Grubstakers - Episode 08: Warren Buffett

Episode Date: March 26, 2018

On this episode we discuss Warren Buffet, the friendly grandpa billionaire who just wants to pay more taxes than his secretary and control every single airline. Yes, strangely enough the 3rd richest man on Earth actually owns a lot of things. You're putting money in his pocket every time you have a Dairy Queen malt or buy a Duracell battery. Most disturbingly he controls almost half the mobile home market and his companies foreclose on extremely poor people at 3 times the average national rate. Listen to hear all the things you'll never read in the sycophantic business press profiles of the Oracle of Omaha!

This week on Grubstakers, we're talking about the WB himself, Warren Buffett. We look into his many scandals, his family history, and everything about him that's pretty cool and badass. Check out his McDonald's habits and everything more, this week on Grubstakers. Because of my success in the private sector, I had the chance to run America's largest city for 12 years. I taught those kids lessons on product development and marketing. They taught me what it was like growing up feeling targeted for your race. And that's just not true. You know, I love having the support of real billionaires.

Hey, hey, hey, welcome to Grub Stiggers. My name is Yogi Pollywall. We've got my esteemed gentlemen friends. Steve Jeffries. Andy Palmer. Sean McCarthy. And today we're going to be talking about the man, the boy, the Bernie Sanders of billionaires, Warren Buffett, ladies and gentlemen. The friendly billionaire grandpa.

Oh, you know it. Like the nice man who owns the entire economy. The guy, the third richest man in the world as of March 2018. Both Forbes and Bloomberg have him at $88.8 billion net worth. If Futurama had a dad corporation, it would be Warren Buffett. That's really who this man is. It was interesting because we did the Oprah episode, and Oprah's not a terrible person for a billionaire. I mean, Andy doesn't like her because she's black.

And a woman. Andy never mind um all right well but so anyways we did the oprah episode and it's like she's not a terrible person so it's like hard because the podcast only really works when we're talking about shitty people and making fun of how bad they are and so you get this impression from warren buffett's public persona that he's like this friendly grandpa who like only collects a hundred thousand dollar salary and still lives in the same house and you know he says it's unfair that his secretary pays more in taxes than he does so that means we decided to do another dud episode yeah that means he must be a nice billionaire you know but then like you actually start researching and it's like oh yeah no he owns the uh mobile home foreclosure unit and he owns you know the uh coca-cola company that's like murdering union workers in columbia he owns 10 of it you know and so it's like you just start like looking at these things oh he owns like general reinsurance which is like a fraud

mill and uh also if he has 88 billion dollars why doesn't he give his secretary some stock options yeah at least the buffett rule um rule number one never lose money rule number two never forget rule number one but it's just weird like just that the guy who's the third richest man in the world and then you start doing research're, like, shocked at all the shit he owns. Yeah, it's crazy. And then in your head, you're like, I'm not sure why I thought you could be the third richest person in the world without owning a bunch of stuff. But, you know, it turns out, like, a lot of things in the American economy that are not particularly fair are owned by Mr. Buffett, the friendly grandpa billionaire. The Oracle of Omaha,

as it were. But I guess we'll just start with some brief biography and then we can talk a bit more about his companies. Yeah. He was born in Omaha, Nebraska. In 1930. A nice young boy. He's 87 years old today, as of March 2018. His dad, Howard Buffett, was a congressman. Four-term congressman.

Four-term congressman. And also... He's a self-made billionaire. That's right, yes. And his mom was a part of the Estonian Stahl family. I don't know what that means, but it kept coming up. So, if our listeners know, find out. And Buffett has two sisters and kind of have like a decent childhood. I mean, nothing too crazy.

No murders, no rape or nothing. He bought his first stock when he was 11 years old. That's right. His mom would have headaches and would get really shitty, and so Buffett basically liked numbers. He liked numbers, and he liked figuring out what it means to profit. He liked numbers because they wouldn't hit him with a broom. His first math problem was 20 union leaders minus 10 equals zero problems. He was like a class prankster at a certain point as everyone stopped

giving a shit about uh grades because he was just kind of done with what school meant but he got through it because his dad was like go to college and figure this shit out he applied for harvard and they rejected him and a few of the professors that worked at columbia he was reading their uh like books about finance. And so he wrote them a letter being like, hey, I thought you guys were dead, but it turns out you're not and you're teaching at Columbia. I would love to learn from you. And they're like, all right. And so they admitted him, which goes to show you if you write a nice letter, people will let you do stuff you probably shouldn't need to do.

And you got to butter them up. Do a little stroking. Yeah. A little stroking. A little poking. A little poking a little tongue work oh tongue work andy disgusting um and so he goes to columbia and he takes the dale carnegie classes and gets better at public speaking and stuff and then to win friends and influence people. That's right. It's good at eye contact, repeating someone's name so as to

endure yourself to them. Yes, Andy. Thank you, Yogi. Stephen, do you have any thoughts? Speaking clearly on the eviction letter you post on their mobile phone. So basically, he's got a decent childhood and then he starts getting into investing with his excuse me, Stephen, I can't believe decent childhood, and then he starts getting into investing with his...

Excuse me. Steven, I can't believe you burped just then. He starts getting into investing, and he's very good. Him and his partner, Munning, I believe is his name. I can't remember right now. Charlie Munger is the vice president of Berkshire Hathaway. We'll do another episode on Munger, but Buffett's called Munger. His partner, Munger, is now 94, and he's worth only $1.8 billion, as opposed to Buffett's $88.8.

But interestingly, and we'll get into this a little bit later, Munger is one of the co-founders of the law firm Munger, Tolles & Olson. He founded that law firm in 1962. Munger has since left the law firm but the law firm still defends Berkshire Hathaway among others including general reinsurance which might have done some fraudulent things so during this Buffett is kind of a weirdo he likes being a loner he loves numbers and he marries uh Susan Buffett and they have three children Sus Susie, Howard, and Peter. And Susan is kind of like a whippersnapper. She's two years younger than Warren, and she kind of levels him out.

