Quotable Warren Buffett

“Capitalism without failure is like Christianity without hell,” said Warren Buffett at yesterday’s annual press conference with partner Charlie Munger. This news conference took place one day after the annual report for Berkshire Hathaway was released. Buffett was referring to his belief that not all financial institutions are worth saving. Some deserve failure based on their past and current practices.

At 77 Buffett is as quotable, and blunt, as ever. I suspect he’ll become even more so given his age, and the current state of Wall Street.

Speaking of the sub-prime fiasco - and other idiotic acts of the banking industry - Mr. Buffett said, “You’ve got a lot of leeway in running a bank to not tell the truth for quite a while.”

Among the more humorous interchanges are this one, as reported by The Financial Post. The topic was the succession plan at Berkshire Hathaway.

Charlie Munger, Mr. Buffett’s business partner who is seven years his elder, humourously added to the applause of the audience: “We still have a rising young man here named Warren Buffett, and I think we must encourage this rising young man to reach his full potential.”

Mr. Buffett joked that because he and Mr. Munger average 80 years of age (Buffett is currently 77 and Munger is 84), they are getting only 1.25% older per year, while a 50-year old executive is getting 2% older each year. That means Berkshire’s top executives are ageing more slowly than the top executives at nearly every other company.