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looselucy · 6 years ago

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Us & Them

April 14th It was 9am, and Chloe had been talking my ear off for the past 45 minutes, gabbing down the phone about something or nothing and absolutely anything.

“And literally, it has only been a matter of weeks since I said to Libby, we need to go to a city soon or something because we need to get laid, and she was like nah, and now I know why. She was already getting laid. Louis was laying her.” “He was.” I giggled. “Do you think he’s good in bed?” “Can’t say I’ve ever really thought about it.” “Really? I think about what everyone would be like in bed. Girls included.” She told me. “I think Louis is one of those who isn’t much special until he gets to know your body, then he’s well good.” “What do you think I’d be like?” I sniggered. “Slow and sexy.” “Awh, thanks Chloe!” “Lin goes like a rabbit for hours. Libby probably likes kinky shit. Niall is up for anything. Harry is hard but passionate. I mean, he’s a self-defence teacher and an artist. I bet that juxtaposition is an absolute treat.” Due to how spot on her description of what Harry would be like in bed was, I genuinely started pondering over just how accurate her other predictions were. I was blushing, rolling over on my bed to stare up to the ceiling. “Mm, I bet.” I bit my lip. “Whoever gets to find out is a lucky girl.” “Tell me about it.” She groaned. “Hey, what’s the plan tonight? It’s Harry’s birthday, right?” I was still surprised by how things had played out in terms of us knowing about Harry’s work and his secret coming to light. He’d been so composed and laidback about all of it, so understanding and almost humorous. He’d opened his sessions up again the following Wednesday on the 10th, followed by our weekly trip to The Tin Mouse, and even when they’d all grilled him and gotten excited, he’d been so fine about all of it! I suppose he really had expected at least one of us to have known for longer anyway; it wasn’t unfamiliar to him, having people know about his work. It wasn’t like all the stuff with his family, which was private and his own to share. His career had opened doors and broken down walls and left him exposed in ways that couldn’t be reversed, and he seemed to understand that. His work was a spectacle in ways his private life needn’t be. It was different. In a strange and unpredictable way, it actually seemed as though he felt better for us all knowing, as though a weight had been lifted. Maybe him being back in Rosebury was a big contribution to it, but over the past week or so, it felt like it was the happiest I had ever seen him. He was beginning to open up in ways I hadn’t foreseen, slowly stitching the pieces of his life together to create something whole. I was sure even a few short months earlier he wouldn’t have even thought to tell us about his birthday, but he’d been excited and planned an evening to celebrate. He was doing so unbelievably well. I was ridiculously proud of him and how wonderful he’d been about everyone knowing. He was more interested in the news about Louis and Libby than anything else. “He’s forced Gina to get the karaoke out,” I confirmed. “So it’s a night at The Royal Rose for us.” “Brilliant, what’re we singing?” “You’ll have to get me really bloody drunk to make me sing.” “Happy to do just that. Me, you and Libby could be Destiny’s Child.” “OR, the Bee Gees!” “That’s the spirit!” There was a knock on my door, and I had to make an educated guess that it would be Harry. All he’d said was to keep my day free, and I imagined it would be a day in bed before a night in the pub. It sounded perfect to me. “Okay, I gotta go! I’ll see you tonight though.” “See you to-Night Fever.” She blurted, sounding rather proud of herself. “Also, by the way, I’m very loving but feisty in the bedroom, in case you wanted to know.” “I didn’t, but thank you.” “Can you confirm if I’m right about what you’re like in bed? How deep is your love, Alfie?” “Goodbye, Chloe!” As soon as I’d hung up I leapt to my feet, scuttling over to the door, eager to see Harry again. It had been less than 12 hours since I’d last seen him, but after a night sleeping in our own beds it somehow felt like a lifetime. I’d been up early that morning to get some basics done in the shop with Louis since we weren’t opening that day, and I’d made the decision not to stay at Harry’s the night before, a decision I regretted rather quickly. I swung the door open, practically jumping with glee over the sight of him, about to grab his face and kiss the life out of him, but he didn’t give me the chance. He snaked around my side, standing behind me and putting his hands over my eyes, holding his body close to mine. “Harry,” I cried. “What’re you doing?” “Clearly, it’s a surprise.” He leaned to my ear, trying to waddle the two of us forward and lead me out the door and down the stairs. “Wait, what? It’s your birthday. Surely I should be the one surprising you.” I tripped almost instantly. “Shit, fuck, couldn’t this have waited until after we’d tackled the stairs?” “That’s not as fun. Less risky.” “That sounds so much better to me.” “Careful, there’s a step there!” I was appalled by how unfamiliar I seemed with my own home, Harry having to yank me back to him so I didn’t go tumbling down the flight of stairs leading outside. I could feel his body jittering as he held me back, the two of us already in fits of laughter at my inexcusably weak attempt to manage even the first step. He kept my eyes covered as he rested his head against the side of mine, and we were already tittering so much I didn’t think I’d ever be able to manage the rest of the stairs. “Guide me better!” I howled. “They’re fucking steps, they’re not that complicated!” “Fine, fuck you, I’m going.” I took a steady stride, gradually beginning to move downwards. “Happy Birthday, by the way.” “Thank you, boss.” “I’m scared. Should I be scared?” “It’s a good surprise, I promise.” “Still scared.” “Don’t be.” We reached the bottom of the stairs much quicker than I’d been expecting, trying to take another step down which wasn’t even there, which made me stumble forward again, the whole endeavour much messier than it should have been. We took a few steps outdoors before Harry halted, bringing us to a standstill. My stomach was in knots. “Ready?” He asked quietly. I shook my head, but that didn’t stop him from lifting his hands off my eyes. I burst into tears the second he had. Because standing right in front of me, on the gravel beside my car, was my dad, my mum, and a rather timid looking nurse stood behind them, watching us with a smile on her face. He’d gotten them back to Rosebury. After almost five long years, he’d gotten them to come home. Both of them. I slapped my hands against my mouth, gripping my eyes shut, and I just stood there in floods of tears. I didn’t have the capacity to do anything else, all I could do was weep. It was so absurd and overwhelming that I couldn’t make sense of it, the fact they were both actually there, stood right ahead of me. It had been so many years, and for so many months I’d been trying to encourage my father to come back, if only for a day or two, but the fact it was actually happening was preposterously peculiar. My dad took a few steps forward and took me into his arms, telling me it was okay, to stop being silly and stop crying, how happy he was to be back, to see me again. I was floored.

“He paid for all of it.” My dad whispered across the table, nodding towards Harry, who was stood ordering our food at the counter in PJ’s. “The nurse, our journey here. He got us a medical van, just in case anything goes wrong. He paid for all of it.” I looked over my shoulder, watching Harry chatting freely with the owner Paula and the nurse, who I’d learnt was called Helen and wanted to give us as much alone time for the day as she possibly could whilst always being around to help my mother if needs be. “How did…” I turned back to face my parents. “Why did… When did he sort this?” “He got in touch with me last week. Had it all planned out, made it as easy as it possibly could be. Kinda made it impossible to say no. Not that I wanted to but, it’s just always seemed so out of reach before.” I didn’t quite know what to say or think or even feel. I couldn’t fathom him going to all that effort on my behalf, the amount of money he would have spent, the care, the kindness. All of it. My eyes flicked to the side to gage my mother, and it must have been so long since she was last out of that home, and I totally understood why my dad had been so worried about it, but even though she was quiet and a little vacant, I actually believed it would have been doing her so much good, even if we couldn’t see it. I didn’t want to cry, but it was very likely I’d spend the majority of our day in tears. Even the fact that Harry was right there with us, that we were out in public as a unit with him included, that meant so much to me. He would have been well aware that the chances of us running into someone were high, but he didn’t seem to care. I dropped my head, struggling to keep my emotions in check. “I can’t believe he’s done all this.” I murmured. “I never asked him to do any of it, I… I just can’t believe he’d do this for me.” “That’s what real love looks like. You’ll have to get used to that.” Even hearing the word love made my stomach coil. The pace of mine and Harry’s companionship had been irregular and unpredictable, and though things had begun in October and intensified in January, love still somehow felt like a big word, a big feeling, something I somehow feared. I’d had one serious relationship in my life, one single experience of that form of love, and it had been a destructive example of it. Love had broken my confidence and shattered my trust. Love had made me doubt my own worth and shun my true emotions, the damage darting to destruct so many different aspects of my life and myself. Love had been an enemy disguised as a friend. But the bottom line was that even at his very best, Sam would have never done what Harry had done for me that day. It wasn’t in his nature. He wouldn’t have even considered it. I did not want to fear love because one person had shown me such a poor example of it. “Sam would’ve never done this for me, would he?” I voiced my thoughts. “I doubt it.” “Not that this… Not that it should be expected, because this is… But y’know what I mean.” “One day Sam will meet someone and all that stuff will come really naturally to him.” My dad said. “I just think that you two weren’t right for each other. I hope you leaving him was the wakeup call he needed, and the next person he’s with… he’ll do better. You’ve just got to be with the right person.” I nodded, hoping he was right, because I had seen a lot of good in Sam, and in ways I would always care for him. “Once you find that, it changes you.” He went on. “Once you find that, you become the best version of yourself. It’s a wonderful thing.” He moved to take hold of my mother’s hand, and thankfully she didn’t cower or pull away, she tightened her grip. She seemed at ease, which was a rare and lovely sight. I was startled back to life when Harry came and sat himself down next to me. “Paula said she’s gunna rustle up Rita’s favourite.” He got himself comfortable at my side. “I dunno what that is, but I trust her to know.” “D’ya hear that, Ree?” My dad encouraged. “You’re gunna get your favourite, meat and potato pie.” “That’s nice.” Her reply was low, but any reply at all was good. “We used to come here every Sunday.” My dad turned to tell Harry. “She’d order the same thing every week.” “With a tea.” She added, quiet, but loud enough for us all to shut the fuck up and stare at her completely dumbfounded. It was such a small thing, such an insignificant little fact, but she’d remembered. She had remembered what she used to order every single Sunday when she’d go to PJ’s with my dad. “Holy shit.” I was mystified. “That’s right!” My dad beamed. It was so strange, how she didn’t even know who I was but she could remember something so small like that, even if it was just for a few seconds, even if it was utterly trivial. I really thought being in places that were so familiar to her was helping her recall even the tiniest things, aided by that sense of acquaintance and home. It was impossible not to smile. “I’m so happy you’re both here.” I sighed, taking Harry’s hand beneath the table. “Thank you for sorting this, Harry.” “My pleasure.” He reached to shake my father’s hand across the table. “Good to see you again. How do you feel being back?” Even on the tiny walk from my place to PJ’s, he’d bumped into three people he knew, and was greeted by more love and welcomes when we got into the café. He seemed happy enough and glad to see people, and they seemed glad to see him, but I suppose it was difficult, especially with my mum being right there. As lovely as the greetings had been, they’d also been accompanied by sad looks and awkward moments, broken smiles and sympathetic words. No one meant any harm, that much was clear, but it couldn’t have been easy. “I feel okay. Strange, but good.” He answered rather shakily and yet sure at the same time. “I’ve missed it.” “There’s something special about this place, isn’t there?” Hearing Harry say that made me smile. “Very. And the people in it.” His eyes dodged to me for a second, giving a very knowing look to the two of us. “Agreed.” Harry was holding back a smile, seeming a little bashful. I made my eyes go wide, glaring, not wanting Robert Hunter to act like a proper dad and start interrogating him and scaring him off. Harry didn’t know that I’d confirmed to my dad that there was something happening between us, but I thought with how our day was going and what he’d done for me, Harry would’ve been pretty foolish to think my dad wouldn’t be aware of it. “Just look after her.” He simply said. “I will.” Harry nodded assertively. My whole body was likely beaming a certain blushed colour that I could not control, dropping my head and cooing down towards the table. Harry could say the most simple things and make me experience feelings I never had before. “Alright, well I’m gunna leave you to it.” He sighed, squeezing my hand and then letting go. “What?” My dad gawped. “I know this is a family thing, I don’t wanna intrude.” He raised to his feet. “You’re not intruding at all, it’s the complete opposite.” Robert was stern. “Sit yourself back down. This is only happening because of you, so I think you should stay.” I looked up to him, kind of expecting to see him looking like he’d actually wanted to get away, that he'd have felt a little strange and out of place if he’d stayed, which I would have totally understood. But if anything, he looked flattered. “Are you sure?” “Absolutely.” Smiling and thanking him, Harry sat himself back down, taking hold of my hand again as soon as he could. I couldn’t wipe the smile off my face.