She's really into the civil rights movement and kind of changes Warren's Republican upbringing and makes him more of a liberal than he would have ever been. So in theory, if Susan wasn't a decent human being... Warren would be even worse. Yes, precisely. She decreased by 50% the number of trailer park evictions. So Susan, at one point, realized that Warren's a weirdo

and then just kind of moved to San Francisco, got a divorce from Warren, but also unofficially. One of those like i'm not with you i'm not with you anymore but we don't need people to talk about it and so she she like knew warren couldn't handle being alone so she allowed like a few of her friends to like you know pop in and just check in on her and one of them was astrid manx who later on would marry warren buffett after susan would die due to a cancer. Yeah, right.

So that's like the first rule of keeping a billionaire locked down is you don't let your hot friends visit him. It's weird because basically... She should have nagged Buffett harder. At one point, they were sending Christmas cards out, and it was Susan, Warren, and Astrid. So it was like everybody knew what was going on, not just the trio, but people outside of it as well.

It sounds like you're polyshaming. Buffett probably had the most vanilla threesome with the three of them. I think he was just cucking his original life. Three-way missionary in the house he bought in 1956, and then they ate McDonald's and drank Coke after. See, Warren Buffett's a humble billionaire.

He doesn't have threesomes. He just watches. That's right. That's right. Why would he need to have it? He just watches. He does the annual letters to Penthouse. He's famous for his annual letters

to the Penthouse shareholders. So they got three kids, Sus howard and peter and suzy there's not much about howard is clearly the like successor to warren he uh you think they called astrid mother yeah i think so i think they're sending christmas cards out with ast if they're sending Christmas cards out with Astrid, they're calling her mother, indeed. Howard did. Peter, incidentally, though, is a musician and has a lot of albums that kind of all suck. He also did the score. You mean the children of billionaires are not good musicians? No, they're not. Peter also did the fire dance scene of Dances with Wolves.

What? If you, yes, if you, Andy, look that up. Fire dance, what was it, Dances with Wolves. What? If you, yes, if you, Andy, look that up. Fire dance, what was in Dances with Wolves? It's like, it's, the thing about Peter Buffett is he's made music that nobody would want to listen to, but technically works as like a music score for a movie about dancing with wolves. And the sad reality is it's like,

Peter Buffett has put out an album every year since like 19 i think 82 he's like the woody allen of terrible music it's all tones it's all just fucking like like it's music that says my dad doesn't love me as much as i'd like him to and the visuals here this is really authentic like I really know what it was like to be dancing with wolves I just picture him calling

some customer service hotline and they're like we'll be with you shortly and then the music comes up and he's like oh my god laughing laughing I've found my voice And then the music comes up and he's like, oh my God. I've found my voice.

I thought you were going to say he heard his own music. He heard, yeah, this would be good customer service music. Oh, man. I just like the idea of some film company who needs Warren Buffett to invest in them, being like, well, we could get his dumb kid to score our next project. Right, right. So Peter Buffett, that guy, was married to, incidentally, all of the kids and Warren have all been divorced at one point or another.

So Peter's first wife, Mary Buffett, was married to Peter between 1981 and 1993. And she was in a movie called Tucker, The Man and His Dream. She was an actress. It's about Tucker Carlson. The man and his dream to build a wall on the Mexican border. The movie is about a small-time car manufacturer. It doesn't matter. The point is, her role in that movie is singing girl number two. She's not even

the number one singing girl. The thing is that Mary Buffett has put out like 12 books with this guy David... I don't know what the fuck's his name. Schwimmer. Yes. David Clark. And all of the books... Sheriff David Clark?

Are Warren Buffett and the Interpretation of Financial Statements. The New Buffettology. That's that good stuff. The Tao of Warren Buffett. Oh, my God. The Buffettology Workbook. The Warren Buffett Stock Portfolio.

The Ex-Daughter-in-Law. This is what I fucking hate, too. Because, like, you see this shit all over, like, Bloomberg and Business Insider. And, of course, you know, they have these success books success books like how to be like Warren Buffett or some shit it's like oh yeah well you're kind of missing the starting with a four term congressman father who like works at a brokerage and gets you into fucking

Columbia she she's not a financial degree person she's not she's just using the fact that her last name is Buffett and like the thing that's so fucked up about it is that this person has a career and a net worth allegedly of 1.1 million dollars

because her last name's Buffett and she makes people think that she knows what she's talking about. It's fucking dumb. I'm so mad about it. Yeah, it's unfair how her father has a career for the same reason

but much more money. So, the Buffett kids are are all kind of lean they're all they're all philanthropists none of them really do all that much howard runs howard is going to be the successor of um what's the company guys berkshire hathaway yeah yogogi did both the most and the least research for this episode. That's right, I did. So, one of the granddaughters of Buffett, I believe it's Peter. The granddaughter? One of Warren's granddaughters, I believe it's Peter's daughter. Right.

It was disowned by Warren Buffett. And she lives in California and has dreads. And in a local news interview, she was interviewed. And she's like, yeah, I'm a housekeeper for this rich family. And we joke about how I'm the granddaughter of Warren Buffett. And I'm taking care of a rich family. And it's like, oh, go fuck yourself forever. You're a piece of shit.

Andy, do we have that clip? What was the clip again? Sorry, I found that Berkshire Hathaway owned flight training programs, and I was trying to see if I could link them to 9-11. Andy doing the important investigative research over here. Anyway, I'll put it in post right now. I work for a family here in San Francisco, the Tannenbaums, and they're an amazingly wonderful family.

I do a lot of organizing of just things in their home, organizing of toys. I think it's a very weird thing to be working for a very wealthy family considering I do come from one of the wealthiest families in America. And I feel that the family I work for feels a bit of humor around the fact that I am from one of the wealthiest families, a wealthier family than I believe they are. Well, yeah, her name's Nicole, and she was disowned by Warren Buffett, I guess, for cooperating with a documentary called The 1% in 2006.

She was interviewed in this documentary about The 1%, which was, I guess, about rich people and their lives and the children of rich people. The friendly grandfather, of course, threw her out of the family over this. The friendly grandfather who wants what's best for everyone and wants a more fair society. Fucking liberal jerk-off.

So Warren Buffettett his entire ideology is ideology is basically i buy shit that i think works and i ignore everything else right and it kind of makes sense because he's not necessarily like a intellectually trained person he is very you know middle of the the spectrum when it comes to being an intelligent human being, especially in investments. Well, he practices what he calls value investing, which is huge now. Or he analyzes the fundamental, like the business case of a company and project into the future how you think they're going to do. And he has like, I mean, he has like a quantitative analysis of his own. But he also just like has an idea of like future conditions that the company is going to face.

