Rose bill gates and Warren Buffett when we continue. Rose funding for charlie rose has been provided by the following and by bloomberg, a provider of multimedia news and Information Services worldwide. Captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Rose bill gates and Warren Buffett are here. Gates is the cochair of the bill and Melinda Gates foundation, philanthropy focuses on education, poverty and public health. Warren buffett is founder of berkshire hathaway. Together the two started the giving pledge in 2010, encourages the wealthy to donate to causes. Bill gates has given 24 billion to charities. Pleased to have both of them back at the table. Welcome. We did Something Like this at Columbia University with 1,000 students. You do this before. There is Something Special about the curiosity and the interest of young people, wanting to know how do they learn from you, wanting to know if you were starting over what would you do, wanting to know about values. Well, about the friendship, we met on july 5, 1991, and hit it off middle east. Bill was a little reluctant at first but he got there. Rose reluctant to come. If it wasnt for his mother, we would probably not know each other. We had a good time ever since and we cooperated particularly on the giving pledge but other things as well. I have to say, everything about it has turned out well. Rose he sits on your board. He sits on the berkshire board, and we have a lot of fun talking about a lot of things, but the big thing that really came out of one of those discussions really was the giving pledge. Thats worked out so much better than i ever anticipated, charlie. I thought if we got 30, 40 people, you know rose how many have you i think 156 or Something Like that. The people and now weve gone beyond the borders of the United States, which i didnt feel would originally happen, and people are learning more, our members, about effective philanthropy. Theyre learning about things that didnt work. Theyre learning about how people handle within their families, wealthy families, and its worked out so much better than i would guess six or seven years ago. Rose both of you made the point that there are a lot because of success and technology, there are a lot of people with a lot of money who are much younger. Yeah, its a great thing these companies are doing so well and as a group, i would say its a particularly fenne philanthropic. Rose the word is reluctant to give earlier than you did . I hadnt taken time to understand where the huge payoffs were, and i was pretty maniacal about microsoft, and only in my late 30s, with some encouragement from my wife melindaamelinda, did i start toy and talk with her about it. We knew we would do it by the time i was 60, but as we were doing the learning we decided to accelerate it and found a lot of ways to have high impact. Rose the principle mission call is all lives are equal. Thats right, and a lot of that outside the United States has gone to save lives and have kids grow up to be healthy. Rose how did you decide that you would rather give your money to the Gates Foundation rather than create a foundation of your own and go out and find people to run it and do whatever you wanted to do. My first wife susie and i started the foundation over 50 years ago and we talked about it since we were in our 20s. I said to her, if i compound money at the rate i hope to compound money, there will be likely large sums later on, youre good at giving it away, im good at making it, so ill make it and you give it away. She thought it was sort of half a copout, half logical. laughter so we did something, like i said, we started over 50 years ago, but i really thought there would be large sums later on, and she was particularly good at empathizing with people, understanding their needs, putting the personal energy into it, everything. She would be better at giving away money than i would be, and she died if 2004. So i had to rethink what i was going to do. So in 2006, i decided that, essentially, five foundations, the bill and Melinda Gates foundation being the largest of five foundations, and i looked for people with similar goals in philanthropy than i had. The goal of every life is of equal value was important to me. Rose and you knew bill would run it well. You had two much younger people, very bright and hard working. They work much harder than most people do at their jobs. They were on the same track as i was on. Proven quantity. Everything about it made sense. Its continued to make sense ten years later. Rose bill, talk about melindas influence. You said i was a mess until i met susie. I think thats understating it. laughter she changed my life. Rose how . I was a lopsided, not very well adjusted person that happened to be good at one thing and she put me together. It wasnt overnight, either, but she had that little sprin spring can and rose was it coming together of opposites . No, we had similar values and we were in sync in a very big way, but she was way more mature than i was. She was 19 when we got married, i was 21. I was about 12 emotionally. She put me together. It took time, but it changed my life. I would not have been anything like rose and charlie munger. He was my partner of 57, 58 years. Hes extremely wise, a wonderful friend. Hes strong minded, im strongminded. We disagree, but never had an argument in that whole time. Rose never had an argument. Thats absolutely true. Rose you must disagree. Absolutely. Rose if you disagree, how do you decide when we disagree, he says, warren, you will end up agreeing because youre smart and im right. laughter rose you will figure out im right. Often hes right. I have to say that. I respect his opinion enormous, but its more fun doing thing with partners. The most fun is, obviously, a marriage partner, and thats the most important relationship, but having a business partner, if i had done everything i had done, it wouldnt have worked out this way, but say i got double the results, would have been more fun doing it with charlie. Rose who says no to bill gates . Well, melinda. Rose