We trudged through the tall grass, the setting sun making everything golden, the evening warm and blissful. It was perfectly serene, birds singing lullabies from their branches, butterflies dancing over flowers, my heart feeling far removed from everything that could ever possibly harm it. Totally peaceful. “Where’re we going?” Harry asked from behind me. “To where my dad proposed to my mum.” I turned and whispered back to him. “I think he’s hoping she’ll remember it.” We were only a short drive out of Rosebury, but from that spot it felt like there was no sign of society for miles and miles, where Mother Nature still reigned supreme, her beauty untouched and untroubled. My dad had hold of my mum’s hand, carefully leading her towards the very spot he’d asked her to marry him when they were only nineteen years old. He was so affectionate, so ridiculously in love with her even still, despite everything. I worried for him all the time, imagining his life both with and without her. There didn’t seem to be a possible outcome where he would be as happy as he deserved to be. My heart broke for him. I stopped when we reached the end of the taller grass, my dad leading my mum down the small hill in front of us to take her out into the open where he’d asked her to marry him. Harry stood by my side, the two of us giving them their space. “This is beautiful.” Harry admired. “He’s really romantic.” I liked seeing them wander off hand in hand like that, because it was almost as though for a few brief moments of my life, I could forget completely the fact that she didn’t fully know who he was or understand what was happening. Seeing them then, the years rewound before my eyes, taking me back to simpler times when their love was untested and her bookshelf was heaving with books of all colours and sizes, romance novels filling each shelf, depicting their love and a life of happiness they had once built side by side. It was the first time in years where the image of them was strong enough to shield that disease, my eyes only able to see two people in love and nothing else. I sat myself down, keeping my eyes on them every second as I tucked my knees upwards, heart and body warm. Harry sat down beside me, the two of us quietly observing them for quite some time, uninterrupted, peaceful. Even when he did eventually speak, he was gentle. “It’s like they never left.” I turned my head to look over his profile, the way he smiled looking out across the fields and hills before us. “Why did you do this for me?” I asked him. “Why wouldn’t I?” He looked back at me. “I care about you. I wanted to make you happy.” “You make me happy anyway. This is… It’s on another level, is all I’m saying.” “So are you.” He shrugged, casually creating pink blotches in my cheeks. He was treating it like the most ordinary thing, like it was the obvious thing to do and he couldn’t really understand why I was so bewildered by it. I was blushing like mad. “It’s what you deserve, and if I can give that to you, I will. And, y’know… your dad deserves this too. He needed to come back here. It was a bit of a no-brainer.” I reached to take his hand, joining our fingers together and holding his hand as tightly as I dared since he still had his bandages on to cover his cuts, which I hoped were well on their way to healing. I leaned his way, kissing his cheek briefly. “I’m beyond grateful. Thank you.” I spoke against his skin, his dimple appearing beside my lips. “You’re welcome.” “I feel really bad that it’s your birthday and it’s like… It’s like the whole day has revolved around me. I haven’t even given you your present yet.” “You got me a present?” “Of course I got you a present.” I chuckled. “You think I’m not gunna get you a present? Louis’ got you one too!” “What the fuck!” “You should not be this surprised!” “I expected a few pints, but actual presents?” He whelped before he seemed to calm, bewildered as he spoke. “Shit. It’s been a long fucking time.” He was so sweet, shaking his head like he couldn’t believe his luck. Buying for him had been much more difficult than I’d anticipated. He was such a diverse, illusive being that every typical option I’d thought of fell completely flat. Eventually, I’d settled on an acoustic guitar, one I’d seen months earlier than had made me think of him for reasons I didn’t understand. He was clearly a creative person with multiple talents, and though I knew he already owned a guitar, he’d spoken to me about how it was a hobby he’d regretfully overlooked for quite some time. Since he was leaving one of his passions behind, I thought he might like to remind himself of something else he loved doing, something that wasn’t as harmful, that didn’t nourish the demons within him; they needed starving of the misery he had fed them for too long. “I’m sure hearing everyone on karaoke will be enough of a gift in itself.” I leered. “That’s exactly what I was thinking.” I had been excited about our day anyway, but with what he’d planned he’d made a good day near perfect. I felt like I wanted to thank him forever. “Seriously, I’m beyond grateful for today, Harry. Thank you.” “Again, you’re welcome.” He chuckled. “You don’t have to keep saying it.” ”Sorry if you feel like you’ve kinda wasted your day.” After spending the late morning and early afternoon in PJ’s, we had spent the rest of our day slowly walking her around town, taking my mum to all her favourite spots and even visiting the house where we used to live as a family. It definitely wasn’t the most riveting of days, as much as I’d loved it. “I don’t, at all. It’s been really nice. Better than how I’ve spent my birthday for the last few years anyway.” I took a moment, shifting uncomfortably on my spot as I thought about approaching the topic I’d been contemplating and stressing over for weeks. I wanted to share it with him, not in the hope of reaching a definite outcome, but me and Harry were doing so well with being open and honest with what we were feeling and thinking, I felt I owed it to us more than anything. I wanted to try and gage how he was feeling about the topic of people knowing about the two of us without diving right into; I wanted to simply test the waters and gather whether he thought we would sink or swim. It was a difficult subject to breach because he’d almost been forced to be much more open that he was accustom to in recent weeks and months, and though that had been a good thing in the grand scheme of things, I understood it must have been overwhelming for him. I didn’t want to pile everything on at once and taint the incredible process he had made. “Were... Were you nervous about bumping into someone today?” I asked shyly. “Mm.” He nodded, smiling as he turned his head to face me. “Were you?” “Yeah.” I admitted. “Kinda.” “Thankfully we got through the day without any of that lot witnessing.” He sniggered. “We’d have never heard the bloody end of it.” “So you’re… You’re not ready for people to know then? About us?” He whipped his head to look at me, likely picking up on the tone of my voice and the suggestion within it. He took a few seconds, the very smallest smile on his lips as he looked over my face, sighing deliberately. I was impressed by the fact he hadn’t run, that he was still sat there with me seeming to actually fully contemplate what I was saying rather than getting defensive and immediately shunning it. Somehow, that was good enough for me. Every day, I could see us progressing, and that was enough. “Sorry.” He said, knowing I’d already figured out his answer. “S’okay. I get it. I just wanted to know where you’re at, that’s all.” “I’m not quite there yet.” I nodded, completely understanding of why he felt that way. Maybe we weren’t ready. Maybe there was already more than enough going on in our lives and between the two of us that we didn’t need anything else from the outside burrowing its way inwards. The thought of everyone knowing was intimidating, I could admit that. I suppose I’d just gotten carried away with how exciting I found it too. I was happy to go at his pace, as long as I knew we were moving forward. I shuffled myself a little closer to him, Harry letting go of my hand so he could wrap his arm around me, tuck me into his side carefully, kiss at the top of my head. I could tell it was his way of comforting me, letting me know that it wasn’t to do with me but more to do with him and how he felt. I couldn’t have asked for much more than that. I looked ahead, seeing my mum and dad picking flowers together, crouched down over a certain patch as he plucked some from their place and handed them over to her. I wiped away my tears quickly. “I dunno what I expected when I moved here,” As Harry spoke, his voice seemed to intertwine with the nature around him, his chords a hidden vein that could bury beneath the soil and create new life. “But it definitely wasn’t this.” I lay my head on his shoulder, not even needing to question him or wonder whether that was a good thing or not, because I knew it was. “I’m so glad you’re here.” I whispered. “I kinda hate thinking about my life without you now. It doesn’t seem right.” Within a second of me saying that, he’d twisted his head to thrust his lips together with mine, breathing me in, a cold wind playing around us and through our hair as he grabbed hold of my face, tongue teasing mine. He was intense, groaning as his mouth moved, beautifully passionate. I felt weak beneath his touch. He was captivating, in everything he said and everything he did, every touch strong enough in its tenderness to weaken me indefinitely. How well I knew his touch and how versed he was with mine made every kiss categorically remarkable, almost intimidatingly so. But that kiss was something beyond anything we’d shared before. I was breathless by the time he stopped kissing me, his lips still close enough to brush my own ever so slightly, fingertips pushing against my jaw to keep me close. I opened my eyes, saw that he was already looking deep into mine, wetting his lips. I felt like I wasn’t breathing. “ALFIE!” I heard my dad call for me from across the field, which may have been the only thing that could make me tear my eyes from Harry’s. “I think we need to get her back. She’s getting upset, she’s confused.” I nodded, my stomach still sinking and my body still motionless, but Harry jumped to his feet immediately, rushing over to lend a helping hand. I was frozen.

“HOLD THE LINE!” Lin was yelling rather than singing. “LOVE ISN’T ALWAYS ON TIME!” It was painful, literally painful. I was loving every second and it was funny as hell, but listening to him squawking like that was genuinely doing bad things to my delicate little ears. The remaining five of us were all leaning our backs against the bar, cringing. “Oh god, it’s even worse than usual.” Louis snorted. “The fact he has no shame is so attractive.” Niall was biting his lip, already one too many drinks down. Chloe was already chatting to the bloke who was in charge of the karaoke machine for the evening, having a deep discussion about which Bee Gees song we should try to take on after realising Stayin’ Alive probably wasn’t the easiest one to tackle, but likely the funniest. Libby and I were trying to down our drinks in order to be drunk enough to actually get up and sing, but it didn’t seem to be working. Chloe had zero qualms about it. “Are you gunna take on Islands in the Stream again?” I asked Harry, nudging his hip with mine. “I suggested I Got You Babe as a joke, and Niall’s already requested it.” “You should be aware that there are no jokes when it comes to Niall and karaoke, Harry.” “That’s really a lesson I need to learn.” He sniggered. Thankfully, we’d managed to calm my mother down earlier before things had gotten completely out of hand. We’d walked her back out of the field and taken her straight over to the van, though thankfully she hadn’t needed any medical assistance, she’s merely needed to calm down and realign her mind once more, as much as she could. They’d left not long afterwards, the farewell drawn out and bittersweet, but I knew it would have made a world of difference when it came to my dad and his attitude towards spending time in Rosebury. We’d gotten through the day with barely a single issue and I could tell that something had switched in his mind. After a brief trip home with Harry by my side, gifting him his guitar and taking him to bed, our evening in the pub had snuck up on us rather quickly and was going exactly as expected. If only or a while. Just as Lin was taking his bow, the song finally coming to a triumphant end, the door swung open and Sam and Tom welcomed themselves into The Royal Rose. Sam had been rather good at hiding himself away since the night where Harry had knocked him to the ground with one foul punch over three months earlier, meaning that most of the group hadn’t seen him since finding out exactly why it was that Harry had gone after him the way he had. I shuffled uncomfortably on my spot as they both approached, looking far too smug for my liking. “M’going outside.” Harry grunted, rolling his shoulders and pushing away from the bar, ready to take himself away from the situation. “Harry, it’s your birthday, you don’t have to-” “Fancy seeing you lot here.” Sam’s voice was as smarmy as ever. “Don’t leave on my behalf, mate.” “I’m not your mate.” Harry stopped and answered, back rigid, tone vapid. Sam was just that bit shorter than Harry, positioning himself right in front of him and looking up with a smug smile on his face. I could see Harry clenching his fists, doing what he could to contain his rage. Lin, however, wasn’t feeling quite as forgiving. “OI!” He yelled, rushing to us from the front of the room. “Sam, get the fuck out.” “I just want a pint, I didn’t even know you lot were here. You don’t own the fucking pub, Lincoln.” Lin seemed unfazed, getting right up in Sam’s face, snarling as he spoke. “But you know I say one word to Gina about what you did to Alfie and you’re barred for life, so I’d take the highroad and leave of your own accord before I make that happen.” “Scary.” He sniggered sarcastically. “Oh fuck this.” Niall tut. “Harry, shut him up and knock him out again, would ya?” I felt like the reason Sam was so defensive and vulgar was no longer anything to do with me and more in an attempt to feel better about himself, try to prove how unfazed he was about the fight he and Harry had. He had no clue that he continued to make himself look worse and worse with every interaction they shared. “Sam, drop it.” Chloe piped up rather shyly. “It’s Harry’s birthday, we’re just trying to have a nice night, can’t you leave it? Go to a different pub.” “It’s embarrassing.” Lin sounded just as rude as Sam had, it was brilliant. “Look, I said I’m sorry,” He fought. “I’ve spoken with Alfie, it’s nowt to do with any of you. I’m not here for trouble, I’m here to have a drink, so if you could all move out of my fucking way and let me get to the bar.” “Go somewhere else.” Harry demanded. “Why should I?” “Sam, fuck off.” Niall groaned, tired of it. He seemed to ignore everyone, looking back up to Harry and it was clear he wanted to make him snap. He wanted a rise out of him. I slyly took Harry’s hand, trying to pull him back, closer to me. Grinning, Sam quickly dropped his eyes to look at me. “We’re alright aren’t we, Alfie?” He asked. “Don’t even bother speaking to her.” Harry stepped so he was right in front me, blocking Sam from me in any way he could. He was doing so well. He could have lost his head as soon as Sam walked through the door, but he hadn’t. He’d stayed as calm as he could, which I appreciated, but then I’d catch another glimpse of the look on Sam’s face and I’d want to punch him myself. Sam took a step closer, Harry not moving an inch. “I dunno whose fucking hero you’re trying to be, but you’re not hers.” Sam snarled, nodding his head towards me. “You might as well stop trying to be.” “I’m not trying anything.” Harry snarled. “Looks like you are to me.” “Why? Because I wanna protect her from you?” “Like you’re any better. I can see right through you-” “Don’t push me.” Harry shook his head. “Say another fucking word.” It wasn’t the first time Sam had suggested that he could see Harry’s feelings for me, and though it didn’t help that every interaction they’d had had been hostile and revolved around me, it seemed that maybe he could see through him in some ways. But he was claiming to see something else in him too, a violence and an aggression, something that had affected Harry’s life and was the source of too many painful memories. And even though he had worked so hard to move on and find alternative ways to deal with his emotions, his rage and his sorrow in particular, I knew what Sam was saying would be bothering him, evoking emotions and times that Harry wanted to keep in the past. “Sam, you’ve got ten fucking seconds.” Lin finalised. “Fine, I’m going, chill out.” He smirked. “Enjoy your nights. Careful around him, Alfie.” Lin managed to stand in the way before I’d even noticed that Harry had lost his patience, trying to jump at Sam and Tom and the two of them sauntered out of the pub, sniggering at him as they went. I hated that they’d managed to make him snap at the very last second, how Lin was once again having to hold him back. “Don’t, mate, he’s not worth it!” Lin called. “He’s trying to get to you.” I still had hold of Harry’s hand. “Ignore him.” He glared at Sam until well after he’d left, nostrils flaring as he kept his eyes on the door, somewhere between wanting to calm down and wanting to follow him outside. His chest was rising and falling, every inch of him tense. “I need air.” He huffed, pulling away from me and heading to the back door. “No, Harry-” I tried. “I’m going out back. Just five minutes, I need to clear my head.” We all watched him go, rolling his shoulders and darting down the hallway where he’d kissed me during the first minute of the year to give himself the space he desired. Sam was trying to get in his head and it was working. He was saying all the right things and really riling him up, and he didn’t need to feel that way. I could see that Harry often saw the worst of himself, saw the negatives and found a way to blame himself for things that were out of his control, for habits and characteristics he had developed over the years. The things Sam had been saying had gotten to him so much because Harry managed to link them to things he’d done, ways he’d felt, behaviours he had tried to change, disregarding the ways he had successfully bettered himself. But I saw the best in Harry. I knew he had changed. I knew he had a good heart. “I think there’s a reason he runs those classes, y’know.” Chloe sighed once he’d slammed the door shut. “I think someone did something to someone he loves, that’s why he gets so… wound up.” “Fuck Sam.” Lin groaned, rubbing the top of my arm encouragingly. “Let’s ignore that. Who wants a drink? I’m not having him ruin our night.” Niall scuttled around to my side as everyone tried to snap out of the moment and return to normal. He leaned closer to me, whispered something in my ear that made my stomach drop. “I think Harry likes you, Alf.” “What?” “C’mon. You see how he gets about you?” “He’s just like that.” I lied as convincingly as I could. “He likes you. I know I’m right. I called Louis and Libby years ago.” “This time, you’re wrong.” “Nice opinion, but I am in fact right, and my advice to you would be to hop right on that dick as soon as possible.” I was glad he’d said something funny so I could laugh it off, shake my head and end the conversation there. But he had this knowing little look on his face, clearly very pleased with himself and exceptionally confident in his prediction, with good reason. As he swaggered away from me, I rolled my eyes before they landed right on the door Harry had just walked out of, my mood dropping quickly. As well as the fact I knew Harry wanted to be on his own, I figured Niall’s speculation was a good reason not to follow him outdoors to see how he was feeling, attempt to cheer him up. He wanted time alone, and I needed to give it to him no matter how agonising the wait might be. It all stemmed down to what had happened with every member of his family; his father’s suicide, the fight with his brother, how his mother had kicked him out and he’d stopped all contact with her for too long. Through every heartbreak and every mistake, Harry had found some blame within himself, misplaced or not. In the following years, he had done all he could to make his peace and be a better person, right his wrongs, but every now and then those detrimental doubts would return to haunt him. Sam being the one to say all that and even comparing the two of them, implying that I needed to worry about Harry, that was what had made him lose himself that way. After so long, I knew what his thought process would be, how he was thinking. I knew I didn’t have anything to fear, and I needed to make sure Harry knew exactly how I felt. Another couple of minutes passed by before the conversation veered back to Harry. “Go check on him.” Niall said, nodding towards the door. “I dunno…” I groaned, trying to seem like I wasn’t desperate to go and see him, even though I definitely was. “Do it. And if he tells you to fuck off, at least then you know. Better that than him hoping someone goes to see if he’s okay and no one does.” “Then you go.” I kept up the act in order to steer his suspicions away. “I’m not the one in the middle of all this.” He shrugged, and I had to accept that at least. Sighing and faking unease, I scuttled in Harry’s direction, soon cautiously opening the door and poking my head around the corner to see that he was already looking right at me like he’d been waiting for me to show up, sat on one of the splintered tables they had outside, feet resting on the bench attached to it, hands in prayer against his lips. “M’sorry.” He spoke instantly. “I dunno why I get like that.” I stepped outside, the door closing slowly behind me as I walked over to him. “You don’t have to be sorry.” I told him, nonchalant. “You get like that because he’s a prick.” I saw his smile as I stopped right in front of him, glad to see him looking so calm and composed, to see his body almost relax with every step closer I’d taken. “You handled it well.” I nodded. “Don’t let him get to you. He doesn’t know you, Harry. He’ll say anything to feel better about himself, it’s his own issue, not yours.” Although he didn’t look quite convinced, he did look as though he was happy to hear it, happy that I was there saying what I was so confidently. I wanted to lean in and kiss him, but I didn’t quite trust that Niall wasn’t behind me spying on the two of us. Harry tilted his head a little, narrowed his eyes. “You know me well, don’t you? You know how my head works.” “I like to think so.” I looked up and shrugged, smiling modestly. “It’s nice. I like it.” He lowered his hands to take hold of me, grasping his fingers around my own, his lips creating the most perfect smile. And I think that was one of the main things that managed to make him feel better that night, that maybe made him feel better in general; the thought that I knew him so well, that I knew things about him that most people didn’t, that I knew of both his good and supposedly bad qualities, and I was there holding his hand regardless, accepting him and being with him and supporting him. It was another reminder among many that nothing really mattered other than me and him, and as long as we knew how we felt, any other opinion or doubt didn’t matter. All that mattered was us.