It's called like the Moody's like stock portfolio. It's like, you know, basically a book a uh like 50s or 60s about like what companies exist and how much money they're making quarterly right and he bought one off ebay in this dog i'm watching and the person behind the camera is like oh is it like looking like at an old family like uh uh picture book and he goes it's better and like that is the level of obsession warren buffett has this book that he used to invest in companies when he was starting out is better to look at than family pictures well i was going to say the um opposite of value investing is called nagging investing and that's where you tell a stock that it's overvalued to try and convince it to let it

buy you as to let you buy it out of low self-esteem um but But just like to kind of talk a little bit about what Berkshire Hathaway actually owns. Warren Buffett, as of I think 2015, yeah, he owns almost 38% of Berkshire Hathaway's A shares. And those A shares are worth about $200,000 each. That's again, as of 2015, I'm sure it's gone up. Berkshire Hathaway is the 100% owner of Sears Candies, the 99% owner of Dairy Queen, the 100% owner of Benbridge Jewelers,

the 100% owner of Duracell, the 99% owner of Fruit of the Loom. It owns 16% of American Express, 26% of Kraft Heinz, and is the 9.65% owner of Wells Fargo as of December 2015. Wells Fargo, of course, did not have any fraudulent activities in that period. Not that we can really pin those on Buffett, but wow, what a terrible company Wells Fargo is.

And I mean, like all of these companies follow, you know, Buffett's rules for being a company once they get acquired by them. But it's really like a wealth country club. They provide like free McDonald's for the employees. for being a company once they get acquired by them. But it's really like a wealth country club. It's like... They provide free McDonald's for the employees. I mean, basically, like, hey, if you join us, we'll give you McDonald's, we'll give you Coca-Cola, as much Coke as you can drink. And I mean, that's the thing about Buffett that's kind of crazy.

He's figured out how to have more fingers in so many pots that you don't really know how deep he is into everything until you start looking at him and um just to kind of go back to his biography we mentioned he went to columbia he got a master's degree in economics from columbia in 1951 but interestingly one of his professors which yogi did touch on the name is benjamin graham was his teacher at columbia who later went on to open an investing partnership. And Buffett went to work for his teacher at Columbia in this investing partnership. Benjamin Graham closed that investing partnership that Buffett worked for in 1956. He closed it.

Closed it. And at this time, and then I got this from Wikipedia, Buffett's personal savings for working at this investing firm that he only got the job because of his teacher at Columbia, his personal savings in 1956 were $174,000, which is adjusted for inflation $1.57 million today. And he used that money to start Buffett Partnerships. So he was already an adjusted for inflation millionaire in 1956. And again, because, you know, maybe his congressman father may have helped him get into

Columbia where he met his professor and then his professor took him to work for his investing partnership. You know, these kinds of connections that if you have an elite upbringing, you're going to get might have facilitated his rise to a billion dollars. And not saying he's not a smart investor. Before he owned Berkshire Hathaway, he bought a handful of stocks from him and the tender offer they just asked like hey how much would it be and he said 1350 and then when he got back their tender it was 13 and three eighths and he just got mad so he just kept buying more berkshire hathaway stocks until he owned a majority share and then replaced the management and in the documentary that's on hbo him and munger talk about like yeah when we look back on that that probably wasn't the best decision for us and then buffett

goes i mean i don't know if this affected my decision but five days before that my dad did die and so uh basically don't piss buffett off he will buy whatever you're a part of and then replace it with his own drones i will say it would be kind of cool if you were just on hold with a company for too long to just buy it and fire everybody. So I respect that part of Buffett's life. Just being minorly inconvenienced by a business and being like, I'm throwing all of you out on the street. On the one hand, it's value investing.

On the other hand, it's pretty standard corporate rating. You just get a majority stake and get on the board and fire people. Or intimidate union leaders. So was there anything else to particularly cover from his bio? I guess so. We mentioned in 56, after he left this partnership, he starts Buffett Partnerships. And then I believe it's in the 60s he buys Berkshire Hathaway, which was at the time a textile manufacturer,

which he converts to a holding company, which, you know, just buys other corporations and then holds the position. And in 1979, Berkshire Hathaway went public and at this point again Wikipedia source here Buffett's net worth in 1979 was around 620 million and it's only increased from there yeah most of the money he's made the billions have occurred after he turned 50 so it you know a majority of his wealth was made in the last 30 years. The thing that I found was that basically with Berkshire Hathaway, when they would

hold a few companies, there'd be these float capital and they could use that to like spend it on other companies while in transition of getting more companies. And that was a huge part of how he got his billions. Let's see. Andy, do you have anything to add? It doesn't look like they trained at a Buffett-owned facility. But did you know that some of the 9-11 hijackers

had season tickets to SeaWorld? No, I did not know that. Andy just once again knocking it out of the 9-11 hijackers had season tickets to SeaWorld. No, I did not know that. Handy just once again knocking it out of the park with his contributions. SeaWorld, eh? SeaWorld. They love the orcas and the dolphins. I mean, you know, I'm not shocked terrorists love holding a majestic beast against its will

until its wild nature dies inside. You know, what I just want to say is that Muhammad Otto watching Tilikum do a trick, real meeting of the minds. Leave it in. Yeah. So, we can talk about

some of the not-so savory uh actions of buffett's companies which again through berkshire hathaway there's too many to name but i encourage you all to just look up this list of how much berkshire hathaway owns of the economy because it's just crazy once you look at that list and you're like oh every time i buy you know heinz ketchup or whatever the fuck i'm putting money into warren buffett's pocket every time i fly like any airline i think andy you were saying that i forget all the different airlines he owns a stake in they own uh united airlines delta airlines uh or at least uh large i think the largest stakes in United and Delta as well as Southwest and one other. Let me see.

