 In the investment world, it involves an enormous amount of high IQ people trying to be more skillful and normal and hardly imagine another activity that gets so much attention. And weird things have happened. And years ago, one of our local investment counseling shops, a very big one, they were looking for a way to get an advantage over other investment counseling shops. And the reason this follows. We've got all these brilliant young people from Wharton and Harvard and so forth. And they work so hard trying to understand business and market trends and everything else. And if we just ask each one of our most brilliant men for their single best idea, then create a formula with this collection of best ideas, we would outperform averages by a big amount. And that seemed plausible to them because they were ill-educated. That's what happens when you go to Harvard and Wharton. And so they tried it out, and of course it failed utterly. So they tried it again, and it failed utterly. They tried it a third time and it also failed. And of course what they were looking for is the equivalent of the alchemists of centuries ago who wanted to turn lead into gold. They thought if you could just buy a lot of lead and weight or magic wand over to turn into gold, that would be a good way to make money. Well, this counseling shop was looking for the equivalent of turning lead into gold. And of course it didn't work. I could have told them but they didn't ask me. Nothing. The interesting thing about this situation is that this is a very intelligent group of people that's come from all over the world. You've got a lot of bright people from China who are people tend to average out a little smarter. And the issue is very simple. There's a simple question. Why did that plausible idea fail? Just think about it for a minute. You've all been to fancy educational institutions. I bet you there's hardly one in the audience who knows why that thing failed. That's a pretty ridiculous demonstration I'm making. How could you not know that? But that's one you should be able to answer. It shows how hard it is to be rational on something very simple. How hard it is, how many kind of crazy ideas people have and they don't work. You don't even know why they don't work, even though it's perfectly obvious they've been properly educated. Now at a place like Berkshire Hathaway or even the Daily Journal, we've done better than average. And now there's a question. Why has that happened? Why has that happened? And the answer is pretty simple. We tried to do less. We never had the illusion we could just hire a bunch of bright young people and they would know more than anybody about canned soup and aerospace and utilities and so on and so on and so on. We never had that dream. We never thought we could get really useful information on all subjects like Jen Kramer pretends to have. And we always realized that if we worked very hard, we could find a few things where we were right and that a few things were enough and that that was a reasonable expectation. That is a very different way to approach the process. And if you had asked Warren Buffett the same thing that this investment counseling did, give me your best idea this year and you just followed Warren's best idea, you would find it worked beautifully. But he would, trying to know a whole, he would give you one or two stocks. He had more limited ambitions. I had a grandfather who was very useful to me. My mother's grandfather and he was a pioneer and he came out with no money but youth and health and took it away from the Indians. He fought in the Black Hawk, he was a captain in the Black Hawk Wars and he stayed there and he bought cheap land and he was aggressive and intelligent and so forth and eventually he was the richest man in the town and on the bank and highly regarded and a huge family and a very happy life. And he had the attitude, having come out to Iowa when the land was not much more than a dollar an acre and having stayed there until that black top soil created a modern and rich civilization in some of the best land in the world. His attitude was that in a favored life like his when you were located in the right place, you just got a few opportunities if you lived to be about 90. And the trick in coming out well was seizing a few opportunities that were your fair share that came along when they did and he told that story over and over again to the grandchildren and I went around him all summer and my mother who had no interest in money remembered the story and told it to me but I'm not my mother's natural imitator and I knew Grandpa England was right and so I always knew from the very first, I was a little boy, that the opportunities that were important that were gonna come to me were few and that the trick was to prepare myself for seizing the few that came. This is not the attitude they have at a big investment counseling thing. They think if they study a million things they can know a million things and that of course the result is almost nobody can outperform an index whereas I sit here with my daily journal stock, my Bircher Hathaway stock, my Holdings and Lelous Asian Fund, my Costco stock and of course I'm outperforming everybody. I'm 95 years old and I probably never have a transaction and the answer is I'm right and they're wrong and that's why it's worked for me and not for them. Another issue of course that's happened in the world of stock picking where all this money and effort goes in to try and be rational is that we've had a really horrible thing happen to the investment counseling class and that is these index funds have come along and they basically beat everybody and not only that, the amount by which they beat everybody is roughly the amount of cost of running the operation and making the changes in investments. So we have a whole profession that is basically being paid for accomplishing practically nothing. This is very peculiar. This is not the case with bowel surgery or even the criminal defense bar and the law or something that whole profession where the chosen activity they've selected they can't do anything. Now in the old days the people in the profession always had some of this problem and they rationalized as follows. We are saving our clients from the insurance salesman and the stock broker. The standard stock broker that serves the active trader and they were saving people from the live insurance salesman and the hustling stock broker who liked active trading. And I suppose in the sense that the investing class is still saving those people from an even worse fate but it is very peculiar when a whole profession that works so hard and is so admirable and the members of which we are delighted when they marry into our families and they just can't do what the profession is really trying to do which is get better than average results. How is that profession handling this terrible situation as index investing gets more and more popular and including a lot of fancy places? Well I get a very simple answer they're handling with denial. They have a horrible problem they can't fix so they just treat it as non-existent. This is a very stupid way to handle a problem. Now it may be good when you're thinking about your own death which you can't fix and just denial all the way to the end but in all the practical fields of life this problem thoroughly understood is half solved or better coped with. So it's wrong to have all these people in just a state of denial and doing what they've always did year after year and hoping that the world will keep paying them for it even though an unmanaged index is virtually certain to do better. And I don't have any solution for this problem. I do think that index investing if everybody did it won't work but for another considerable period index investing is gonna work better than active stock picking where you try and know a lot.