#THIS IS A LONG ONE PHEW #happy reading #HBS32 #1dff

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peacefulwriter88 · 6 years ago

Text

Aimez-Moi, Aimez-Moi Pas | Love Me, Love Me Not

Warning: SMUT (18+), Language

A/N: No one writes about Curtis and like I get it...there’s a reason for that cranberry juice comment that floats throughout Tumblr. But I think his character is interesting and I read Le Transperceneige so I wanted to tie in both the movie and comic and give it a go in this one shot…..

Cranberry juice is not required to read ;)

Also I created the banner so please reblog if you want to use it.

He hated the train at night. Three hundred and sixty five days stuck in a narrow, metal contraption and the bed that he was laying on still felt no worse than the ground two years later, the thin cotton blanket he pulled tightly around him doing nothing for the subtle breeze that would occasionally blow by.

He tried to tune out the coughing, the sour smell of sweaty human bodies that hadn’t left the roof of his nose since he had boarded, the feel of another body just an arms reach away from where he slept.

Instead, he focuses on you. Tries to remember the sweetness of your voice, the curve of your smile, the glint in your eyes. Tries to remember the first time he saw you.

“Global warming is an inevitable consequence of humans. The result and combination of overpopulation and a negligence to find solutions for all the toxic energy we’ve pumped into our air since the start of the industrial revolution.

There will be a moment, soon, in our current history in which famine will strike us, the heat causing fresh water to be as rare as gold. If we do nothing about the poor way we are treating our planet, humans will be the cause of our own extinction.”

You had been wearing plum that day. A tight plum dress that had shaped itself onto your body, hugging your curves and shifting your cleavage up. He remembered the way his stomach had dropped as he watched you move across the stage, the material flowing after you as the microphone you held in your hand became an afterthought, flashes of your presentation flashing behind you.

“Now we are trying to find solutions. The short term answer that’s been proposed is cutting world population growth for the next 80 years by 45%; a solution that would have served us best in the 1960s and honestly is too late now. Then there’s CW-7….”

You pause, frowning before you debate your next words to the audience,

“I’ve been a part of a special team of scientist to create an alternative that can, hypothetically, cool our ozone. It’s been my life for six years but as we come close to a final version I feel adverse. The universe - earth - took billions upon billions of years to create the perfect atmosphere to sustain life and now us - mere humans far inferior to our planet thinks we can find some quick solution to fix it?”

There’s low murmuring from the audience, students agreeing and disagreeing as a slide stops at a photo of earth from space.

“Some scientists want to inject CW-7 into the ozone - the long term quick fix. I'm sure you’ve heard the deadlines. I’m telling you now as one of the owners of that product that it’s a cheap man's alternative. The tests of this solution haven’t proven to be successful, 60% success rate of cooling the dying thin film.

That mean a forty percent chance of freezing the planet is at stake. And the consequence will be shifting our planet into a second Ice Age. Is that worth the risk - 60% success? In any other part of our society it would qualify as barely passing but in this instance our world leaders want to compromise. There’s a need for more time that can’t be given and it’s made me wonder.

If I must choose my demise, must it be ice due to bureaucracy or famine due to neglect?”

Your eyes had locked on his upon the last statement, orbs that burned into his own. You had hesitated, cleared your throat before finishing your speech, the auditorium erupting in applause. There had always been some deeper connection between the both of you - even from the start when you were both strangers.

You were some young prodigy - an environmentalist that had been working with NASA and other scientist to address the global warming crisis since you were a teenager. Except as your team neared a solution you had decided to break off, to commit to teaching at Cambridge part time while continuing your research.

This lecture was for one of your classes, yet the room was packed like it was a hosted campus event. Faculty and student alike had been buzzing about you, about your genius and ingenuity and he had been curious.

He had wanted to hear you, to see what you were truly about and to learn more about this crises that was burdening all humans on the planet. He had been following the crises for years and it felt like a miss to not hear someone who could provide a strong lens to this international crisis.

He had understood a lot that day. He rolls on his back, draping his arms behind his back, staring at the metal ceiling.

You were compelling, exciting, refreshing. He liked the way you spoke, the energy and fire. It inspired him to start cycling to work, be more mindful of how he was wasting and recycling. He had told you as much when he ran into you a month later.

You weren’t paying any attention. Your brown pencil skirt and ivory blouse made you stand out as an academic on campus, the brown and white leather Mary Janes and black work bag you had thrown over your shoulder completing your ensemble. You were looking down at your phone in one hand, frowning with a cup of coffee in the other as he looked up just in time to run smack dab into you.

“Oh shit!” Your voice is low and feminine as you take in the milky coffee that’s cooling on your arm, trickled on your skirt and blouse.

“Just my luck.” You mutter, before looking up and sighing seeing where the remaining coffee had landed. All over his dark navy shirt, his black slacks.

“Oh fuck! I’m so sorry. I should’ve been paying more attention.” Your eyes had lifted to his, a faint spark of familiarity flickering through though you don’t act on it as he assures,

“No, no - I was trying to pick out inserts from Niccolo Machiavelli and wasn’t paying attention at all. I’m sorry - let me grab you a cup of coffee.”

“I’ve ruined your shirt, your textbook…”

He chuckles, shaking the pages of the worn text.

“It’ll survive coffee. It’s survived far worse,” he hesitates, takes you in before saying, “That coffee cart by the library makes a mean Americano. One of the three decent baristas that work there just started his shift and I was headed there before I bumped into you if you’re interested.”

You lift an eyebrow, turning behind you to drink the cart in before looking back at him,

“Okay.”

You both walk over to the cart in silence. He doesn’t want to admit to himself how nervous he is, how he’s been trying to find a way to come up to you and say hi ever since he’s watched your lecture and how he’s chickened out every time. You both stand in line, drinking in the autumn air, the way the leaves dance against the slow barren branches before you ask,

“How long have you taught on campus?”

He looks up from the book pages he’s shaking out and quirks his eyebrows over the glasses he’s wearing.

“What makes you think I’m a professor.”

You snort, laughter following as you cross your arms,

“The tailored pants, nice shirt stuffed in said pants. Oxford shoes. The tote bag, your hair and beard are nicely trimmed, fingers manicured. The glasses, the worn text with your commentary. You smell of it from miles away.”

His eyes twinkle, a resigned sigh on his lips as he nods.

“That’s fair. Three years. I’m Curtis. Curtis Proloff. I’m a professor of Renaissance Literature and History.”

You smile, extending your hand out,

“Y/N Belleau. Environmentalist and temporary professor I suppose while the world council of idiots figure out a formidable punishment for me for publicly voicing my distrust with our ‘solution’. But, you already knew that.”

“I did?” He asks, eyes scrunching together and you smile as you both move forward in line.

“Of course. Weren’t you the cute professor at my lecture a month back?”

Your eyes always had this way about them when you were certain of something, a silent air of confidence that he’d sacrifice any part of himself to be able to have now.

The sound of metal on metal, slicing through ice jolts him back to the present. He had bought you coffee and you had sat for hours talking about nothing. You were curious on what had intrigued him to follow his pursuits and passion for literature, to work at Cambridge and he wanted to know how you had gotten to be a part of Project Grenier - the scientific solution that would save the world.

There’s someone muttering in their sleep, a night terror and it triggers an infant that’s lying somewhere in the dark to cry, the soft sound of a mother's cajoling voice desperately shushing them to quiet. Curtis tries to ignore the aching in his stomach - the knowledge that hunger was trying to beat all other senses as he tightens his eyes, thinks back to you.

“Shhhhhh.”

Your voice can barely be heard over the faint chatter in the hallway, your hands dancing down his chest, hooking his briefs before your pulling them down along with his suit pants.

You were both at a dinner in Vienna, a conference that was being hosted by Wilfred the billionaire to gather all of the great minds in the world to talk about the global warming crisis. It had been two years since he had run into you, two years since that autumn day in the park. Now, a sparkly small diamond twinkled on your left ring finger, your eyes burning into him as your tongue slides languidly up the thick vein of his cock.

“Gooooohhhhhddd, Y/N just like that.”

You hum, that knowing glint of mischief in your eyes as your mouth envelopes over the head of his cock, causing him to gasp out lowly as his hands find your head, guiding you deeper. Your tongue flickers over the tip of his head and he moans in pleasure, the syllables of your name falling out of his mouth sloppily.

His hips natural grind into you, causing you to gag and he moans louder, hands threading into the deep braided coils of your hair as your hands rest lazily behind his thighs.

There’s loud laughter that erupts out the door and you both pause, taken away from the moment as your eyes dart to the door. The footsteps near, pause, before they continue their trip down the hallway - laughter following them. You pull away from him with a pop, spit dribbling down to your chin, his erect cock gleaming in the light from your saliva as you look up at him, eyes highlighted by the charcoal liner you had painted on as you smile up at him wickedly, your red lipstick smudged.

He wished he could frame the way you looked at him.

“That was close.” He whispers and you giggle as you move up him, like a lioness, the thick beaded material of your gold and black dress silently shifting with the movement.

“Just a little bit.” You agree, looking at him carefully. He drinks you in, the low dip of your neckline highlighting your cleavage, the disarray of your hair - your lipstick.

“I’ve smudged your lipstick.” He whispers, his fingers ghosting over your lips and you smile.

“I don’t mind.”

It’s a beat before his lips are on yours, hands gripping your waist and pushing you back until you hit the bookcase as he tries to lift you, getting you a few feet off the ground before he drops you and you giggle in his mouth as he stops, pulling away.

“I’m not the kind of women you get to lift up and fuck.”

He growls, carnal and feral as he spins you, pushing you onto the lavish cherry oak desk in the room and lifting you up enough to place on the desk,

“Stop being self-deprecating. Yes you are.”

You smile underneath his lips, your hands moving up the broadness of his shoulders.

“Have I told you how much I love you today?”

You ask him and he shrugs as his lips skim down your neck, kissing the delicate flesh tenderly as he parts your legs further. His hands are slow in their ascent of your panties and he’s surprised when he finds your wearing none, greeted instead by the warm mound of your vagina.

“You have. A total of twenty times I think? Just one less than me.” his voice gets lost in your neck, vibrates against you and you moan as he skims the folds of your pussy with a finger.

“Than I love you. Now we’re square.”

You had this terrible habit of always trying to be right. He hated it. He loved it. You were aware it was a horrible aspect of your personality but you couldn’t deny it - it had been the reason you were admitted into Cambridge at 12, was the only 30 year old on a world science council to solve the global warming crisis - and it was what had captured his heart.

He shifts his hips into you, lifting his head so his cock teases your folds and you gasp as you look at him as he mumbles,

“Can’t have that. I love you more.”

You giggle before he slowly inserts himself into you, lifting you a bit as he allowed the warmth of your walls to flutter around his cock, cause him to groan as you grabbed his face, watching him carefully. You don’t say anything, allow him to shift his hips until he’s full to the brim of you. You watch each other, casting out all the outside noise of your international colleagues and focus on him.

“I never thought I’d find you. Someone I could love more than science. But I’m glad that I did. I’m not sure I completely deserve you, Curtis Proloff.”

You’re eyes have that glossy look to them, your irises darkened and soft as they watch him carefully. Your voice is low and endearing as you hold him tenderly, blinking up into him and he knows that this is hard for you - to be vulnerable like this even if it is him. And that you allowed yourself to be this vocally vulnerable because it makes him happy, captures him in a blanket of your love.

“I think you’re wrong about that Ms. Belleau. I may not know how to solve the global warming crises but I know how to love you. So, by default, I feel like I know what you do and don’t deserve.

And you, out of anyone, deserve love. And I’m honored it can be mine.”

He has to think back to who you were, of what the both of you were to each other back then instead of falling back on the memory of who you are now. Of what the world had allowed you both to become.

“Proloff.”

Your voice is low, bites into the dark and stuffy air and for a second he thinks he’s still daydreaming, that his brain hasn’t shifted back to reality. There’s an impatient sigh as you rock him again gently and his eyes shift over to yours, trying to adjust to the dark and dim lighting.

You’re wearing ragged khaki pants, a tank top that’s covered by a thin sweater, a jacket. They hang off of you loosely - the curves that would have molded the material now gone to undernourishment. You hair is braided back into a ponytail that you tucked into a bun on top of your head as you move into his small bunker he called a bed.

The silver glint of your ring peaks from your bosom, a flash of metal that you push back into your shirt as you saw lowly,

“Proloff - I need you.”

“I need you to understand,” you say as you move out of the bathroom, your hands rubbing lotion together as you find your place on your side of the bed.

“Alec Wilfred Forrester also thinks that CW-4 is going to fail and as a result, catastrophically knock humans into extinction. He’s…..created this train to host humanity. A set of three that will carry the weight of the world until the sun thaws out earth again.”

“A train?” Curtis looks over at you skeptically, looking at you over the bridge of his glasses as you grab your notebook and sigh. You’re cotton negligee allows your bosom to be revealed, causing his brain to become temporarily distracted as you begin scribbling on your notebook, flickering up at the TV in your room. CNN muted, talking about a final date to shoot the drug into the ozone.

“Its fruitless to convince any leader or council member the recklessness of this choice. They fear what has been happening in the poles; how some countries are already being affected by extreme hurricanes, longer summers, even shorter winters. Wildfires and tsunamis have been on the rise - wildlife continues to increase on the extinction list.