Basically all the ones that suck. That's what I'm hearing. He wants to. And American. Yeah. Acquire Southwest. He wants to own the, yeah, he wants to completely like buy out Southwest, but he's the largest shareholder in United and Delta and one of the top three in southwest and american well you know it's like jimmy carter told us uh deregulating the airlines

will allow there to be competition and competition makes things better well it's clearly like it's clearly he just has a monopoly like that's his kind of investment strategy now is to just build up a monopoly in different industries of course or as i say when i see him as i say when i see him you must be the monopoly guy but so uh andy found something interesting at one of the annual i think it was 2000 i don't know exactly where one of the annual berkshire Hathaway shareholder meetings, they issued a custom Monopoly game. Yeah, I think it was the 2004 one.

2004. It was this thing when I was looking into, before all the Berkshire Hathaway, they'll have like an investor party, and they'd name it something stupid, like the Woodstock of Investors. Yeah, he called it the Mardi Gras of investing in one of the documentaries. I just like the idea of Warren Buffett with the beads around his now shirtless neck.

They're like, we can have fun like poor people, but we're better than them. So every year they start out with a little comedy skit. That's a movie. Oh, they got jokes. They got jokes. They got. That's actually where trailer park boys came from. In the pilot episode, Warren Buffett evicts them.

We got two shiny shit badges to get rid of and it's going to get messy. And so at these, at these these parties they'll have this movie one of them the first one had arnold schwarzenegger which you realize like if you have as much money as warren buffett like you can just kind of produce a shitty movie that no one sees because you can't find this movie with arnold schwarzenegger in it right right from 2004 i think where arnold schwarzenegger plays the the buffinator or something like that where he's fighting against like conglomerates of other massive corporations and then there's a there's another one where come with me if you want mcdonald's there's another one they made two years later

where Jamie Lee Curtis... Get to the Whopper. Jamie Lee Curtis and Nicolette Sheridan both lusted after Charles Munger. The 94-year-old... I will say a 94-year-old worth $1.8 billion is pretty sexy yeah i think so yeah buffett's quote after the movie and it was you may be puzzled why in the movie charlie always gets the girl i think it's due to the anna nicole smith rule when choosing between two rich guys

pick the older one because you see sex is a a transaction. It is when I do it. So one of the things that we found was they sold a Monopoly, or they raffled off a Monopoly game, just a Berkshire Hathaway Monopoly game. In 2004. In 2004. And you can still buy it, but it's the least. My theory is that they just made this so that when you look up berkshire hathaway monopoly you'll just get this quirky little game that they released at their

thing and not the fact that they're buying industries wholesale um but yeah the berkshire hathaway it has you can look it up we'll probably post the image on the tumblr but it's just kind of cute like i at least respect just the self-awareness of what a fucking monopolist he is because they just put like dairy queen and benbridge jewelers and seize candies are all like the share uh the the tiles so you can just like buy these companies that berkshire hathaway actually owns and profits from you know like a real monopoly. Yeah. One thing I forgot to mention about Howard Buffett.

It's the most realistic version of monopoly. The middle son is, there's some CNBC interview with Warren Buffett, Howard Buffett, and then Howard Buffett's son, who is trying to be in politics. And Warren Buffett's... Is he the musician? No, this is the middle kid who is going to be the successor to Warren at Berkshire.

And Warren Buffett's talking about... I'm glad they're doing it on a meritocratic basis. Warren Buffett's talking about how much he loves Breaking Bad at the time Breaking Bad was out. And he was like, I tried getting Vince to reveal the ending, but he wouldn't tell me about it. And the host was like, oh, who do you think you'd be? And he's like, I bet I'd be Saul Goodman. And Howard goes, yeah, I haven't't seen it i don't watch any tv and you could see warren give him a look like i've really hurt my son he's not even watching breaking bad i i didn't know how much pain i put him through um but yeah so uh i guess uh we could talk a bit about uh some of the

frauds that uh buffett's companies have been involved in. Well, so with the monopoly thing, I tried to find anything where they were involved in any kind of antitrust lawsuit. You know, the government doing its job regulating antitrust law. You mean destroying the free market? And in 2014, Berkshire hathaway didn't report an acquisition of a building uh or a building company's stock and so they let's see they got they had to go to court and they settled with an 8896,000 penalty. Wow. Which represents about a half hour of operating earnings. Justice has been served.

I mean, it is like, it's kind of adorable. Like, I remember I've read a fair bit of libertarian or Austrian economics or whatever. And their entire idea is that monopoly is like self-correct, which is simply ludicrous. But the idea is like, you know, obviously if a monopoly is being inefficient, then someone will out-compete it. But, you know, that totally ignores like startup costs

and all these other things that have to go into... Just like start your own airline, bro. Exactly. It's like, yeah, okay okay so i'll just buy like the carriers yeah just like start your own fucking cable company and dig all that infrastructure a lot of the folklore behind warren buffett's like you know nice grandpa billionaire status is that he lives in a routine that's very uh, whether it's eating way too much fast food or drinking too much soda or just being kind of a goof. The thing is, is that he doesn't have to technically do anything.

So he only does what he wants to. And a good chunk of the reason Bill Gates and him are such good friends is Bill Gates is very like highly micromanaging of time and like trying to figure out the best way to do everything. And Warren's just like, I don't even give a fuck, bro. I'm just hanging out, going to be in a bathtub, going to think a lot. They both have wives who sort of keep him on the even keel. And the thing is, Bill Gates doesn't really have anyone at his level of, when they go to dinner, they don't always look at the other person to get the check. You know what I mean?

Like, Warren Buffett, Bill Gates dinner is like, who cares who pays? And there's a great clip with Bill Gates and Warren Buffett for one of these conventions that he was talking about where they're touring this mattress factory. And at one point, Warren Buffett's just like, you know, I really wanted to be a mattress tester.

I felt like that would be the best job. And Bill Gates is just cheesing with him. It's great. Well, Yogi, you were like, you have to wonder, like, you were a video game tester for a minute. I was, yeah. Is it like just playing video games all day? I mean, technically, it'd be better because you wouldn't be under a contract with Aerotech for Nintendo. And also, like...

I mean, you gotta lay on some shitty-ass mattresses. Buffett, like, test it. Write up a report. Find out how it feels on different parts of your body. You probably gotta lay there for a long time. You're telling me you wouldn't want to do that, Andy? I wouldn't. I think that the glean of it...

You're telling me somebody wants to pay you good dollar To lay on beds every day And you're telling me your answer is no A bad bed will fuck up my back for a week You're crazy Buffett test the God damn it I've been trying to get this joke in like four sentences

Stop interrupting It's already passed Alright Sean Do it now. Buffett tests the mattresses. Shut up. He tests the mattresses by throwing them out on the street to see how it feels when he evicts the people.

