. But money in terms of more trips or houses or having a boat or whatever has no utility to me whatsoever. David what motivates you to run a company when most people your age are playing shuffleboard or relaxing or doing something . Mr. Buffett they spend all week planning their haircut. I get to do every day doing what i love with people i love, that is the best. David so the greatest pleasure in your life is looking at new companies, giving away money, what gives you the most pleasure . Your grandchildren . Mr. Buffett all of the above. The truth is i regard Berkshire Hathaway the way a painter regards to painting. That canvas is unlimited. But there is no finish line. It is a game you can continue to play. David any words of advice to a Young Investor that would like to emulate you . Something close to what you have done . Mr. Buffett look for the job you would want to hold if you did not need a job. Youre probably only going to live once. Shirley maclaine may differ with that. And you do not want to go sleepwalking through life. Whether you make x or 120 of x, it is not remotely important, as marrying the right person, or finding something you would do if you did not need the money. I have had that job for 50 or more years. I was lucky in that i found early on. Do not settle for something, do not worry about making the most money this week or next month. When i was offering to work for ben graham, i said i would work for nothing. I meant it. Just the idea. Look for the job that turns you on, find a passion. Caroline i am caroline hyde. This is the best of bloomberg technology, where we bring you all our top interviews this week from tech. Coming up, the tech earnings season heats up, alphabet, microsoft and intel reporting this week. The dow hit above 20,000. Verizon targets charter communications, but will it help verizon keep pace with at t . And cisco swoops in. The ceo told us a 3. 7 billion