They can’t mandate cutting the population in have….that’s reckless and quite frankly it wouldn’t solve anything. Its CW-4 or its death.”

Your voice has that distant coldness it tinges with when you’re brain is rattling through equations, formulas and solutions. It scares him the finality of the words and he wonders if you realize that you have no humane remorse for cutting the world's population in have.

Frankly, he could see you sacrificing yourself if it meant a better future for earth. Saving the planet may be the one thing that you loved more than yourself, than him.

“What about the NASA programs for colonization in space for a few humans?” he asks curiously and you shake your head,

“Obtuse. Not going to be done in time. We’d send the first group up and then wouldn’t be able to replenish their supplies five years later. Famine on earth. Death in space.”

You bite your lip,

“I know Wilfred. Met him as a child. I don’t understand why he thinks trains are the solution but he’s been building these tracks, these long complicated trains of metal and steel since I’ve known him.

I saw the Snowpiercer, his shining metal transport glory three days ago and its adequate. Could sustain humans for four decades, I’m positive. I’m skeptical about track maintenance but he’s assured me the heating systems hes created to thaw them, that they are self-sustainable in their simple maintenance as long as they are intact.

It all seems to feel right but yet…...I’m skeptical about the outcomes of it. Contained spaces of any matter can cause people to become stir crazy. We’d be limited of Vitamin D and that's never a good combination for any human.

Furthermore, how will he judge who boards, who doesn’t? Who will maintain the human line and who will perish and become slave to it. A mini secular society in a confined space while the world freezes over terrifies me. Makes me itch with fear. But……..it might be the only hope we have.

Hope for our families future.”

Your hand falls on your barely patroding stomach before you look over at him.

“What do you want to do? I can’t make this choice alone. I’m going to be your wife and we’re going to have a baby and I can’t decide alone this time .and that terrifies me. I’ve always known what to do - whether I’ve liked it or not.”

He can feel it as your voice wavers, the way you shakily put down the notebook you’ve been scrawling on. He throws his book to the side, pulls you to him, wraps his arms around you. Inhales the scent of your hair, kisses your forehead, rests his hands on top of your stomach.

“We have each other. You’re the smartest mind in the history of science and I’m….really good at getting people to listen to me.”

You laugh, looking up at him as he cups your face.

“You’re a very smart and charismatic man Curtis.”

He smiles at you, feels you relax in his arms,

“It's not ideal, the Snowpiercer but it sounds like the safest bet. I’ve been reading about all the options people are creating and they aren’t...they don’t sound like it's going to save us if CW-4 doesn’t hold which, based on the probability, doesn’t sound like it will. We can’t think about what's best for us - you’re right. It's not just us anymore….soon it's going to be three of us.

We have to think about what's best for our family.”

“You’re thinking about pushing to the front aren’t you?”

His voice is low, can barely be heard over the low hum of the train and you nod as you fall back into the tight space of his bed. Your fingers thread together over the flatness of your stomach, the remnants of your pregnancy now gone, replaced by the evidence of your hunger as you look over at him.

“This isn’t sustainable. Being back here. It's not right. I know that I made the choice when we boarded because I couldn’t live with myself if I was separated from you. From people like you.”

You don’t say the empty words of how you loved him, how you were insistent when they tore you both away from each other that you had to be with him.

He had been your demise.

If you had stayed in the front you would be happier. Sad maybe, but overall happier. Your son would be…..

He pushes the thought away.

“Humanity needs a chance after the world warms. It needs to be able to function and operate and …… that’s not going to happen if they keep us seperated. Sustain this class system.”

You turn your eyes toward the darkness of the bunkers, the warm sour bodies and he nods, sitting up.

“Pushing forward isn’t going to be easy. Not after the first two times. Is your group aware of that?”

“We know,” you counter, pulling the necklace with your diamond ring out. Tinkering with the useless sparkly stone. He liked to believe that you kept it because somewhere deep down you still loved him.

He hoped.

“But we have to risk it Proloff. I can’t do this anymore. I can’t watch people lose parts of themselves because of simple humanly functions like hunger. This is no better than functioning in a world of famine.”

There’s a thick, wet tear that boils to the surface of your left eye that lingers, before it decides to give into gravity and fall slowly down your dirty cheek. He wants to lean over and brush it away, wants to cup your face and press his lips on top of yours and tell you it's going to be alright.

“You have a voice here Proloff. You can convince the others who are hesitant. Who don’t want to be involved. I know what you and Gilliam talk about in the late of night, when the lights extinguish and we’re all left with our thoughts. You and him have been whispering what my group have been whispering in the night.

They’d listen to you.”

“They’d listen to you.” he counters and you shake your head, smile to yourself.

“I was supposed to be in the front. They respect my decision; they empathize with my loss. Our loss. They can’t trust me, not after all that we’re subjugated to. Its you Proloff, not me. My time for influence has shifted.”

He sighs as he crosses his legs, sigh.

“Gilliam thinks so to. But I can’t. I can’t. Not after….”

His voice breaks and you look over at him, your hand flickers. He thinks you’ll reach over and touch him; he’s touch starved and misses the comforting feeling of your hands on top of his. You resist as you whisper,

“You’re not alone in your crime Proloff - its mine to own as much your own. And you’re not wrong for it - the brain can be a nasty mistress when its starved of its basic necessities. It was inevitable.”

“I could have said no.” his voice is dry and you sigh.

“He was a stillborn Proloff. You didn’t rip him from the arms of his mother and tear your teeth into his flesh while his heart still beat like others had done to unluckier babes.

He was a stillborn and we mourned him for five minutes before…...before the decision was made. It was inevitable. Everyone was so hungry….it made….it’s not…I was a part of it too. You weren’t alone. The crime’s as much mine as it is yours.”

You don’t look at him as you say the words, more tears falling down your face. There was only one baby left, just one and only because men sacrificed parts of themselves for food and substance.

Their son was the last to be sacrificed to the masses - a stillborn baby that you both were only able to hold and mourn for in minutes before his flesh was ripped for sustenance. The both of you crying as you ate pieces of him until there was nothing left to mourn but tears and bone.

The last time he held you before you pulled away completely.

He was no better than anyone else.

“I wish you’d call me Curtis. Just once...I’d want to hear my name come out of your mouth.”

You close your eyes, he sees another tear roll down your cheek.

“I can’t. Curtis died when I did. We’re the shells of people who we used to know,” you turn toward him, eyes brimmed red. “And they don’t deserve happiness anymore.”

That was true.

“The people back here deserved to be safe Proloff and you’re able to do that. You’ve always had this silent leadership to you,” you nudge him as you wipe your nose with your sweater, sigh.

“When we are served our meal tomorrow, do a check on the guns. I think your ammunition theory is valid….i did the math of the men who were shot over the past few rebellions. How many bullets were likely to be used. It's been five years now…...they can’t have anymore.”

You place a hand over his as you look him in the eyes.

“You lead us to the front and I’ll be behind you. Until the end. I want to look Wilfred in the eye and tell him he’s full of shit. But it has to be you.”

Your hands are warm, no longer soft but still have the same weight to them. He looks back up at you, the hope that you’ve held in your eyes before all of it went to shit dimly glistening and he squeezes you back.

“I’ll see what I can do.

Tomorrow.”

“Tomorrow.” You agree with finality.

The promise of a tomorrow can only last so long.

I dont know I kinda wanna write a part 2 but maybe not. This gets enough reblogs I might though it will be angsty af....no going up from here.

Tag List:

@Sad-af1121, @whichwayisthebeach-Sebass, @theplumbclub79, @4theluvofall, @tatathekissypatato, @baezen, @lostinthoughtsandfeelings-blog, @plumbfondler, @pegasusdragontiger, @prettybubblesintheair, @docharleythegeekqueen, @brieannakeogh, @palaiasaurus64, @emotchalla, @thejenniferincident, @shayla-markele, @supernovasandcoronas, @toastmaster94, @brandybucky, @papi-chulo-seb, @jaamesbbarnes, @paulxrudd, @badassbaker, @letsalltakeanap @papi-chulo-bucky, @moonbeambucky, @jaceyfade, @samingtonwilson, @violentlybarnes, @wehaveathor, @buckfics, @frostbitebakery, @killmongerdreams, @plussizeappreciationfics, @softlybarnes, @prettyyoungtragedy, @angryschnauzer, @221bshrlocked, @yslbucky @zohoffman @ssweet-empowerment @capsofwinchesters @tacohead13 @harleycativy @pietrotheavenger @francezka10 @papichulosebastian @obsessionsofmynerdheart @melaninmarvel @avengedqueen26 @nasteaxluvgal @winterbuttmunch @nys30 @buckyslongasshair @ohlumi @wellthirsted @geminimoonbeamx @jetaimeamore

#chris evans #snowpiercer #snowpiercer curtis #snowpiercer au #le transperceneige #chris evans fiction

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moonlightmadnessreviews · 5 years ago

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Don’t Look Now

You know what the air feels like towards the end of September? Where it’s breezy, but not enough to cool you down or whip your hair into your face? That’s what this night was like. I’d left work much later than usual, so even on this summer night, I’d already missed the sunset. There wasn’t a trace of the pinks and purples in the sky that people sit out on their porch to enjoy. Parking spots for paralegals were lined up about 10 or so rows behind that of the lawyers, meaning I had quite a walk back to my car. The parking spots sat in front of a line of thick, tall trees. They looked like bodyguards standing watch over the varying vehicles. I usually didn’t mind the walk back to my car but on this particularly cool night, I’d noticed the light closest to my spot was out. As I saw this, my eyes followed the post downward catching sight of some shattered glass. Instantly, something just didn’t feel right to me.

My pace quickened and I fumbled inside my bag searching for my keys. Reaching my old Volvo, my fingers finally felt something familiar. Just then I heard a rustling coming from the tree line. I scanned the tree line, unable to tell exactly where the sound had originated, but I could hear what sounded like footsteps, and they were growing louder. My hands were shaking and I could feel the blood pumping harder with each passing moment. I was trying to keep my breath steady and I could feel sweat beginning to bead up on my forehead. As I finally pulled my keys out, I heard the sound again but this time there was no confusion as to the source. The sound was coming from just beyond my Volvo, only a few yards in front of me. I stared into the tree line and heard a loud, phlegm filled cackle. Having been startled, my nervous hands lost their grip and dropped my keys. I bent down quickly and searched for them as I now heard the sound of something exiting the tree line.

Nerves made 3 seconds feel more like 3 hours and the sprint from behind my car to the door seem like a marathon. My heart was in my throat and I felt like I could hardly breathe as I unlocked the door. Praying my car old car would start, I jammed the key into the cylinder and turned. Nothing. Looking back I know how typical it all sounds; A young lady fearing for her life gets stuck in a car that won’t start up. But in the moment all I could do was slam my fist into the steering wheel, my eyes welling up with tears. Again and again I turned the key, growing more hysterical with each attempt. I could have tried it 100 times in all, but once I finally heard the engine turn over I almost wished it hadn’t. As my lights came on, they shone on the image of a hooded man. He had what looked to be a hammer or an axe in his hand. I could feel the screams already forming in my throat as he began approaching the car. His strides were long and calculated. His form, now free of the flood of light from my car, was a tall silhouette. The screams made their way out of my throat as he began banging on the glass and flashes of light blinded me as I tried to push my body away from the window.

I screamed until I was sure I would pass out. “The locks! Kim lock the God damn-“ I thought to myself, just as the door swung open. A gloved hand reached inside and grabbed at my wrist, squeezing hard enough for me to hear the leather creaking. My lungs could hardly take in air quickly enough and as I grew lightheaded, my scream grew weaker, dying down in volume. This meant it was just quiet enough for me to hear a familiar sound. Laughter. But this wasn’t the cackle I’d heard earlier. It was a very familiar laugh in fact. I was still seeing stars from the flashes of light, but I could hear just fine, if not better than normal due to my heightened awareness in the moment. “Happy Anniversary babe!” shouted my husband. Scott was laughing and holding back tears, unlike myself who was letting the tears flow freely at this point. My entire body felt locked up and tense in a strange combination of fear, confusion and anger. “I wish you could have seen your face! Wait, you can, but you’ll just have to wait for the Polaroids to develop!” He stopped to catch his breath, and then continued. “Kim that was so much better than I’d even imagined it would be. How did you not recognize me when the lights came on?”, he said through loud chortles.

I had been so wrapped up in the case I was assisting on that I’d completely forgotten our 2 year wedding anniversary. Through my tears I finally managed to put together a somewhat coherent string of words. “Scott how the hell?... The lights!... How long where you in the trees Scott?” This was the opportunity he’d been waiting for. He was so excited to give me the details of his plan that he stood with his feet shoulder width apart, knees bent and hands out in front of him as though he was going to pitch one of his movie ideas to a studio executive. “Okay so once you called me to say you’d be late, I figured we wouldn’t be going out to dinner. I thought I’d drive to the florist and come down to surprise you instead. I wound up parking in the client parking just in front of the building, so as I walked back to your car, I noticed the lights by the tree line and the gravel. I started trying to shoot out the closest lights with a couple of stones and then I just waited behind the trees. I couldn’t have been out here for more than… 20 minutes? I’m not sure, it may have been closer to 45 minutes but it was worth it in the end. Oh! The Polaroids are developed! Here! Take a look!”

My husband Scott was a jerk. Don’t get me wrong, I love him, but being my husband, he knew just how to get under my skin. Scott worked in special effects and had worked on a number of horror movies, as if that were a surprise. He and his brothers were raised on Romero, Carpenter, and King, whereas I was raised on Disney movies. He’d tried to get me to watch some movies with him when we’d first started dating and seeing how I reacted to each scare with an ear piercing scream, he quickly realized he could make a game out of this. It really did bring him great pleasure to see me frightened, no matter how mad I’d get at him afterwards.

It wasn’t that he couldn’t tell that these tricks didn’t amuse me, he simply didn’t care. On one occasion, he’d placed a fake head in the pantry. The material this severed head was wrapped in looked just like human skin and the blood that oozed out of the mouth sent me stumbling backwards into the wine rack. Having also spilled my coffee all over the floor, a laughing Scott cleaned up, made me pancakes and began brewing another cup of coffee. Scott would put effort into apologizing to me after each of these pranks, but he eventually grew to learn it was better keeping his distance afterwards, unless he wanted to resemble the prop head in the pantry. As mad as I could get, the apologies were simple, but appreciated. The downside was that Scott felt he could get away with this behavior, leading to worse pranks as time went on. If he’d hide in the laundry room with a creepy mask on, he’d cook me salmon for dinner. On one occasion he’d sent me a video of a puppy, along with a caption that read “Did you hear the cute little noise it made at the end? Turn the sound up!” 15 Seconds into the video, the face of a demon popped onto the screen and let out a scream nearly as loud as my own. That earned him a night on the couch, but I ended up with a brand new purse.