You must be the Monopoly guy. Jesus Christ. Why do I even try? I was also going to say, you know, every time it's sunny, it's because Bill Gates and Warren Buffett decided to take a walk and Bill Gates uses his weather control machines. But anyways. You must be the Monopoly guy.

If you're interested, you can buy the Warren Buffett Monopoly game, I think, on eBay for like $200. $170 used. That's true. You want to get it brand new. You want new. You don't want people's jizz fingers all over those Monopoly pieces. I think it's just their

jizz. If you buy the Warren Buffett Monopoly game, you're coming on it. At least once. One of the pieces of the Warren Buffett Monopoly, literally the shoe or something, it's on eBay as well. And it's like, who's that crafty?

It's like, you know what people want? The Berkshire Hathaway Monopoly shoe for $13. Like, what type of nuanced financial nonsense is this? Maybe someone's missing a shoe. Right. It's like the dick-sucking We Study Billionaires podcast or whatever. Yeah, those pieces of shit. Fuck them.

Yeah. Podcast war. It's on. Like and subscribe. But, you know, it's just like that kind of, like, ass-kissing of billionaires where they're like, oh, I'll buy the shoe from Warren Buffett's Monopoly game and I'll put it on my desk and that'll make me lucky and successful in business, you know, because why. Because why have a four-term congressman father when you can have a shoe piece from Monopoly?

Which piece would you be? I'd be the mobile home. I'd be the half-eaten McDonald's. I'd be the gun pointed at a Colombian union leader. I'd be the flight school. All right, do we want to talk about the uh the fraud didn't train muhammad adab but wouldn't turn him down if he asked we'll join him at sea world um so uh in 1998 um warren buffett bought general reinsurance uh corporation or called gen re

and uh gen re sells insurance uh to other insurance companies what's called reinsurance and uh this is kind of a field that is very um let's say a lot of abuse takes place in it because uh well wait an insurance company an upstanding insurance company that sells insurance to the other group of most trusted companies in the world, insurance companies, is ripe with abuse? Believe it or not, those insurance companies, which, you know, with my experience with insurance companies, here's what I've found is if you Google any insurance company, you're going to look at some one-star Yelp reviews. Like you're looking at like 1.3 average. Because it's like just people get fucked by this insurance company and then leave fucking Google or Yelp reviews about it. So does AIG leave a comment on their insurance company?

But yeah, so January, there were a couple different scandals but the most prominent was warren buffett's general reinsurance uh was involved with a uh deal with aig and aig under hank greenberg um let's say it manipulated their share price semi-regularly uh hank greenberg the ce, the former CEO of AIG, was very obsessed with beating Wall Street estimates of his quarterly earnings and keeping the share price good and stuff. And so he kind of massaged the books.

And so in October 2000, Hank Greenberg calls up the CEO of General Reinsurance, Ronald Ferguson, and they enter into two sham transactions worth about $500 million. So what happens here is they appear as insurance on the books and in the public disclosure, but in actuality, Genry is just giving a loan to AIG.

So Genry takes a secret fee in order to have a quote-unquote insurance transaction with AIG that is actually just a loan. And this is something so that AIG can boost their quarterly earnings and make it look like they're entering into more insurance business and have more reserve capital and this kind of stuff. And AIG would, of course, spectacularly fail and have to be bailed out during the financial crisis, partly because their financial unit under, I think,

Joseph Cassano or something, but he was like one of the biggest perpetrators of fraud during the financial crisis, allegedly, unprosecuted. But the point with this particular sham transaction that existed only to boost AIG's quarterly earnings is it was actually looked at by the government. They were sued by the New York Attorney General, Eliot Spitzer, later settled without admission of wrongdoing.

And four Genry executives were indicted as well as the vice president of AIG. They were convicted in 2008. The CEO of Genry was sentenced to two years. All of those convictions were overturned on appeal, I believe on a technicality in 2011. But what's just kind of interesting is that throughout the course of this i believe warren buffett and my information here comes from the jesse eisenberg uh eisinger book uh the chicken shit club which which i very much recommend our listeners read it talks a lot about the lack of

prosecution uh after the financial crisis but this is secretly a jesse eisenberg themed podcast jesse eisinger i should probably get his name right but anyway so he talks about how warren buffett was for this particular thing uh proffered once he talked to the prosecutors and prosecutors were convinced by that interview that warren buffett didn't know the details but of course according to insurance journal, and I'm quoting now, the executives who were sent to prison had claimed that Buffett was involved in the fraud. Buffett denied the allegations and was never charged. Prosecutors said he did not approve the deal. So, you know, maybe, maybe not. But it's just kind of interesting that he owns this reinsurance company and then he owns another reinsurance company called National Indemnity that did a similar thing in Australia

according to the Australian. We should invest in re-reinsurance. But basically... Rihanna insurance? Oh, that's some good shit right there. Re-reinsurance? Overrated. But basically Buffett owned... Technically, it was a big scandal.

They were overrated. No, Rihanna's never overrated, Andy. Her album was called Antitrust. They made her change it to Anti. But so there was this Australian company, FAI, which bought similar policies, both from Jenry before Warren Buffett bought it, but also from Warren Buffett's National Indemnity Company.

They bought these similar kind of loans that were disguised as insurance and then later went bust and a lot of shareholders lost out and these kinds of things. So Warren Buffett owned at least two companies that were basically modeled on fraud. And it should also be noted that Prudential, in addition to AIG, Prudential entered into these similar transactions with General Reinsurance. So, you know, just kind of like a not particularly good way of doing business or creating real value for the economy is to give loans and pretend those loans are insurance. Another Buffett insurance holding is Geico,

which you all may know is the company that is single-handedly keeping network television afloat. Geico. 15 minutes could save you 15% or more. Warren Buffett was the showrunner for that caveman sitcom. His greatest crime. But yeah, so that's the long and short story of general reinsurance i'd encourage everyone to look into it a little more um and then like just there's some other weird things like warren buffett was at one point the 12 owner of solomon brothers the wall street firm he has since uh sold his shares um but sol Solomon Brothers was involved in the hostile takeover of R.J.R. and Nabisco, which, of course, became the famous book Barbarians at the Gate.