ive seen it happen laughter its great when somebody knows you might move too fast or be overoptimistic, or if a team comes in and im pointing out things we havent done and maybe theyre not as motivated afterwards, so, you know, and get me to correct that. Ive matured a lot and i give melinda immense cr she still has work to do, but i think im getting there. Complementary strengths where you share the same goal is a great thing. I have that with paul allen in the early days with microsoft, with steve volmer. And now in the foundation and family life, its melinda. Rose how much time do you spent at microsoft . Im there about 50 of the time. I get to work on the r d part, brainstorming with people saying, how will we take the Artificial Intelligence and make you understand and use it better. Its a very exciting time in software. There are five companies in a really strong position. Microsoft is leading in some really cool stuff rose like what is this. Oh, the way that a business takes information about customers, about communication with customers, looking at data, that mission of really using data and a. I. And getting the productivity of all the workers becausbecause they have informa, its a multimilliondollar niche theyre strong in, and they will be innovating along that line more in the next two years than ever in our history. Rose you have a passion for Artificial Intelligence, you do. Yeah, its the ultimate dream when you start working on software is the kind of deep understanding and intelligence that humans have. So its been the holy grail of when can the computer learn to play games, learn to read, understand speech. And speech and vision have made such progress in recent years. You have been tracking this and exposing your viewers to some of it, because i cant overstate that, for even people in the field, its a pretty magical time. Rose and its potential is to do what . Change everything . Well, in the first instance, to be the best assistance ever, to look at all your information and help you know in the few minutes between meetings what you should look at or when youre planning a trip to organize things, to be a much better assistant than it is today and then, eventually, certain mechanical tasks like warehouse work or driving, that it would take that over. But for intellectual work, it will just magnify the creativity and make your time more valuable. Rose are you interested in technology . I dont have enough i dont think i have a natural bent that way to start with. I would be so far behind, i never would catch up with people who had been working on it. It would not be a game i would be winning. Rose is it a Principle Criteria for you understanding the business . Yeah, i have to understand the business. Lots of businesses i dont understand, some may be almost ununderstandable, and others are outside my sphere of competence. Rose but you have people who have that kind of expertise that you have brought in. I have two people who themselves have different circles of competence, but they arent chosing because they have a different circle, there is a lot of overlap and overlap between them, but the important thing is not how its nice to have a huge circle of competence, its much more important where the limits are of it. You can do very well if you only understand five of the businesses in the country. Rose and find plenty of opportunities. And you know the 5 are in that circle. Rose you made a huge purchase in 2016. Precision was bought in 2016, 37 billion. Including debt, 33 billion or 4 billion in cash and acquisition of debt. Rose is it hard to find a candidate. Sure, we have to move the needle in market value. If we make a billion dollars, were talking a quarter percent of one percent, more than a billion and a half pretax. So its hard to find things. I would do better percentagewise if i was working with smaller capital. Rose how do you find them . Its interesting. Ill get a call, be sitting thinking i mean, different things. In terms of buying private businesses because i get a call from a private seller, but occasionally i just decide to act, and we never do anything unfriendly in terms of buying whole businesses rose but are there people who know and are close to you on the lookout for you . Not much. laughter charlie, weve net bought 12 billion of common stocks since the election. Its in my mind which ones i pick. Now, the guys that work with me, the two fellows probably bought a little bit, too, but those are ideas ive at either come at with an idea of a different slant or whatever it may be. Rose are the airlines up with of those . It was shown on september 30th that we own some airlines, some stock. Rose so why did you do that . Well, i wont get into it. laughter but it was in large part my decision. Rose the old joke is, as you know, how you start as a billionaire and buy an airline. There is no question its been a graveyard for a lot of money. Rose but transportation has been something that the railroads and air license are not re and airlines are not related. Theyre different businesses. Airlines and track people, there is a certain romance, so you can actually go into the business and more than 100 airlines have gone broke in the last 25 years or Something Like that, so its a different sort of business. Rose how has knowing bill changed, influenced or enhanced your sense of the way the world works . Well, i learn from him. I like to learn from all friends and bill is a particularly good source. But thats the fun of having friends, charlie. I dont think i would be would be hard for me to be a friend with anyone i dont learn something from. They probably get kind of bored with me whos that guy talking about stocks laughter rose what have you learned from him . Immense amount. H he wrote an article for Fortune Magazine that i read before i met him that its not necessarily a good idea to leave large sums to your children. That was pretty fundamental and i remember reading that and i was convinced that was right and i thought, wow, now you have to think of how to give it away. I also remember him