People say that you shouldn’t accept behavior simply because you’ve grown accustomed to it. Over time though, Scott’s behavior began to wear me down, and it was showing. I was tired of this routine, so I decided it was time to have some fun of my own. We were now nearing the end of September and going into Scott’s favorite time of year: The Halloween Season. Fox Hills was a small town, so the costume shops were already opening up. I bought some glow in the dark fangs, a white wig to cover up my big brown curls, and some prop intestines to cover with some of Scott’s homemade prop blood. I’d left everything wrapped in a white dress and stuck it under our bed. I had a leg up on Scott since every now and then I would be long gone by the time he’d wake up for work. Slowly shimmying my way out of bed, I grabbed my “Scare Kit” and crept into the garage. I made sure to unscrew the lightbulb that hung just over Scott’s pickup to help give me just enough cover, then, once my costume was on and I was sufficiently covered in fake blood, I climbed into the bed of his truck. When I finally heard Scott making his way down the hall and into the garage, I tried to be as quiet as possible. I knew that if I gave myself away, there would be no way of me getting a second chance at this.

The light switch flicked on and off 2 or 3 times and I could hear Scott’s confusion manifesting itself in the pauses between each try. With a frustrated huff, he made his way over to the old Ford. As the doors unlocked with a loud KA-THUNK, I loaded my mouth up with fake blood. The stuff tasted horrible and I grimaced as I accidentally swallowed some. The old Ford’s engine turned over and that was my cue. I slammed my hands against the glass just behind Scott’s head and let out a scream worthy of a banshee as I spewed the fake blood from my mouth. The look on his face as he saw me in his rear-view mirror was exactly what I’d dreamt of. He let out a scream I didn’t even think he was capable of and punched the horn of his pickup so hard I was surprised the airbags didn’t deploy. I’m sure I lost some of my hearing in that moment but once the horn finally died off, I couldn’t help but laugh hysterically!

I’d done it! I’d gotten him back for all those times he’d nearly made me wet myself! Once Scott realized what was going on, he couldn’t help but join in my laughter, as nervous as his sounded in comparison. “Kim I could kill you right now!” he screamed. “What goes around comes around.” I said, waving the fake intestines at him. He stepped out of the cab and grabbed my face in his hands. “I don’t think I’ve ever been more proud of you babe. Despite the heart attack I’m in the middle of, I have to admit, you did good.” My cheeks were nearly numb from how hard I was smiling when I saw a look come across Scott’s face. My smile quickly began to fade as I realized just what that look meant. “You do know this means war right?” said my husband. “With Halloween just around the corner, who knows when I could enact my revenge.” Scott’s evil grin curled up at the edges, but softened a bit when he saw the dread on my face. What had I opened myself up to? How could he possibly do any worse than what I’ve been through in the past? Seeing I was already worried, he kissed my forehead and wished me a good day as I climbed out of the truck and headed back in the house for a shower.

Surprisingly, the next few nights went by without incident. Scott was being extra sweet which only made me grow more and more paranoid. The days turned to weeks and I got more uneasy as the time passed. One night I’d come home to boxes of chocolate waiting for me and Scott laughed as he saw me check each one for bugs or some other kind of rancid trick. A few nights later he took me to the movies and when his truck suddenly broke down on him on a long dark stretch of road, it took him nearly an hour to convince me that his brother’s weren’t going to pop out of the trees with chainsaws. After that night I realized that Scott had switched up his tactics this time and was getting a kick out of seeing just how paranoid and on edge I was, so I decided to let it go and just relax.

It was Halloween night and my phone rang as I was sitting home alone on the couch.

“Hey babe, I’m sorry I’m calling you so last minute but I’m going to be stuck here on set a little later than I’d anticipated.” said Scott, his voice sounding genuinely disappointed.

“That’s fine. I get it. The food will be in the fridge so feel free to make yourself a plate whenever you get in.” I was disappointed of course, but this wasn’t the first call like this I’d gotten during our marriage. “What do you want me to do with the bottle of wine you bought for tonight though?” I asked.

“Enjoy it. I don’t know when I’ll be home so take it as a sign of my most sincere apologies. I love you Kimmy.”

“I love you, too. Just try not to wake me when you get home. Bye.” I hung up, disappointed to have movie night ruined but not disappointed enough to keep me from opening the bottle of wine. I decided I’d catch up on a few shows I had lingering on my DVR, and let all the stress from my latest case wash away with the night. Now truth be told, I wasn’t really much of a drinker. In fact, I only ever drank if Scott and I were heading out to dinner. Well into the night, I was on my third glass of Merlot and began feeling a little buzzed and more than a little tired. I’d figured I’d hop into the shower to complete my night of relaxation and then head straight to bed.

Pulling the shower curtain aside, I let the water run for a couple minutes. A nice hot shower always helped me to relax for bed and the last few drops of wine certainly helped. In our shower was a beautifully framed window made out of thick frosted glass. I always loved the way it looked on nights like this, the moonlight adding an otherworldly glow to it. Not wanting to fill the bathroom with steam, my showers were usually on the warmer side, I cracked the window open an inch or two at the top. I undressed and stepped into the tub, sure to let my feet settle as I was feeling somewhat off balance from the wine. I began to shampoo my hair and laughed to myself a bit as I closed my eyes. I had a habit of shutting them as tight as I could to avoid blinding myself, but I would often speed through working the shampoo in and rinsing it out so I could open them back up as quickly as possible. This only got worse after I’d watched “Pyscho” with Scott for the first time. It had obviously left an impression on me.

I could feel a cool breeze making its way in through the top of the window, only to be stopped dead in its tracks by the steam. The blue moonlight was shining through the window and my eyes, blurred by the running water and wine of the evening, were taking in its beauty. I continued washing off, my dark skin glowing and taking on the look of polished obsidian as the moon shone through the frosted glass. Then, ever so subtly, I noticed the light wasn’t shining through as brilliantly as it had just moments before. “It’s only a passing cloud Kim. No need to start getting yourself all spooked,” I reassured myself. “Just a big passing, autumn cloud.” But there hadn’t been any clouds in the sky just a moment ago, had there? “Just a cloud Kim. Nothing but a cloud.” I said to myself, feeling more confident this time. I smirked at the thought of myself getting all spooked over nothing.

It was the sound of rustling leaves that shattered my confidence. Rustling leaves and the sound of footsteps approaching my window. A cloud couldn’t make that sound, now could it? Hesitantly, I began to turn my head towards the frosted glass window. My head was moving so slowly, I was sure I could hear my neck creaking like an old wooden door. When my eyes finally fell upon the window, I could make out the outline of a tall man. His lanky figure was accentuated by the backlighting of the moon. He stood there like a statue, cold and stoic, with fewer than 10 feet between us. I heard the rustling again and tried to steady myself as, through my opaque shield, I could see him closing the gap between us. As statue-esque as he’d been just moments before, his strides were long and graceful now. He moved with ease and, though I could hear the crunching of leaves as he approached, he seemed to be floating.

I felt myself wanting to back away but my body simply wouldn’t let me. “Don’t move a muscle Kim. He might ignore you if you can only manage to stay still.” I said this to myself as if I wasn’t already aware that he could see me thought the frosted glass, if only in distorted shapes. The figure had made it to within a few feet of my window now and I could see it examining me through the glass, it’s head tilting in childlike curiosity. Now I was the one as still as a statue, frozen in fear. With every ounce of will I could muster, I managed to reach behind me and move the shower curtain aside. Though I was sure no man as tall as he was could make his way through the 2 inch opening at the top of the window, I would lock the door to the bathroom from the outside, just to be sure. With the curtain out of the way, the lights from the bathroom were now illuminating his features. Though distorted through the glass, I could make out stringy hair framing his face. I could hear a popping and cracking sound as its willowy chin moved from one side to another, as though adjusting its jaw. His head was tilting back and forth now and I was positive he had a better view of me that I of him. I grimaced and covered myself up.

Then I noticed the large dark circles around his eyes. My God it looked as though he hadn’t slept in ages. The man seemed to be so tired the dark circles around his eyes drooped down onto his cheeks. Could this be some bum wandering through back yards, hoping to steal some food from an unlocked house? Or could he be looking for more than just a meal? God his eyes… his eyes seemed wrong. How I wished I could just run out of here but his eyes had cemented me in place. The dark bags around them seemed to grow bigger, taking up half his face. They just seemed wrong, unnatural. Oh God. Those were his eyes. Just as his eyes had grown to cover his face, I saw the dark circles disappear as he blinked, the pale face becoming featureless only for the great big circles to reappear again and stare at me. Over the sound of the shower, the water still beating down on the porcelain, I could hear the horrible sound of him breathing. He sounded sickly, his breath shaking as he inhaled. His exhale sounded just as labored, the air whistling as it exited his lungs. I finally managed to take a few steps out of the tub when I let out a deafening scream.

I’d been startled when the figure slammed his hands against my window. “Go away!”, I screamed, this time my voice not just in my head. “Go away! My husband will be home any minute!” I was lying. “He’ll be home any minute and he carries a shotgun with him in his truck!” Another lie. I just wanted to scare him off, to get him to back away and run back into the woods or wherever it was he’d come from. I was crouched down on the floor now, hiding behind the tub. As I reached in to turn the water off, I glanced up at the hand that had slammed against the window. The hair on the back of my neck stood on end as I saw a hand nearly the size of my head pressed firmly against the window. A pale shriveled palm adorned with 3 long slim fingers was groping at the glass, almost as though it was trying to grab at it. Almost as though it was trying to grab at me! What the hell was this thing? Where had it come from? I could see what looked like a mouth on the end of each finger. Each one was opening and closing as you’d imagine a leeches mouth to do when it grabs hold of your skin. “I swear to God my husband will kill you when he gets home! Leave me alone! Just leave, Please!” My voice was becoming horse from screaming. I was still crouched on the floor of the bathroom when it now pressed its face against the glass, the big black eyes staring in and blinking, its jaw moving from side to side.

With nothing between its sickly skin and the glass, I could make out the nightmarish features even clearer now. One feature in particular made me wish I could somehow tear my eyes away. As it adjusted its jaw from side to side, I could see what look like lips folding back. Snarling. They revealed a set of teeth who’s size was only rivaled by those big black eyes. A regular set of teeth this size would have been disturbing, but this thing had a mouth as inhuman as its hands. It had rows of teeth, overlapping one another. But they weren’t sharp, not like a sharks teeth. They looked almost human, though this thing was far from it. They were big and yellowed, flat at the bottom which made them look more like cleavers than serrated knives. The further it’s lips drew back, the more rows were exposed, and just then it began making an awful sound. It was like a tree full of cicadas. The teeth began to chitter, crashing into one another violently enough to be heard. Every now and then it would take a sickly breath in and start chittering its teeth together again, sometimes they’d even click against the glass. All at once, it stopped. It was motionless. It took another deep breath and its attention seemed to be drawn upwards above its head. It looked at the opening at the top of the window and its hand, with its long leech like fingers, began making it’s way through.

It’s fingers were wrapped in a thin, slimy skin. It was thin enough to make out purple and red veins running the length of its appendage. The leach like mouths at the tip of its fingers opened and closed as though begging for food. Each one was lined with needle like teeth, much different from the ones in it’s mouth. There was a sickly yellow puss oozing from each fingertip and a foul stench beginning to fill the room, something like a corpse left to decay in a hot room. I gagged as the smell grew fiercer. The chittering started up again and I could hear the beast’s sickly breathing, but there was a different tone to it this time. It was more like the sound of a rabid dog who got a hold of a scent it was quite enjoying. The breathing was accompanied by a slurping sound, like it was trying to keep from drooling all over itself.

I don’t know if it was the fear finally mounting and pushing me or if it was the smell making me nauseous enough I could feel myself swallowing vomit back down my throat, but I jumped to my feet and slammed the window shut, managing to just miss the leach like fingers reaching for me. The beast let out an unnatural shriek, a strange combination of a howl and the shrill cry of a banshee as if coming from two different creatures. Its hand flailed around in pain while I backed up, the figure still howling from behind the window. I began backing up, not even bothering to grab a towel, I had far more to worry about. As my hand grasped the doorknob, the figure began to bash its face against the window. It battered the window again and again, cracks forming in the thick frosted glass. Should this thing break into my home, would anyone come to help me? With the beast shrieking like a wild animal caught in a trap, someone had to have heard it, right?

I turned to run and heard a crash of shattering glass behind me. As I ran through the hall leading to my bedroom, I could hear glass crunching under its feet. The chittering started again, the sick, ragged breathing, the slurping noise. My wet feet fought for grip against the cold hard tiles, slapping with each step. I made it to my room, slammed the door behind me and hid between my wall and bed. I could hear heavy footsteps approaching, the ragged breathing and cicada’s chittering. I grabbed my pillow from the bed as I sat against the wall, my heart beating in my ears. It was all I could hear. The silence was all I could hear. With my face buried in my pillow, I realized I could no longer hear the breathing, or the footsteps. Was it right outside, simply toying with me or had it gone? Would it try to sneak in through the windows which sit just above my head? As I turned to look out the window, I was half expecting to see that face staring back at me, clearer this time.

The sound of the rattling door knob shot through the dark and silent room like a shot gun blast. It wasn’t about to let me leave this room. I screamed, hands and face digging deeper into the pillow. The figure threw its body against the door, each thud ringing louder than the last. I could feel my tears and spit soaking into the pillow case, but I couldn’t tear my face out of it. In that moment, it was like a shield to me, and I wasn’t letting go but my heart stopped within the next second. Two cold hands grabbed at me, digging into my shoulders. They shook me violently back and forth, and through my screams, I could hear a familiar voice.

“Kim! Kim relax! Kim, God damn it, what the hell is wrong with you?” It was trying to fool me! I refused to open my eyes.

“Kim, please, calm down. You need to stop screaming. What happened to the window?” It couldn’t be Scott, It couldn’t be! But as the hands brought me closer to the voice, I could finally make out my husband’s face through my waterlogged eyes. That thing couldn’t have been Scott- the body, the hands – they didn’t match up. It hadn’t been him. But how could I attempt to explain anything to him… How could I explain it to myself?

Attempting to gather my thoughts, I felt the words get lodged in my throat. The look in Scott’s eyes told me it hadn’t been him and he wasn’t just playing dumb. No level of special effects prowess could bring that nightmare to life.

“Scott… there was… I was in the shower… It was through the window… The sound was…”

I looked up. I was frozen in place. The chittering, that disgusting chorus of bugs filled the room. My eyes locked on Scott’s, I could just make out a figure crawling on the ceiling above him. With a beastly shriek, the figure dropped down. My head slammed into the wall behind me and my vision grew blurry. Scott’s screams were the last thing I heard before everything went black.

November 3rd , Fox Hills, NY-

A Fox Hills woman is being questioned by authorities in the suspected butchering of her husband on Halloween night. Kimberly Allen, 28, was found naked and laying in a pool of her husband Scott Allen’s blood. Mr. Allen, 30, was found dismembered from what looked to be repeated blows from a cleaver, which is yet to be recovered. Mrs. Allen was found unconscious from what is suspected to be a self-inflicted blow to the head, a blow authorities suspect she carried out to help support her story of an intruder. First responders made it to the scene after a concerned neighbor called in what they suspected to be a domestic dispute. The caller, who wishes to remain anonymous, say they called the Fox Hill’s Sherrif’s Department after hearing Mrs. Allen’s screams and what sounded like shattering glass. They did say Scott could be heard yelling shortly after, but exactly what was said is unclear. Mrs. Allen is sticking to her claim that there was no such dispute and Mr. Allen was attacked by an intruder, the true culprit of the attacks on her and her husband, and has in fact asked for higher security outside of her cell. No foreign finger or foot prints have been found at the scene and no other arrests have been made.