And in that book, Warren Buffett is... R.J.R. and Nabisco, in addition to the cracker business, was at that time involved in cigarettes like Camel and stuff. Oh, they were into the cracker business already. But Warren Buffett at that time gives the quote uh and i'll quote it here i'll tell you why i like the cigarette business it costs a penny to make sell it for a dollar it's addictive and there's fantastic brand loyalty and buffett of course said that in 1987 as to why solomon brothers should do a hostile takeover of rjr nabisco i mean that's the thing about a lot of buffett's

companies is that a good chunk of them uh corroborate in the deaths of millions of Americans and people beyond, whether it's diabetes or poor health, poor airplane health nonsense or cigarettes. Like, you know, he's linked to death. But, you know, the thing about Buffett that's kind of crazy is he knows how to be a couple of steps away and to appear as if he's just a cool dude right but we all know that he really made a phone call to that delta airlines plan where he was like yet you know that doctor that's being all uppity about his seat get a cop to punch him i think think it was United Airlines. He owns both. Yeah. But yeah, no, that was actually the other part he was quoted in in Barbarians at the Gate was they asked him to go in on this deal with him. And he was like, you know, I think cigarettes is like a good business, but I don't want the publicity associated with owning a cigarette company.

So it's like, yeah, you know, he's a smart enough guy to like uh i mean i guess and maybe that's what you need to succeed as an investor in a capitalist economy is just kind of like put human lives into dollar terms um but just understand that there is a negative cost associated with bad publicity you know his his wife did an interview in 2004 and is in various documentaries and she talks about the Buffett sickness and it's that Warren Buffett enjoys playing the game of investing

and to him, the money in his banks is his scorecard. And so it's not even that he likes having that much money. He just likes knowing he's winning. Right. Yeah, and that's like the other thing is like when we started this episode... He's the Michael Jordan of not fixing any societal problems

that he is entirely has the power to fix. Michael Jordan episode coming soon. He's worth a billion people. Hitler mustache and all. But yeah, like it is. That's what crossed him over. It is something that it's like, it's always portrayed as charming

that Buffett still owns the same house he purchased in 1957 and has like a very frugal lifestyle or whatever. But it's also like you're worth 88 billion. You could like help so many people if you just bought more shit or gave your money away for that matter. But whatever. With $88 billion, you could help so many people if you just bought more shit. Or gave your money away, for that matter.

But whatever. And he is donating a good chunk of his money at this point. But the reality is... He still has $88 billion. Right. You could donate it tomorrow. Tomorrow. You know, the thing is that... Thank you, Sean.

Is that his daughter, at one point, wanted to do a kitchen extension in her house. It was going to cost like $41,000. And Warren was like, nah, go to a bank. Fuck you. And it's like, that's the type of shit where it's like, Warren, you don't give a fuck about 41 grand. It's his high score.

His kill-death ratio is really good right now. His literal kill-death ratio. Right. I mean, he is like the Louis C.K. bit. He is just killing people by having all that money. Well, the thing is, too, that's most interesting about Buffett is you can't put him in this nice narrative that you could put Bill Gates or Steve Jobs or Mark Zuckerberg into where you say they had this idea and they built it. Like Bill Gates had this idea to make DOS on other computers. Steve Jobs made the phone.

But with Warren Buffett, he's the most capitalist where it's like he had an idea to put his money in places and get more money back like he made nothing and you can credit him for like oh well he invested in undervalued companies it's like oh okay so he's a parasite's parasite yeah that's that's his best the best way you can frame what he does honestly i think the most interesting thing about Warren Buffett is the fact that he's not actually that buff get the fuck out of this place I think I have my own conspiracy theory that the reason he never invested in Sizzler is he wanted to avoid the NY Post

headline Buffett Buffett's pocketbook buffet he owns the post that's rupert murdoch isn't it yeah it's murdoch no he owns something he owns the buffalo newspaper he had the washington post for a minute that's really i think bezos has now bezos has it um what people don't know is that he mostly wears flip-flops and his fans are called parrot heads and he's very well regarded in margaritaville i think his fans are called losers are there they're buffeted of course there are if you go on like outside of like uh the business

press yeah well i mean that's where most of this stuff lives is like there's the financial success book industry. And then there's like the business press like Bloomberg and Business Insider who are always like the secrets to success. And, you know, Jeff Bezos' morning routine or whatever. Yeah. And so this is where like the real fans of these people live because, you know, it's the high score. And, you know, you can do it if we study billionaires you know you know what i well i bet that susan thompson went across the country because buffett knew that the key to making a billion dollars was to never nut just hold that nut in what to build his essence and eventually she was just like you know what

i'm gonna find a guy in san francisco you hold your nut loss of essence madrick he nuts off once at the annual convention in front of the on the monopoly boards he gets he gets behind the movie screen and it's like I made this movie it's the moment you've all been waiting for I do like the idea of just like a secret chapter of the financial crisis is that

in exchange for the five billion dollars he invested in JP Morgan he made Jamie Dimon suck him off once like I would respect him so much if that was true he just made this titan of industry blow him not for any sort of like sexual reason just as a power move sean everything's about sex except for sex that's about power so buffett eats mcdonald's daily like we talked about uh sean andy stephen i think think one thing I want to mention is if you had unlimited money in your life,

what would be your daily food routine? Sean, where would you go? What would you eat? I would probably switch it up. You know what? If I had unlimited money, I would just hire like a French or Italian chef or something. French or Italian? Yeah.

I like Italian food. What? You're not going to eat Irish food? Come on, Sean. The food of your people? The irish cuisine come on i'm not gonna take that from assassin act colonizer who genocided my people twice and the other and enjoyed it i saw a great take online where they were saying that irish tea is cultural appropriation of british tea and I was like, you guys fucking murdered us all twice and

occupied us for a thousand years, so maybe it's not our fault that we learned tea from you. Did you see what happened during the financial crisis? How bad you guys blew your money? Clearly, Irish success story.

Y'all need to be looked after. I got nothing against the British. They gave us railroads. We're cool, man. It was like just railroads in exchange for just, like, famines where tens of millions of people die. Like that shit's not happening now? Hmm?

