Buffett opens with a thought experiment for the students. If you could buy ten percent of one classmate's lifetime earnings, who would you pick? Not the one with the best grades, he argues, but the one whose character you'd bet on. That leads into the three qualities he hires for: intelligence, energy, and integrity, and why the third makes the other two dangerous when it's missing.
The Q&A runs wide. He explains the circle of competence using the two thousand American car companies that didn't survive, and the airplane makers whose combined earnings since Kitty Hawk added up to less than nothing. He defines intrinsic value as simply the cash a business will hand you between now and judgment day, discounted properly, and traces the idea back to Aesop.
He's candid about his failures: buying Berkshire Hathaway itself, the cigar butt years, the US Air preferred, and the filling station stake he calculates has cost him billions in foregone compounding. But the costliest mistakes, he insists, never show up in any accounting. They're the opportunities he understood and sat on anyway.
Also covered: why the Dow went nowhere for seventeen years while the economy kept improving, why the Fed's brake works better than its gas pedal, how he instructs his trustees to give the money away, and the story of Rose Blumkin, who walked out of Russia in 1921, couldn't read or write, and built the largest home furnishings store in the world.
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