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WARREN BUFFETT: Zone 7.

AUDIENCE MEMBER: My name is Mike Seeley (PH) from Summit, New Jersey.

Would you please revisit the question of share repurchase for Berkshire Hathaway?

We have heard, today, your comment about the price of Berkshire having been inefficiently priced from time to time in the past. We know that there are now more shares outstanding.

And I’m curious as to whether the buildup of cash is causing you to spend more time looking for investment situations where you’re more comfortable on the 10-year outlook. Thank you.

WARREN BUFFETT: The question of repurchasing shares — and I made that comment about it being inefficiently priced at times — at those times it always seemed to us — and we were incorrect in some cases — it always seemed to us that there were other securities that were even less efficiently priced.

When Berkshire in 1974 sold at $50 a share, I might have thought it was cheap. But I also was looking at the whole Washington Post Company selling for 80 million when I thought it was clearly worth 400 million. And I did not think that Berkshire was underpriced then as the Washington Post Company was.

And that has been true at various times when — there have been times when I thought Berkshire has been underpriced, or even significantly underpriced, but at the same time I was finding other things which I felt were even more attractive.

And like I said, many times I was wrong. We would have been better off buying our own stock instead of buying the things that I was buying.

But the — if we have money around, and we think Berkshire is significantly underpriced, and we’re not finding other things to do with money, it obviously makes sense for us to repurchase Berkshire shares.

I think it’s difficult for most companies in this market, even though repurchases are probably at close to an all-time high, if not at an all-time high, I think it’s difficult for most companies to be repurchasing — have a repurchase of shares make a whole lot of sense these days.

I mean, I do not think they’re getting much for their money, because we don’t want to buy those shares ourselves. And it’s — and I’m talking about the stock of various companies in America.

And yet, companies are much more enthusiastic about repurchasing shares now than they were 20 years ago when they were getting far, far greater returns from repurchasing.

We will always — it’s an option that we will always think about. And we’re unlikely to do it unless we think it’s fairly dramatically underpriced because it’s simply — we would want a big margin for error in making that kind of a decision that — not want to — we would not want to buy a dollar bill for 95 cents, or 94 cents, or 93 cents.

But there is some level where we would start getting excited, if we didn’t have other uses for the money. Charlie.

CHARLIE MUNGER: I’ve got nothing to add to that.