Oh, I said, like, that shit's not happening now. Well, interesting fact actually bengal uh was uh the breadbasket of india like it was one of the um i i got this from the radio war nerd podcast uh it was a like it had the most like food and wealth of any province in india and then the british came in and started exporting all of that food. And so I think there were like 10 famines under the British occupation, whereas before there were zero. And they kind of did the same thing in Ireland. You think that's nuts?

You know, allegedly Indian households own between $600 and $800 billion worth of gold. That's three to four times as much as Fort Knox supposedly has. So Indian people are both some of the richest people on this planet and some of the poorest at the same time. Wait, on average? All together, Indian... The average Indian has $600 billion in gold. You know, Buffett's got 88, number two.

That doesn't mean anything to Buffett, though. Buffett doesn't, he's not into gold. He's not a gold man. He's not a gold man. Oh, the country has 600 million. Indian family households,

Indian people in general, have between six to 800 billion dollars worth of gold. Okay. That's crazy. That's like a thousand on average,

less than a thousand on average. I mean, it's more than that. That would be if every less than a thousand on average i mean it's more than that that would be if every person had that much on average but that's there's like maybe a 10 to 20 percent of that population that owns gold oh yeah yeah buffett has a thing where he kind of trolls gold bugs all the time oh really yeah yeah um like he'll he'll just shoot them whenever gold is on the rise he'll like shoot them factoids about like um how there's not nearly enough gold

in order for us to even have a gold standard yeah that's true and support um price level without devaluing to like 0.1 ounce of gold is uh equal to whatever legal tinder fortunately we fixed that with blockchain technology watch out for the blockchain episode warren buffett did say blockchain is like a scam or whatever or he's not into it we know that the true holder of value of the future is litecoin buy litecoin sean is losing money by the day i did put 450 in litecoin so i would encourage all of our listeners to buy litecoin um but so i guess uh two other things i want to talk about before we run out of time here we were uh if you listened last week and you didn't turn it off because it was very dense, you might have heard the story about Warren Buffett, and we've made jokes and allusions to it,

evicting people from their trailer parks. So I just want to kind of review that and quote The Intercept here a little bit. So Berkshire Hathaway owns both Clayton Homes and Vanderbilt Mortgage, which is the nation's largest mobile home empire and its companion lender. Again, quoting from The Intercept, a 2015 investigation, a series of 2015 investigations found that both of those companies, quote, targeted minority borrowers with high pressure sales tactics, issuing loans swollen with hidden fees. When the loans failed, Clayton repossessed and resold the homes, earning more fees each time.

And of course, from that same Intercept article, in 2016, Clayton Homes foreclosed on one in every 40 properties, which is over three times the national average. So, you know, the friendly billionaire eviction man. Selling them into literal debt peonage. Yep. Eviction man, that's my name, that name again, it's eviction Man. Selling them into literal debt peonage. Yep. Eviction Man. That's my name. That name again.

It's Eviction Man. Did you know that he bought his first stock when he was 11 and he made money renting pinball machines at places? That's so charming that this man worth $88 billion through Clayton, again, intercept quote, controls 49% of the manufactured home market. And these are some of the poorest homeowners on the planet. And the third richest man in the world controls half of the market and evicts at three times the average rate. He lives in a modest five-family home that he bought 50 years ago. And you know what?

He uses the same desk. You know he eats the same meal for every morning? He eats the same meal for every meal.'s mcdonald's just like us just think about that and not what we just told you about he likes cherry coke yeah he's uh the mascot of cherry coke in china oh really he got his face on it yeah and wikipedia was sure to know that he did not receive compensation for that so thanks buffett he's got his own bed. This guy just throwing some of the poorest and most vulnerable homeowners

out on the street to run up his fucking high score. Like, this is fucking Overwatch, you piece of shit. Die already, you old bastard. He just no-scoped mobile homeowners. He doesn't use a phone.

He doesn't need a smartphone. He's only sent one email. And it was an email to the president saying, Nuke. If this were StarCraft, it's a typical four-gate strategy. One expansion and you just rush your opponent.

There's a bed named after him. What was that? In that Bill Gates, Warren Buffett tour in that mattress thing, there's a bed that's named after him. I think it's called the Buffett bed. I think it's the Warren bed. I can't remember.

I watched a lot of Warren Buffett documentaries. I'm taking a Dale Carnegie training class coming up. The first time you said that, I thought you were doing a bed, we're like, did you know he owns a bed? Oh, no, no. Just like us. This guy even owns a bed. Well, he does.

What were you saying, Eddie? Like the fact that he doesn't own a smartphone, like that's adorable because he can like just hire an assistant. You can just pay someone like $40,000 a year to do what a smartphone would do. No, carry a desktop. He's old school like that. He just has people follow him around. He carries a gateway around. Yeah.

The CRT. The cow. The cow, yeah, yeah, yeah. In May of 98. He likes pressing the button that makes the screen all wobbly. He doesn't like the LCDs. The screenshaver uh going through the maze um another fun warren buffett fact is just about uh his history with coca-cola and um

warren buffett is not a majority owner of coca-cola but in 1988 uh he began buying uh coca-cola um he purchased again according to this is according to wikipedia he purchased about seven percent of the company for 1.02 billion in 88 i think he's up to like nine or ten percent now it was a very lucrative investment i think the stock peaked in 98 but he still made a lot of money off that coca-cola investment but interestingly and i'm not implying anything here but two years after buffett bought it so between in 1988 buffett starts buying the stock and then between 1990 and 2002 uh 10 union leaders connected to colombian uh coke manufacturing plaques uh plants were murdered um and just like

one particular story uh and their share Coke, not your bargaining rights. There's an alternate story on this. There's also a documentary. So, you know, these, Colombia is not a very safe country in different ways for a myriad of reasons, but paramilitary organizations are often hired to murder

or intimidate union leaders and union members. And so one story is Isidro Gil was shot dead in 1996. I'm quoting from Alternet here. He was shot dead in 1996. He was the union leader of a local plant. And then, quote, just a day after the union contract had expired and was due to be renegotiated, he was shot dead. Almost immediately, all the workers at his plant were herded into the manager's office and given two choices. Either sign a letter of resignation or die.