They’ve moved me to the Fox Hills Psychiatric Center. As I sit here now, crying through interrogation after interrogation, all I can do is wonder why. Why didn’t it take me? Was it the sirens? Did the first responders scare it off somehow? I don’t know if anyone will ever believe me. Despite his jokes and cruel pranks, my Scott was a good man. The figure though, that otherworldly abomination, is still out there and I would be foolish to think it won’t find me again somehow. I got lucky that night, as sick as that sounds, but next time, that may not be the case. Next time there may not be sirens or concerned neighbors to scare it off. Thankfully, the authorities have taken my one request seriously. Just this morning, they added another guard outside the door of my room, and two guards just outside the frosted glass window that sits above my bed.

#creepypasta #scary stories #creepy #scary #spooky #spooky stories #horror story #horror film #horror #short story #writers of tumblr #original writing #writeblr #writerblr #moonlight madness #moonlight madness writes

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keeroo92 · 5 years ago

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Savior, Bloodstain, Hellfire, Shadow Ch 23 (V x Reader)

Chapter 23 - Prelude

________________________________________________

June 15th, 6:12 am

The last few hours since V and Nero’s departure had felt like a millennia. Every second passing was another second you pictured another vision of V and Nero dying at the hands of some formless monster. Each heartbeat was another beat during which their hearts may have already stopped. Each breath you took was another gasp of air that you prayed they inhaled too, wherever they were and whatever they faced. You had long since run out of tears, only your shaking body and twisted expression showing the turmoil in your mind.

You sit with Nico in silence, her arm still draped over your shoulders as she chews on her bottom lip nervously. You barely notice her presence as you imagine Nero falling off a twelve story building, the same crunch you heard when his spine broke echoing brutally as he hits the ground and breaks every bone in his body.

Nico’s gentle hand stroking your hair only triggers an image of V getting his hair, his wonderful hair, ripped out harshly by a ghostly hand, bits of his scalp still clinging to the roots in bloody chunks of flesh. The formless hand descends again, claws sprouting from its fingers and slicing across V’s bleeding scalp deep enough to reveal the grey mass hidden within and you swallow harshly to keep yourself from vomiting, your body curling inwards in preparation despite your best efforts.

“Ah, fuck this! Hold on, honey, I’ll get us there as quick as I can!” Nico exclaims suddenly, her body rising away from you to dash to the driver’s seat. You blink slowly as she starts the engine, your awareness of reality foggy. She floors the accelerator and your body is shoved against the leather of the couch as the force hits you.

Is it time to go now…? We’re going to find them?

You brace your feet on the rug and force yourself to stand, keeping your knees bent in case Nico has to take a turn. This proves to be wise as she does exactly that, throwing your body sideways as you barely manage to keep yourself upright.

“Get your ass up here, Y/N! It’s gonna be a bumpy ride!” Nico shouts from her seat with a crazed laugh.

An image of V’s face glazed over in death spurs you to move, a few desperate steps bringing you within arms reach of the passenger seat just in time to grab onto the headrest as Nico turns again, two wheels leaving the ground entirely as she howls around a corner. The tires hit the ground again in a loud screech and you pull yourself into the seat beside her, hurriedly clicking your seatbelt into place. She winks at you as the van slams into a parked vehicle and just keeps barreling forward as if nothing happened.

Not for the first time, you find yourself wondering where on Earth Nico had learned to drive.

You look out the windshield, hoping to catch a glimpse of Nero or V somewhere in view to no avail. All that greets your hungry gaze is more of the same abandoned cars and rubble you’ve seen enough to last a lifetime now. You’re about to lean back when a low rumble sounds from above, and as you watch the Qlipoth root that was the target of the attack turns grey and shatters, massive hunks of the stony structure falling across the area in a wide spread. Nico cheers and you can’t help but join her even as your stomach lurches, wondering what state the two men are in.

With a final screech of rubber, your prayers are answered as V and Nero come into view; panting, dusty, covered in blood but alive and standing! Griffon flies overhead and Shadow prowls around the lean poet’s feet as the van comes to a shuddering halt not ten feet from where the two men stand watching. Your fingers leap to the catch of your seatbelt in such a rapid movement they slide right off again from the sweat covering your palms. You growl in frustration, wiping your palms on your pants with gritted teeth.

“I know, I know, I’m late! Shut it!” Nico jokes out the window at the two men. “The roads were all clogged!”

You don’t hear whatever she says next as you mercifully manage to unbuckle yourself and almost fall out of the seat in your rush to reach V. A portion of your mind idly watches V flick a piece of whatever demon he and Nero had defeated into Nico’s grasp as you sprint at him, only able to breathe again once you finally wrap your arms around his slim frame. He lets out a low grunt at the impact, but his free arm finds its way around you quickly enough. You inhale his scent joyfully as Nero scolds Nico somewhere in the distance.

“Did you just sniff that? Do you have any idea where that’s been?”

“Up your butt?”

“Tch. Focus on the mission!”

All sound seems to fade as you feel V’s chest rumbling beneath in laughter, the boisterous sound telling you everything you desperately needed to know about how he was after the battle. Relief floods you, a powerful flood of energy seeping away through your toes into the ground as the tension leaves your body at last.

I have to get strong enough, so he never has to leave me behind again.

“One rotten sheep spoils the whole flock,” V quips with an adorable smirk, and you slowly begin to giggle as his meaning becomes clear and the stress vacates your senses. His emerald eyes sparkle in amusement as your laughter erupts from you, his own mixing in once more to your delight.

It feels stunningly perfect to laugh, to take a moment to enjoy V’s unique sense of humor in the chaos surrounding you. You tighten your arms around him once more before you let him go, ready to join Nero and Nico in the van. You take V’s hand and enter the van to formulate the next attack, feeling infinitely better about your prospects now that the two men had managed to take down a root without sustaining any injuries. Griffon follows you, settling in on top of the old-fashioned jukebox across from the couch.

Inside, Nico is already hard at work, cursing as she tries to figure out a way to make use of the demonic horn V had tossed her way. You sit down in your usual spot on the as V approaches Nero up front where the young warrior sits with his feet on the dash.

Now that the group is safely reunited, you vaguely remember your gift for Nico and you bring the phone to her with a smile. She glances up at you in confusion before her gaze drops to your hands and grins widely.

“Awesome! Is that for me? Lemme take a look at it, should be able to get it working if I can just…” she trails off as you place the landline in her hands, her mind already hard at work to figure out how to get the phone hooked up to the van. You turn back to the two men in the front, addressing them both equally as you sit back down on the couch.

“Just so you know, I’m not staying behind again,” you pipe up, crossing your arms stubbornly.

Staying behind with Nico had been a special kind of torture, forcing all the familiar feelings of uselessness, powerlessness, self-doubt and panic to wrap you in their embrace like an old friend. Even though it made logical sense for you to remain with Nico, you know it would tear you apart until you had nothing left, leaving you in a near-constant state of high caliber panic and anxiety.

I don’t want to watch them dying in my head anymore. I can’t.

Instantly as you think of them, all the different visions of V and Nero’s deaths flood your mind again and you stop breathing, heart locked in a terrible vice and stomach roiling harshly as you struggle to stay in the moment, to focus on the now. You start counting in your head, the linear progression of numbers a soothing balm of logical thinking to ease your emotional state.

“In that case, I think we should split into two groups,” V informs the group after your pronouncement.

“And cover more ground. Good idea,” Nero replies, spinning back around to head Nico’s way but she’s already stepping out from behind the counter with a new arm held out proudly. It’s a different design, red and black and much bulkier than the Bladestorm Nero has been using so much.

“Behold, my genius! Ah, ah, cash first,” Nico insists as Nero reaches out to take the new device from her, Griffon watching in amusement behind him. You see V sit on one of the small seats by the table out of the corner of your eye, smirking as he watches the pair argue.

“All the materials I collected for your little pet projects don’t count for anything?” the young warrior complains with a gesture at her work station, but she barely glances at it before she responds.

“My brilliant, badass work is worth every dime, and you know it,” she tells him as she pulls out a cigarette and crosses by Nero, forcing him to step back to make enough room for her to pass.

“Yeah, well your quality control sucks ass, and you know that,” Nero snaps back with a gesture of his hand. V glances at you with a twinkle of mirth in his emerald gaze, the two of you enjoying the show in silence.

“Or maybe don’t let the demons smack you around so much?” Nico suggests with a sharp flick of her arm. Nero clenches his jaw and flushes just a tiny bit as he turns away from her, stepping over to stand near the work bench.

“Whatever,” he mutters as he leans against the wall near you.

Nico holds up the device once more, smiling proudly as she watches the way it reflects the light.

“I am truly gifted. It’s a work of art,” she comments reverently, holding the arm up near where Griffon perches on the jukebox. The mouthy bird chuckles for a moment in amusement before his gravely voice rings out from his triple-forked beak.

“So you’re an artist now, huh?” he asks Nico mockingly.

She turns to face him so quickly he visibly jumps back in alarm, wings opening slightly to keep his balance as he lets out a startled squawk. You can picture the glare Nico sends the bird as she faces away from you, her voice a threatening tone.

“Yes I am. Got any questions, little chicken?”

Nico turns to face V, a small smirk gracing his lips as she ignores Griffon to address him.

“My grandmother was called the .45 caliber virtuoso. Legendary gunsmith,” she tells the lean poet, mechanical arm in one hand and unlit cigarette in the other. “I hope to be like her someday. An artist, and a lethal artisan.”

Her gaze shifts back to the arm in her grasp with a proud smile as she speaks. “Everything I create is a work of art, whether it’s a gun…”

She pauses and steps closer to Griffon again. “Or a steel pot, to cook birds in!”

Nico spins around and plops down on the couch next to you, one hand reaching for a lighter as she concludes, “Any more questions? Huh, lil’ chickee?”

Griffon ruffles his feathers, trying his best to not show any fear, but you can tell the idea of being cooked disturbs him thoroughly. V chuckles lightly as he stands, waving one arm through the air as Nico exhales a large cloud of smoke.

“We’ll take our leave now,” he says with a glance at you. You quickly stand and make sure you have everything you’ll need as Nero steps forward, slinging his massive blade across his back from where it rests beside the jukebox. V catches his eye for a moment as he opens the door to leave.

“And if we don’t see you along the way, we’ll see you at the bottom of the Qlipoth,” he murmurs as he steps out of the van. You give Nico a quick hug, and Nero a solid fist bump before you follow V outside, overjoyed to be accompanying him.

The lean poet seems stronger, more energetic than usual. His cane held loosely in his left hand, looking more like a stage prop that a necessary medical device as he strides away from the van confidently, his body almost swaggering as you follow behind him. Griffon flaps overhead, keeping his strange eyes peeled for any sign of trouble as you progress.

The sound of your new sword striking the metal crutches sets an easy rhythm for your steps, your faithful baseball bat slung over your shoulders on top of your backpack. It’s now been almost ten days since your hip injury, the pain fading a little bit more each day. You haven’t had to take any ibuprofen for a few days, your high pain tolerance serving you well.

By this point, the crutches are more of a formality. I don’t really need them to walk, but also shouldn’t walk unaided as much as I’m sure we’ll need to. I can drop them to fight easily enough.

Griffon’s voice shakes you from your thoughts as you follow V into a small tunnel, some kind of passage below the street that crosses over the top of the structure. Griffon follows soon after, massive wings disturbing the dirt beneath your feet with each flap.

“So, V you think this kid can defeat Urizen?”

Does he mean Nero?

You can hear the smirk on the poet’s lips as he replies softly, “One can only hope.”

Suddenly the rear of the tunnel collapses, chunks of rock crashing down to rest a few yards away from where you stand. You cough as the dust rises, choking you slightly.

“But for now, we have a more pressing engagement,” V concludes. He checks to make sure you’re alright and strides forward again, his focus clear. You follow a few steps behind, taking a sip of water from one of the bottles to help clear your throat of dust particles. You’ve barely reached the next turn in the road when you spot some Empusa. V quickly flicks his wrist and Shadow materializes with a low roar.

You drop your crutches, standing strong on your own two feet as you draw the sword, wrapping your right hand up close to the guard loosely as Griffon mocks Shadow overhead.

“Oooooh, genius says be careful! No shit, Shirley. Ain’t that right, V? I mean, you ARE fragile at the moment, wouldn’t take much to wipe you out in a sticky situation!”

V smirks, a sparkle of amusement lighting his eyes as he pulls out his book, letting it fall open to any page and reading the first line he sees aloud.

“He who desires but act not, breeds pestilence. So it is written,” he intones, snapping he book closed again and stowing it back within his vest as Griffon replies with a sigh.

“Okay Shakespeare. Just remember this: you and I like to exist. So, get rid of those demons quick, cause killing ‘em ain’t my shtick! I got your back, cause dying is whack!”

Shadow lets out another roar as you step forward, twirling your blade in front of you to loosen your wrist. The nearest Empusa moves toward you and you shoot V a glare to warn him not to interfere. He smirks and redirects his attention to the other two Empusa, Griffon and Shadow already on the offensive.

Your foe charges at you suddenly and you step to the side quickly, lowering your blade across its back as it crosses by you. The sharp edge sinks deep into the creature, leaving a satisfying slice on its back as it turns to face you again. You wait until it charges again before snapping your sword forward, making sure to brace the pommel on your inner wrist as Nero had shown you as you thrust the tip of the blade deep into the Empusa’s hideous face. You grin maniacally as it pokes all the way through its head.

As the tell-tale ash rises from its corpse, you turn to see V watching you with a pleased twist marking his mirth. When you step closer he actually starts laughing.

“What’s so funny, my poet?” you ask him curiously. He chuckles once more before resting an arm over your shoulders with an adorable smirk.

“Do you remember when you saw your first Empusa? At the store when we needed supplies?” he inquires.

How could I forget? I killed the damn thing with a frying pan.

You nod slowly and V smiles as Shadow pads up to you for some scratches. You happily oblige her as he explains his mirth.

“I was remembering how you looked when I found you, that pan still in both hands. You had the exact same look on your face just now as you did that day, the same lovely bloodthirsty smile. The comparison of circumstances amused me, my little warrior fox,” he informs you with a wide smile. You wipe your blade on your sleeve carefully and sheathe it before leaning over and giving V a playful swat on the behind. He raises an eyebrow at you and reaches out to pull you against him for a kiss that stops time.

I’ll never get tired of kissing him…

You moan lightly as Shadow huffs and pads away. You hear Griffon making retching noises somewhere nearby but ignore it to focus on the wonderful sensation of V’s full lips caressing yours, his tongue dipping in and out of your mouth skillfully as he teases you to the point of gasping. You squeak suddenly when V’s steady hand strikes your ass in a firm spank, his fingers grasping your toned flesh and caressing it tenderly to soothe the sting away. He growls into your mouth as he pulls back and you surge with confidence at the flush on his cheeks and the glazed look of his emerald eyes.

