2:19 pm:  Buffett asks a man making a statement on property rights if he has a question.  The response: no.  Buffett jokes, "I kind of suspected that."

2:20 pm:  The popularity of the car in the U.S. makes expansion of mass transit in the country very unlikely.  "It seems to be human nature."

2:22 pm:  In response to a question on whether credit default swap market will follow sub-prime as the next financial disaster.  Buffett notes that Berkshire has been in that market, writing what is in effect insurance against a company going bankrupt.  He says he doubts there will be a problem, in part due to the example the Federal Reserve set when it stepped in to prevent the collapse of Bear Stearns.  Credit defaults have been very volatile, but it hasn't created a problem yet.  As long as the Fed is ready to step in, he doesn't see a systemic risk.  Some institutions may lose a lot of money, but someone else will make a lot of money.  Munger says there is some stupidity in the credit default swap market, but not as much as there was in the mortgage market when "bums were swept off skid row and given mortgages."  (Charlie seems to talk a lot about stupidity.)

2:32 pm: Twelve-year-old asks why Buffett didn't follow Ben Graham's lead and embrace dividends.  He jokes that he had to do some things on his own.  He goes on to say that some Berkshire Hathaway subsidiaries do generate excess cash, like See's Candies, but it's spread around the company rather than paid to shareholders as dividends because he thinks the company will make better use of the money, benefiting shareholders in the long run who would also be taxed on dividends.

2:38 pm:  Q - Would Berkshire consider a major purchase of a business in China or India?  A - Buffett replies that the odds of doing a major purchase in any one country except for the U.S. are fairly low.  Will probably buy some smaller companies, and doesn't rule out a large acquisition in any given foreign country.

2:40 pm: Q - Who has influenced you the most in investing and life?  A - Buffett says his greatest influence was his father, followed by Ben Graham, Dave Dodd .. and Charlie has learned a lot from Ben Franklin.  He notes that parents are very important teachers who instruct more by what they do than by what they say.  Munger says people learn in different ways.  He learned a lot from reading.

2:46 pm:  On excessive executive compensation, Buffett notes that "big wigs" don't like to be embarrassed, so shareholders should speak up when they see excesses and the press will do the rest.  He notes that it's been tough for shareholders to do that.

2:49 pm: Munger says high-ranking executives have a "moral duty" not to take too much money.

2:51 pm: Q - How do you know that a company's competitive advantage is enduring, especially with drug companies that have products "in the pipeline" that are hard to evaluate.  Buffett says it's hard to tell if individual drug companies will do well, but that the group should do well over time.  "We do not pick one-by-one" when it comes to drug companies.

2:54 pm:  "The Chinese people are starting to realize their potential."

2:58 pm:  Buffett says his hope for Berkshire Hathaway 20 years from now is that its culture will be maintained, that it will be seen as a place where good managers want to work for the rest of their lives.  That and to have the world's "oldest living managers."  The audeince rises for a standing ovation.  That concludes the Q&A session.

3:10 pm: After taking a break, Buffett is now conducting the formal business session of the annual meeting.  It is totally routine.

3:15:  Buffett, Munger and the other directors have been re-elected to the Board and the meeting has been adjourned.

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