They all signed. The monthly wage in that plant plummeted from $380 a month to only $100 a month. He lives in the same modest home that he bought for $30,000 50 years ago. And so it's like Buffett is not a majority owner of Coca-Cola, but he's also the third richest man in the world, a savvy investor, and you know

a big investor in Coca-Cola. And so it's like, well clearly he knows that these union murders were going on. He must have heard something at some point. He's never said anything publicly about this. Orders the same sausage and bacon biscuit every morning. He's just like us, folks. But that's the thing about him.

He's the ideal American for capitalism because he's connected to these corporations but has no say. But he's a model example for how successful you can be if you invest carefully and intelligently and keep your mouth shut when they murder people. And have a four-term congressman dad to get you all the connections you need to build up an investment empire. His mom beat him the right amount. So you can become a confident investor.

I think as of, this is just according to to Wikipedia As of September 30, 2017 Berkshire Hathaway had $108 billion in cash and cash equivalents Which I believe include treasury bonds And these kinds of things So a lot of cash on hand for that company And they're going to spend it buying Southwest Airlines Stay tuned folks What's interesting about the treasury bond thing

Is just You don't think about it that much. Which treasury bond thing? That Berkshire Hathaway owns a lot of treasury bonds, basically. You said they had a lot of cash on hand, so either you get no return with the cash or you get some return with the treasury also it's also like a good explanation of why china but does that is one of our main exporters happens to hold a lot of our debt because we have to pay them in cash and so what are they going to do with where this company is going to do with all this u.s oh and then they'll buy from america so they'll just hold a bunch of treasuries okay yeah well it's what's interesting is just how sort of the subtle implications of that is just like, yeah, the American debt is very privatized. Just how much of the government is held in private hands own enough treasury bonds yourself that it generates a livable income stream just from that. I mean, yeah, that's corporate welfare.

Yeah. Definition. Well, I think like Stephanie Kelton, we to be matched by a dollar issuance of treasury bonds. But there's no law in economics that says you can't just print money without issuing these treasury bonds that, of course, rich people buy and then receive income from. Right. It's just one of our – it's how that operationally we've chosen for that to make sense in our system. But it's also... It seems hard to escape the idea that, like, if you buy enough of these treasury bonds

and are that tied into basically the government financial system, like, you will have influence in a way that... I mean, manipulate people. Like... i mean tons tons of people do own treasury bonds through their 401ks and whatnot right right but they earn i mean right now they earn so little but it's just seen as a safe asset yeah that's the main thing and it's better than but yeah if you're if you're a billionaire and you have one percent of your portfolio in treasuries that's a lot of money. And you're basically getting the equivalent of a household's living expenses paid for for nothing.

No. Not your household because you're a billionaire. Well, unless you live in a— The equivalent of a median household income. In a modest five-bedroom house that you bought for $30,000 50 years ago. It's real weekend at Bernie's. Would you say it's a stucco house in Omaha. It's real weekend at Bernie's. Would you say it's a stucco house in Omaha? It's real weekend at Bernie's.

But yeah, I guess so. Anything else we didn't get to with Buffett before we check in on our fun, exciting new stock market game? We're good? I think we're good. We're good on Buffett? He's secretly training on hijackers. I bought a whole bunch of Microsoft stock.

I bought a whole bunch of Yum Foods. Yum Foods owns Taco Bell, KFC. They got a Pepsi contract, Long John Silver's. I'm going to purchase Amazon. I think cash cow right there, baby. All my money is going to tech and food. So watch out, ladies and gentlemen. We're going to ride this train out.

I think I'm going all in on financial stocks based on the deregulation, on the hope that i can hit a billion dollars before the crash so i might sell at some point um just trying to like ride the wave and then get out before the thing hits the shore you know um but i'm definitely buying some berkshire hathaway because apparently they own more of the u.S. economy than I had ever realized. But you know what? If you guys get on this stock market game with us, we'll buy you some Dairy Queen. Push up that Berkshire Hathaway stock a little bit. The app is Best Brokers.

I'm Grubstickers Yogi on it, and the rest of them are the rest of them. Yeah, I'm Grubstickers Sean, S-E-A-N. I'm Grubstickers Andy. Grubstickers Steve. And just friend us and then you'll we'll have our own leaderboard. And if you have any problems using the app, Andy's DMs are

always open. And not just questions about the app. Life advice, anything to do with weird rashes and pimples. Really, anything you want to DM, DM it to... Listen, if you can interpret pictures of pregnant Sonic

to help you with the stockbroking, feel free to DM. Andy sent me a picture. Real hedgehogs by Raytheon. It was a picture somebody drew of Master Chief from Halo fucking Sonic in the ass

or something. And my girlfriend of course was looking through my phone and she saw that and I was just like you know I just don't have a good explanation for why this is saved on my phone. I don't even remember sending that but I'm glad I did. Alright. Anything else?

That's good for me. All right. Well, hey, thanks. Thank you all for listening. We'll see you next week. That's a hard act to follow. I was over there finishing the notes on my pages here, and I'm not trying to be cool.

I left my reading glasses in the car. So we'll get started here. It's quite an honor and quite a thrill to be here. I've spent many, many years here on campus, off campus, and it's quite an honor. Thank you, Donna. Good luck in whatever you do. I know you'll be successful. I hope I'm successful today because that will not bear well for both of us if I am not. To Shelly Berg, a dear friend that we spend

a lot of time together in other kind of places and playing music together, the best music school dean and cocktail hour piano player that I ever know. You should see the other side of him sometime. I've got to give a quick shout-out to... I had to get speech coaches for this thing, you know, so to my coaches, Carl Hurltz, Maureen Dowd, and Mac McAnally, thank you for listening and editing wisely. And a belated thanks to my dear friend Jerry Jeff Walker. I have to take this opportunity, standing here today, thinking about when he took me

into his coconut grove house back when I really had nothing and came to town, not far from this campus, and then convinced me to get with him in a 1947 Packard and drive to Key West, Florida for the very first time. Needless to say, my life took a big and wonderful change toward South Florida, which has a lot to do with why I'm standing here today. Thank you, Jerry Jeff. I also want to thank whoever came up with this cool outfit. It's kind of like a Mardi Gras costume with a purpose.

And I am a child of the Mardi Gras. And my daughter Savannah, a former student here, bought me these great flip flops to go with it. So it's a long way from that Catholic school uniform I used to have to wear.