"The hell of it is you're only going to be loved if you're lovable. If you are, you get it back in spades," he said. "The truth is you always get back more than you give away. Some people never learn that. They're busy cheating people, cutting corners, lying to them, all kinds of things and they think they're a success because they have tens of millions of dollars later in life. I don't think they are a success and I don't think deep down they feel like they are a success."

Buffett said he's been fortunate to be able to make his money where he wanted to make it — in Omaha, Neb.

"I'm still in the same house I bought for $31,000 in 1958. That's where my kids grew up. They went to a public school four or five blocks from where we lived. They walked to school just like every other kid," he said. "They didn't grow up thinking they were entitled to anything."

Perhaps Midwestern values play a role in Buffett's philosophy that all investors should be treated equally.

"We don't in any way treat fidelity if they own a chunk of stock differently than we treat the person who owns one share of Berkshire stock. In my view they're all partners. They're all entitled to information at exactly the same time," he said. "Other companies, many of them, feel they have to coddle, solicit institutional investors. I'd really rather have nothing but individuals because actually they make better investors over time. They're not worried about meeting the S&P every quarter. They're worried about actually making a good investment."

Buffett doesn't want anyone at Berkshire forecasting quarterly earnings.

"Whatever we're going to earn next quarter we're going to earn. I don't know what we're going to earn next quarter. I don't know what we're going to earn next year. We'll do our best. That's all in my view any company should say.

When asked during the "anything goes" question-and-answer session whether hedge funds were a fad, Buffett answered, "Wall Street will sell anything that can be sold.

"The one thing you can be sure of with hedge fund operators is that they will make a lot of money.

"I would be willing to bet a lot of money against anybody who wants to name 10 hedge funds from today as to whether those 10 will outperform the S&P over a 10-year period," Buffett said. "I'll win that bet."

When discussing the enormous U.S. trade deficit, Buffett said, "We are transferring the wealth of America to the rest of the world.

"We're trading wealth for goods," he said. "Every year we're consuming about 3 percent more than we're producing and the rest of the world is giving us that 3 percent. As this rich family, we give them a little bit of our farm every year.

"I think it's the most important economic issue that the country faces," Buffett said.

He also sees a "potential for huge problems" with the derivatives market.

"They have resulted in a huge hair-trigger, interdependent financial market that poses, in my view, fairly big risks — not tomorrow, the next day, next year. You can't tell when it will hit," Buffett said. "It's an explosive activity that will exacerbate to an enormous extent any crisis that comes about for other reasons. If I could roll back the clock on them, I would."

Buffett said recent corporate scandals and fallen CEO stars have resulted in "somewhat more honest reporting and behavior."

Buffett said there has been a positive change in atmosphere from a climate in which "people wanted to believe in the tooth fairy — they thought of the omnipotent CEO and they may have felt games were being played with the earnings but they always thought they'd be benevolent games."

Berkshire Hathaway owns about 40 companies, including Dairy Queen, Benjamin Moore & Co., Fruit of the Loom, GEICO Direct Auto Insurance, Helzberg Diamonds, The Pampered Chef, Shaw Industries and See's Candies.

With each business, Buffett saw the potential for great profit and grabbed it. He encouraged Georgia Tech students to do the same.

"There are times when you'll have extraordinary opportunities and you have to seize them."

©2005 Georgia Tech Alumni Association