showing me his calendar. I had every minute packed and i thought that was the only way you could do things. The fact that he is so careful about he has days rose that there is nothing on it. Absolutely. Rose this is the week of april of which there are only three entries for a week. There will be four by april. File taxes. Rose not to crowd yourself too much and give yourself time to read and think and right. You control your time, and sitting and thinking may be of much higher priority than a minr schedule. I could buy anything i want, basically, but i cant buy time. Rose so to have time is the most precious thing you can have. I better be careful with it. There is no way i will be able to buy more time. Rose living in omaha makes it easier . Makes it a lot easier. For 54 years, i spent five minutes going each way. Imagine that was half an hour each way, i would know the words to a lot more songs, and thats about it. Rose it adds up, doesnt it . It really adds up. If youre talking an hour a day difference coming and going, and thats two and a half percent of the persons work week, that means 40 years youre talking about. Rose do you agree politically . On almost everything. You know, the general sense youve got to keep the economy turning up greater output and that you have to allocate it in a fair way, yeah, that basic framework we see very much the same. Rose do both of you believe we can achieve a 4 growth rate . Thats very high. Rose by 2016, i think the last quarter was 1. 6 or something. Charlie, a 2 growth rate, if we have little less than 1 population growth which we probably will, in one generation, 25 years, now people have kids a little later, will add 19,000 per capita family of four, 76,000 to real g. D. P. So a family of four on average, there would be 76,000 more stuff per family of four in one generation. I mean, we are going to have more the goose is going to keep laying more golden eggs. Weve got a wonderful system. Rose well, but there are certain things that could get in the way of that. 2 . I think well do 2 . Rose 2 . Yeah, and 2 will produce miracles. Rose and 3 is probably possible, isnt it . It could be, but that would be fabulous. Rose right. And 2 , 19,000 per capita, thats greater than exists in a whole lot of countries, that will be added. The question is what will we do with it. Rose how do you see the future of china . Well, theyve done a great job on some things. Theyre not a democracy, so it hangs in the balance how their political system will evolve, so in terms of raising incomes, getting rid of poverty and improving health, its an unbelievable miracle that they embrace in their own special way to have the market since really just 1990, theyve done very well. So theyre the second biggest economy in the world. Theyre serious about trade. Theyre serious about clean energy. They are super important. The most important relationship in the world is the u. S. China relationship. Rose clearly, because theyre the two biggest economic powers in the world. True, and were strong and were going to stay very strong. Rose what could make us not stay strong . There is a lot of strength that weve built up over decades, the way we do research, our universities, the way that people take risks, and thats why our Technology Companies are still so strong. Our Biotech Companies are still so strong. So the Education System is one that, you know, we need to go back and look at, you know, and that is one huge source of inequity, because if you get a great education, actually, the outcomes are pretty good. Rose experience has told you your experience has told you its much harder than even you imagined. Improving the u. S. Education system, yes. The dropout rate has gone down a bit, so thats great, but the overall reading scores, math scores and the inequality hasnt budged much in the last ten years. One of the goals of our foundation is to working with partners, change that, and, so far, its proven to be one of the tougher ones, we still believe that its super important, and they are promising, if we look at individual schools, we see great things, so we still believe its achievable. Rose all the talk about immigration, we talk about it a little bit, but all the talk about immigration, are we still looking at a situation where some of the best and brightest overseas come here, get an education and go back to india or china or whatever rather than staying here . Well, a lot do stay, and the most important import the u. S. Has ever had by far is human talent. Its been to our benefit that a lot of the hardest working, best and brightest from almost every country in the world have wanted to come to the u. S. So if you look at University Departments or, you know, doctors, engineers, people starting up companies, building jobs, its been a huge strength of ours. We havent always made it super easy for that to work, but it has worked very, very well. So the number going back, its meaningful, but net we are still a huge beneficiary of human talent. Rose but it used to be said and tom feedman i think wrote this, we ought to staple a green card to every diploma. I believe that. Is that a bias because im from the Tech Industry where we can create multiple jobs around the engineer instead of having to do that outside the United States, yes, i believe that keeping talent in the country is a great thing. Rose tell us a story, because you told me the story, you think the second most important document in americas history after the declaration of independence or perhaps the u. S. Constitution or both is this letter by two immigrants a letter written by two jewish immigrants. That doesnt sound like much, but in august of 1939, just before germany moved into poland, leo zolard, whose name is not well known, who was born in hungary, but he went to germany and worked in germany with Albert Einstein and, in 1933, i believe both of them left germany, and they come to the United States, and they become United States citizens and they cosign a letter to president roosevelt, and that letter which you can see on the internet, not e