“Between two moments bliss is ripe,” he recites in a purr that leaves your knees weak. Much to your disappointment, he releases you from his embrace with a sigh.

“We must keep moving,” he reminds you sadly and you nod in agreement. You hastily situate yourself on your accursed crutches and follow V as he strides forward, Griffon flapping above and Shadow prowling nearby.

A short time later, you enter a courtyard as you exit a building, shipping containers forming a blockade ahead. You look back to V questioningly to see him staring at a series of dark shapes above. They resemble bats, but they’re far larger than any you’ve ever heard of. You glace at V again as Shadow roars a challenge to them.

“Hellbats. They can spit fire, so keep your eyes up,” he instructs you with a grimace.

You sigh heavily and drop your crutches with a clatter, drawing your sword with a satisfying sound of metal sliding against its sheath. You hold it at waist height and wait, knowing one of these foes will eventually come to you. Even as you stay motionless, V bursts into action. Griffon swoops forward, raking one of the bats with his harsh talons. Shadow shifts into her spinning blade form, rising off the ground to slash deep into another bat nearby.

You see one coming your way and raise your blade a bit higher, stepping forward to slice clean through the creature as it starts to gather flames in its mouth. Its ash blows away in the slight breeze as you glance at V again.

He’s in the middle of a flying leap, bringing his cane down to bear against a Hellbat with a sharp thrust of his lean arms.

He’s fine, I don’t need to worry about him.

The last bat not already fighting one of you swoops close to you, a stream of fire falling from its gaping maw as it passes. You leap aside with a gasp, your hip twinging slightly as you land. Even so, you manage to reach out with your jian and make a clumsy cut into the demon’s wing. It circles haphazardly for a moment before it’s forced to the ground and you quickly finish it off with a single swing of your blade.

You look around for the next combatant only to find there are none left. You shoot an exhilarated smile at V as your chest heaves in exertion. You clean your blade and sheathe it again carefully, following V as he strides to the corner of the courtyard toward a stairwell leading down. A partially destroyed brick wall stands ahead, and V carefully climbs over it with a gesture for you to wait there. A moment later, you hear Griffon’s raucous cries as he attacks something and you blink in amusement as a portion of the nearby root crumbles away, giving V a way forward around the corner out of your sight. He returns a moment later with a smile as he jumps off the ledge with a laugh. You gasp and look over the edge to see Griffon grasping V’s arm and slowly lowering him the last few feet.

Now you’re just showing off…

You roll your eyes but take hold when Griffon returns for you, the ladder a bit much with how full your hands are. Once on the ground, you have to step carefully around the twisting train tracks lining the area. More shipping containers lie strewn about, some stacked carefully but others having clearly moved when the Qlipoth struck. You pause your observations as red webbing appears and a swarm of Empusa come crawling out of various nooks and crannies, a few popping in through gray portals.

V smirks at you and winks before raising his left hand high and snapping, the obsidian hue of his hair swirling away to reveal the snowy tone underneath. A fireball descends from on high, the herald of Nightmare’s arrival striking perfectly between several of the Empusa. V darts forward and deals the final blow to several in rapid succession as Nightmare bubbles into existence.

You stay far back and watch as V stalks around the edges of the tracks, his emerald eyes always seeking the next death blow as Nightmare shoots laser after laser into the demons, Griffon cackling as he spits lightning and Shadow roaring as she swipes her claws angrily.

Sometimes I forget how powerful he actually is… this is like an orchestra.

As if V heard your thoughts, he turns to you with a grin and extends his cane out in an approximation of a conductor, loudly humming a few bars of Flight of the Valkyries. As his hand punches the air in emphasis, you can’t help but giggle.

He seems so happy today.

He winks at you once again before leaping back into the chaotic battle to finish off the last few Empusa with a dark chuckle, white hair flowing as he moves gracefully about. As Nightmare bubbles away with the last demon, his hair regains its dark tone and he steps back over to join you.

“You are so ridiculous sometimes, you know that?” you inform him with an amused smirk. He shrugs and leans in for a quick peck, a soft hum of contentment thrumming in his throat.

“I thought I’d give you a taste of the Opera you wanted, little fox,” he murmurs as he steps back, his words warming you in his affection.

“Ah, well… it was quite the spectacle!” you tease him as the two of you set off once more, heading toward a distorted bridge covered in small Qlipoth roots. V has to help you step over a few of the larger ones. Roughly halfway across, a bulging red mass extends from one of the tendrils, pulsating angrily in a mimicry of a heartbeat. The roots here are too large for you to traverse, and V sighs as he ponders his options.

“This bridge seems unstable… If I were to clear that root, it may collapse,” he informs you seriously.

“So… what do we do?” you ask in response.

He gazes off into the distance, his eyes sweeping across the myriad of sunken buildings as he thinks. Suddenly he grins, chuckling as he points.

“Look, I can see Nero,” he shows you and sure enough, the white-haired warrior is off in the distance, finding his own way across the area. As you watch, something shoots from his new arm and he latches on to a strange orb floating between two buildings, tugging himself forward to land on the next rooftop from the momentum. You hear a faint whoop as he trots forward to meet a few demons in battle, his sword gleaming with flames.

You shake your head and turn back to your own situation, gears turning in your mind to find a way across, but you can’t think of anything useful. V follows your gaze and clenches his jaw irritably as he steps closer to the red pustules. You follow him easily enough on the smooth surface; the area is still lacking the rubble you’ve grown so accustomed to.

“I don’t see any other options, I’ll have to risk it,” V murmurs and you nod, bracing yourself in case the bridge fails. He flicks his wrist out and Shadow appears, her claws already slashing forward to attack. It only takes a few strikes for the red orbs to burst, showering V in blood. The root turns gray and the bridge beneath your feet rumbles as it begins to fall away. V grunts, bracing his cane against the ground to keep himself from hitting the ground. His fearful eyes meet yours as he rushes forward, only a step ahead of you as you scramble behind him. He reaches out both arms, one to pull you to him and the other extended out as he leaps into free space, the bridge collapsing into the water below with a great crash.

Your heart stops as his arm barely manages to reach you, tugging you against him harshly as you both begin to fall together. A swarm of black shards escapes V’s outstretched arm and Griffon materializes above you. His feet latch onto V’s still raised arm and you can feel the jerk as the momentum shifts. Griffon struggles, flapping as hard as he can but unable to rise.

Oh shit, we are so dead!

“V, need a little help here!” the bird shouts in alarm.

“My hands are quite occupied, my friend,” the lean poet answers in a tight tone. The small coil of fear in your belly grows into a full-blown snake as you realize you might still fall and your grip on V tightens harshly in your fear. He looks down at you and clenches his jaw, something in his eyes shifting as he comes to the same conclusion. He growls deep in his throat and suddenly Griffon shoots higher, bringing you above the lip of the edge of what remains of the other side of the bridge with a triumphant howl. Griffon flaps a few more times, bringing you farther over the edge as V swings his body and lets go, rolling onto himself to take the worst of the impact himself.

V grunts heavily as his shoulder strikes the pavement, you landing on his chest as he’d planned. The two of you pause a moment to catch your breath after the near miss. He chuckles against you as his arms relax, letting you sit up to take a look at his shoulder. He dutifully holds still as you probe the joint, checking for any damage.

“I think you’re good, except for the bruise you’re bound to get,” you inform him after you conclude your brief exam. He smiles and sits up with a sigh, offering you a hand up once he stands again. It’s only as you rise that you realize you dropped one of your crutches.

“Damnit, I lost a crutch!” you exclaim in frustration, glancing around on the off chance it landed on this side. V looks too, but the area is devoid of the strange contraption. You sigh but resolve yourself to make do with just the one.

I didn’t really need them that much anymore, but still…

“Shall we see if there’s something you could use instead?” V asks thoughtfully, but you shake your head.

“It should be fine. Let’s keep going,” you insist with a grim smile. He nods and steps forward toward what the building at the end of the tracks. Your eyes widen as you approach, seeing the shipping containers precariously balanced near another thick root. V walks over to a hideous demonic spout, green ooze leaking from its orifice in a slow, viscous stream. He hums happily as he reaches inside the gap and pulls out what looks like a chunk of brain tissue with red strings coming off it and stuffs it in his pocket. The sight reminds you of your nightmare and you shiver uncomfortably.

“Uh, what’s that for?” you ask quietly.

“It’s a Niddhog hatchling. They can be useful occasionally,” he replies mysteriously as the spout-like structure dissolves. You push your disgust away as you follow him into the building through a door on the side, passing several orange construction dividers along the way. You descend a set of stairs into a storage area, crossing it quickly and without interruption.

The street below is strangely clear, the unusual void of debris and vehicles making you tense uneasily. Your instincts are proven correct as you and V enter a side lot, red webbing blocking your escape as two Empusa climb out of portals, a third green one flying overhead. You draw your sword and drop your remaining crutch, descending into a low crouch. V flicks his cane to the side and Shadow’s form appears in a cloud of black shards, Griffon not far behind as V’s arms lighten considerably. The Empusa don’t stand a chance, dropping quickly to your group.

But the fight isn’t over – a pair of Caina and a pair of Antenora wriggle through their own portals, a slightly more difficult challenge but one you know you can handle with V at your back.

“I’ll take the one on the left!” you shout to him, sprinting forward to aim a low slice at the belly of the nearest Antenora. It hits, but you have to hit the ground as the demon swings back at you with one of its massive cleavers. From your position below, you carefully turn the sword and jab it up under the creatures jaw, the tip poking out through its head in a shower of blood. It starts to dissolve as you withdraw the blade, standing quickly to face your next target.

One of the Caina steps toward you slowly, and you remember the day Nero taught you about these ugly beasts as you wait for it to slash at you with its scythe. The moment it does, you duck and roll, barely able to somersault between its legs with the sword in hand. Once you’re behind it, you drive the blade into its back with a backwards thrust. Feeling its hot blood splash against your crouched form makes you grin in triumph. Your body aches as you stand; the somersault hadn’t been very graceful. A wince of discomfort crosses your face as you watch V clean up the last Caina with ease.

It’s amazing how in sync we are, how much we trust one another in a battle.

Then again, it was easy to trust the man who had saved your life before he even knew your name.

“Shall we?” V murmurs, bringing your attention back to the present. You nod and clean your blade, sheathing it cautiously and getting your crutch from where you had dropped it.

You barely manage to catch your breath before the next fight begins, another group of Hellbats and Antenora crawling into existence to try to murder you. They fall much the same as the last ones did, and you share another grin with your partner as you continue forward. He exclaims softly a moment later as another growth of roots comes into view, but this one has a strange gap in it, oozing green pus from the crevice. It smells horrendous, like an infected wound that’s turning gangrenous. You see V reach inside his pocket and pull out the hatchling as you try not to think about what the strange orifice resembles.

He places the little thing in the opening and it wriggles within. After a moment, the structure turns a ghastly shade of green and shatters, a gush of the disgusting fluid spraying across the pavement and barely falling short of where you stand and you retch harshly.

To your disappointment, there’s nothing of note in the small area revealed by the roots disappearance, and you and V trudge onward once more. Another few Caina and Antenora try their luck and fall without much fuss as you enter a marketplace. Sandwich board signs dot the cobblestone area advertising organic produce and boasting about their quality. The green stalls themselves stand much the same as they may have before the infestation, the only significant differences being that all the food is long rotted, flies hovering above boxes of spoiled fruit happily as the sickly-sweet scent tickles your nostrils.

You force down your disgust as your eyes sweep the area and find more of the human shaped husks crowding the pavilion. You block them from your awareness as you follow V, but as you step forward you feel your sword catch on something. You look down to see what caused the sharp tug at your belt to see the grey remains crumble into dust, leaving only the plantlike red fibers, still forming the shape of a human being vaguely as they wave in the breeze.

The sight makes your skin prickle in revulsion, your stomach rolling as you physically retch for what feels like the thousandth time today, your back arching into the motion as saliva floods your mouth in preparation to vomit. You close your eyes as V walks over to you, taking deep breaths and counting internally to soothe your emotions back into submission. His tattooed hand rests on the small of your back as you gather yourself, only speaking once you manage to stand straight again.

“Like a reflection in a glass, like shadows in the water,” he comments gloomily, rubbing a small circle on your lower back before his hand drops away. You give him a shaky nod and step forward, rapidly approaching the base of the root. You can see where it reaches the ground ahead, a strangely wormlike creature hovering nearby. You take one last look at the marketplace and spot a red telephone booth.

Maybe Nico got the phone working by now!

You hurry to the booth excitedly, seeing the flickering backlight indicating it still has power only to realize the flaw in your plan; you have no coins. V reaches you with a smirk, unsure why you’re so focused on the booth but following along anyway.

“V, do you have any change? We might be able to call Nico! I gave her the phone from my apartment,” you explain to him and he barks out a laugh in understanding. He fishes around in his pockets for a moment, finally pulling out a single coin with a triumphant gleam in his eyes. Before you can snatch it from his long fingers, he steps into the booth himself and slides the coin in. You hurriedly recite your old phone number and cross your fingers as he dials.

A surge of joy envelops you as you hear V speak into the mouthpiece, telling Nico where to meet you. He hangs up quickly, the conversation brief. As he steps out of the booth, you hear the loud engine of Nico’s van approaching above you and you look at V in confusion. His emerald eyes shoot up as Nico’s van comes into view, almost seeming to fly as it comes down from above you, and you can hear Nico’s loud exclamation as she loses control of the vehicle.

Oh no…

There isn’t enough time to finish the thought as V springs into action, leaping off the top of the booth and using Griffon to give him a tiny bit more lift. He turns and Shadow appears out of nowhere, her heavy paws smashing against the top of Nico’s van to force it to the ground in an echoing crash. V grunts as he lands in a low crouch nearby, casually pushing his hair out of his eyes as he stands straight again.

You gape at V, your open mouth and wide eyes making him chuckle as he glances at you, his steps already bringing him to Nico’s van where it rests under a small green sign that reads “Bael the Butcher”. You shake your head and follow him, eager to greet Nico.

“Hey guys, long time no see! Phone was a good call, Y/N!” Nico says, emphasizing her pun with a smug grin as she steps out to give you a hug. You roll your eyes but laugh with her easily.

“Dang, is that the root?” she asks you as she gets her bearings, her eyes drifting to the huge demonic structure in the next area.

“Yes, would you mind waiting for us? We may need to make a hasty exit,” V replies, twirling his cane absentmindedly. Nico nods seriously and pulls out a cigarette, lighting it as she leans against the van to wait and watch as you and V face whatever new monstrosity awaits you.

#dmc5 v #dmc5 #dmc #fanfic #v x reader #v x you #reader insert #op #SBHS #my writing #devil may cry #vitale

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lastmover · 5 years ago

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2019 Berkshire Hathaway Annual Meeting (Morning) Transcript

1. Welcome and Munger’s insurgency campaign

WARREN BUFFETT: Thank you.

Good morning and welcome to Berkshire Hathaway.

And for those of you who have come from out of state, welcome to Omaha. The city is delighted to have you here at this event.

And for those of you who came from outside of the country, welcome to the United States.

So, we’ve got people here from all over the world. We’ve got some overflow rooms that are taking care of people. And we will just have a few preliminaries and then we will move right into the Q&A period.

We’ll break about noon for about an hour. We’ll come back and do more Q&A until about 3:30. Then we’ll adjourn for a few minutes, and then we’ll conduct the meeting.

I understand that in the room adjacent, that Charlie has been conducting a little insurgency campaign.

I don’t know whether you’ve seen these, but these are the buttons that are available for those of you — you keep asking questions about succession. And Charlie wants to answer that question by getting your vote today. So, it says — this one says, “Maturity, experience, why accept second best? Vote for Charlie.” (Laughter)

I, however, have appointed the monitors who have — collect the votes, so I feel very secure. (Laughter)

2. Berkshire directors introduced

WARREN BUFFETT: The first thing I’d like to do — Charlie is my partner of 60 years, a director and vice chairman, and we make the big decisions jointly. It’s just that we haven’t had any big decisions. So, (laughter) we haven’t — we’re keeping him available for the next big one.

But now at the formal meeting today, we’ll elect 14 directors, and you’re looking at two of them. And I’d like to introduce the 12 that will be on the ballot at 3:45.

And I’m going to proceed alphabetically. And if they’ll stand. If you’ll withhold your applause because some of them get sensitive if certain people get more applause than others, and (Laughter) they’ll — and if you’ll withhold it till I’m finished, then you can applaud or not, as you see fit, having looked at these directors. (Laughter)

So, we’ll start on my left. Greg Abel, who’s both a chairman and a director. Greg? Yeah, oh, there we are. Right, OK. And going along alphabetically, Howard Buffett, Steve Burke, Sue Decker, Bill Gates, Sandy Gottesman— (applause) — Charlotte Guyman, Ajit Jain, who is also a vice chairman, Tom Murphy, Ron Olson, Walter Scott, and Meryl Witmer. Now you can applaud. (Applause)

3. Berkshire’s Q1: Pay attention to operating earnings

WARREN BUFFETT: Now, this morning we posted on our website the quarterly, the 10Q that’s required to be filed with the SEC. We published it at 7 o’clock Central Time. And we also published an accompanying press release.

And if we’ll put slide one up — these figures as usual require some explanation. As we’ve mentioned in the annual report, the new GAAP rule of Generally Accepted Accounting Principles require that we mark our securities to market and then report any unrealized gains in our earnings.

And you can see, I’ve warned you about the distortions from this sort of thing. And, you know, the first quarter of 2019 actually was much like the first quarter of 2018, and I hope very much that newspapers do not read headlines saying that we made $21.6 billion in the first quarter this year against a loss of last year.

These — the bottom line figures are going to be totally capricious, and what I worry about is that not everybody studied accounting in school, or they can be very smart people but that doesn’t mean that they’ve spent any real time on accounting.

And I really regard these bottom line figures, particularly if they’re emphasized in the press, as doing — as potentially being harmful to our shareholders, and really not being helpful. So, I encourage you now, and I encourage all the press that’s here, focus on what we call our operating earnings, which were up a bit. And forget about the capital gains or losses in any given period.

Now, they’re enormously important over time. We’ve had substantial capital gains in the future; we have substantial unrealized capital gains at the present time; we expect to have more capital gains in the future.

They are an important part of Berkshire, but they have absolutely no predictive value or analytical value on a quarterly basis or an annual basis. And I just hope that nobody gets misled in some quarter when stocks are down and people say, “Berkshire loses money,” or something of the sorts. It’s really a shame that the rules got changed in that way, but we will report.

But we will also explain, and we will do our best to have the press understand the importance of focusing on operating earnings, and that we do not attract shareholders who think that there’s some enormous gain because in the first quarter the stock market was up.

There’s one other footnote to these figures that I should point out. It’s already been picked up by the wires from our 7 o’clock filing.

We report on Kraft Heinz, of which we own about 27 percent or so. We report on what they call the equity method. Now, most stocks, when you get dividends, that goes into our earnings account, and their undistributed earnings don’t affect us. They affect us in a real way, but they don’t affect us in an accounting way.

We are part of a control group at Kraft Heinz, so instead of reporting dividends, we report what they call equity earnings.

Kraft Heinz has not filed their 10K for the 2018 year with the SEC. And therefore, they have not released the first quarter of 2019 earnings. Now, normally, we would include our percentage share of those earnings, and we’ve done that every quarter up till this quarter. But because we do not have those figures, we’ve just — we’ve not included anything.

We received 40 cents times — $130 million of dividends in the first quarter from our shares, but that reduces our carrying basis and it is not reflected in the earnings. So, that’s an unusual item which we have mentioned, specifically pointed out in our press release as well as included in our own.

But there is nothing in here, plus or minus, for Kraft earnings, Kraft Heinz earnings this year, whereas there was last year. And when we have the figures, obviously we will report them. Let’s see what beyond that I want to tell you.

4. Berkshire signs 20-year lease for its Omaha headquarters

WARREN BUFFETT: I think — oh yes, I’d wanted to mention to you, the Kiewit Company, which has been our landlord since 1962 — 57 years — has owned the building in which Berkshire is headquartered.

Kiewit Company is moving their headquarters and, in the process, will be doing something with the building. And they very generously, as they always have been, they came and said, “What kind of a lease would you like? Since we’re leaving, and we’ve always sort of worked these things out as we’ve gone along.” And so Bruce Grewcock, who runs Kiewit, said, “You just sort of — you name your terms and what you’d like. So, you — no matter with happens with the building, you’re all set.”

So, I was about to sign a ten-year lease for the present space, but Charlie said, “Ten years might be long enough for me but,” he said he would like me to sign one for 20 years, considering.

And — so we are entering a 20-year lease, and I confess to you that we now occupy one full floor, as we have for decades, and the new lease provides for two floors. So, I just want you to know that your management is loosening up just a little bit. (Laughter)

And whether or not we fill them is another question. But we will have that, and I would like to say to Omaha that I think the fact that Berkshire has signed up for 20 years is very good news for the city over time. It — (Applause) OK.

5. Berkshire employees pitch in for annual meeting

WARREN BUFFETT: And now I would like to tell you something about the people that make all of this possible. This is totally a — this is a homegrown operation.

We started with a few people, meeting in the lunchroom at National Indemnity many years ago. And I think we will probably set another record for attendance today. Yesterday afternoon, 16,200 people came in five hours, and that broke the previous record by a couple thousand.

On Tuesday, the Nebraska Furniture Mart did $9.3 million worth of business. And if any of you are in the retail business, you’ll know that that’s the yearly volume for some furniture stores, and here in Omaha, the 50th or so largest market in the country, maybe even a little less, $9.3 billion (million) I think probably exceeds anything any home furnishing store’s ever done in one day.

And we have people pitching, and we have all the people, virtually all of the people from the home office, some of them, you know, are — they’ll take on any task. We have a bunch of people from National Indemnity, for example, that come over, and they’ve been some of the monitors around.

And in terms of the exhibit hall, more than 600 people from our various subsidiaries give up a weekend to come to Omaha, work very hard, and tomorrow, 4:00 or 4:30, or I should say today at 4:00 or 4:30, they will start packing up things and heading back home. And they come in, and I saw them all yesterday, and they were a bunch of very, very happy, smiling faces. And, you know, they work hard all year, and then they come in and help us out on this meeting.

And then, finally, if we could get a spotlight, I think Melissa Shapiro is someplace here — she runs the whole show. I mean, we — Melissa, where are you? (Applause)

Melissa’s name was Melissa Shapiro before she got married, then she married a guy named Shapiro, so now she’s Melissa Shapiro Shapiro. So — (Laughter) but she can handle that sort of thing. She handles everything, and never — totally unflappable. Totally organized. Everything gets done. Everybody likes her when they get through. So, I — it’s marvelous to get a chance to work with people like this.

I think it’s a special quality that — at Berkshire. I think other people would hire some group to put on the meeting and all be very professional and all of that. But I don’t think you can get — I don’t think you can buy the enthusiasm and energy and help-the-next-guy feeling that you’ve seen out on that exhibition floor, and you’ll see as you meet people here at the hall, and as you meet the people around Omaha. They’re very, very happy that you’re here.

6. Q&A Begins

WARREN BUFFETT: And with that, I would like to start on the questions. We’ll do it just as we’ve done it in recent years. We’ll start with the press group. They’ve received emails from a great many people — perhaps they can tell you how many — and selected the questions they think would be most useful to the Berkshire shareholders.

Yahoo is webcasting this as they’ve done for several years now, they’ve done a terrific job for us.

So, this meeting is going out, both in English and in Mandarin, and I hope our results translate well, or our — (laughs) our comments translate well. Sometimes we have trouble with English. But we’re going to — we’ll start in with Carol Loomis, my friend of 50 years, but you’ll never know it by the questions she’s going to ask me. (Laughter)

CAROL LOOMIS: I’m going to start, very briefly — this is for the benefit of people who send us questions next year. There are kind of two things that you get wrong a lot of the time. You can’t send two-part questions or three-part, et cetera. We need a one-part question. And the other thing is the questions all need to have some relevance to Berkshire, because Warren said when he started it that his hope was that shareholders would come out of the questions with a further education about the company. So, keep those in mind for next year.

7. Munger: “I predict we’ll get a little more liberal in repurchasing shares”

CAROL LOOMIS (RETIRED FORTUNE MAGAZINE EDITOR): Many people — a number of people — wrote me about repurchases of stock. And, hence, the question I picked for my first one.

The question, this particular question comes from Ward Cookie (PH), who lives in Belgium and who was still emailing me this morning in reference to the first quarter report.

And he asked, “My question concerns your repurchase of Berkshire shares. In the third quarter of last year, you spent almost 1 billion buying Berkshire B stock at an average price of $207.

“But then you got to a period between December 26th and April 11th when the stock languished for almost four months under 207. And yet, you purchased what I think of as a very limited amount of stock, even as you were sitting on an enormous pile of 112 billion.

“My question is why you did not repurchase a lot more stock? Unless, of course, there was for a time an acquisition of, say, 80 billion to 90 billion on your radar.”

WARREN BUFFETT: Yeah, the question — whether we had 100 billion or 200 billion would not make a difference — or 50 billion — would not make a difference in our approach to repurchase of shares.

We repurchase shares — we used to have a policy of tying it to book value. But that became — really became obsolete. It did not —

The real thing is to buy stock — repurchase shares — only when you think you’re doing it at a price where the remaining shareholders have had — are worth more the moment after you repurchased it than they were the moment before.

It’s very much like if you were running a partnership and you had three partners in it and the business was worth 3 million, and one of the partners came and said, “I’d like you to buy back my share of the partnership for a billion” — I started out with millions, so I’ll stay with millions — “for $1.1 million?” And we said, “Forget it.” And if he said, “1 million?” we’d probably say, “Forget it,” unless — and if he said, “900,000,” we’d take it because, at that point, the remaining business would be worth 2-million-1, and we’d have two owners, and our interest in value would have gone from a million to a million and fifty-thousand.

So, it’s very simple arithmetic. Most companies adopt repurchase programs and they just say, “We’re going to spend so much.” That’s like saying, you know, “We’re going to buy XYZ stock, and we’re going to spend so much here.” “We’re going to buy a company.” “We’re going to spend whatever it takes.”

We will buy stock when we think it is selling below a conservative estimate of its intrinsic value. Now, the intrinsic value is not a specific point, it’s probably a range in my mind that might have a band maybe of 10 percent. Charlie would have a band in his mind, and it would probably be 10 percent. And ours would not be identical, but they’d be very close. And sometimes he might figure a bit higher than I do, a bit lower.

But we want to be sure, when we repurchase shares, that those people who have not sold shares are better off than they were before we repurchased them. And it’s very simple.

And in the first quarter of the year, they’ll find we bought something over a billion worth of stock, and that’s nothing like my ambitions. But it — what that means is that we feel that we’re OK buying it, but we don’t salivate over buying it.

We think that the shares we repurchased in the first quarter leave the shareholders better off than if we hadn’t — the remaining shareholders — better off than if we hadn’t bought it. But we don’t think the difference is dramatic.

And you will — you could easily see periods where we would spend very substantial sums if we thought the stock was selling at, say, 25 or 30 percent less than it was worth, and we didn’t have something else that was even better.

But we have no ambition in any given quarter to spend a dime unless we think you’re going to be better off for us having done so. Charlie?

CHARLIE MUNGER: Well, I predict that we’ll get a little more liberal in repurchasing shares. (Laughter)

WARREN BUFFETT: I was going to give you equal time, but then — (Laughter)

8. BNSF may adopt “precision-scheduled railroading”

WARREN BUFFETT: OK, Jon Brandt.

JONATHAN BRANDT (RESEARCH ANALYST, RUANE, CUNNIFF & GOLDFARB): Hi, Warren and Charlie. Thanks for having me, as always.

Every major North American railroad other than Burlington Northern has adopted at least some aspects of precision-scheduled railroading, generally to good effect to their bottom line.

Some believe that point-to-point schedule service and minimal in-transit switching is good for both returns on capital and customer service.

Others believe precision railroading has done little for on-time performance, and its rigidity has jeopardized the compact that railroads have had with both regulators and customers.

Do you and current BNSF management believe that it’s now a good idea for BNSF to adopt precision railroading playbook? Or do you agree with its critics?

WARREN BUFFETT: Yeah, precision railroading, as it’s labeled, was probably invented by a fellow named Hunter Harrison. I think maybe he was at the Illinois Central Railroad at the time; there’s a book that came out about Hunter, who died maybe a year ago or thereabouts. And it describes the — his procedure toward railroading. It’s an interesting read if you’re interested in railroading.

And he took that to Canadian National, CN. There are six big railroads in North America, and he took that to CN, and he was very successful.

And actually, Bill Gates is probably the largest holder of CN, and I think he’s done very well with that stock.

And then later, Canadian Pacific was the subject of an activist, and when they — as they proceeded, they got Hunter to join them and brought in an associate, Keith Creel, who — and they instituted a somewhat similar program. Now the same thing has happened at CSX.

And all of those companies dramatically improved their profit margins, and they had varying degrees of difficulty with customer service in the implementing of it.

But I would say that we watch very carefully — Union Pacific is doing a somewhat modified version. But the — we are not above copying anything that is successful. And I think that there’s been a good deal that’s been learned by watching these four railroads, and we will — if we think we can serve our customers well and get more efficient in the process, we will adopt whatever we observe.

But we don’t have to do it today or tomorrow, but we do have to find something that gets at least equal, and hopefully better, customer satisfaction and that makes our railroad more efficient. And there’s been growing evidence that — from the actions of these other four railroads — there’s been growing evidence that we can learn something from what they do. Charlie?

CHARLIE MUNGER: Well, I doubt that anybody is very interested in un-precision in railroading. (Laughter)

WARREN BUFFETT: Well, Jonny, has Charlie answered your question? (Laughter)

JONATHAN BRANDT: Yes, thank you.

9. BNSF trying to improve energy efficiency

WARREN BUFFETT: OK. Station number 1, from the shareholder group up on my far right.

AUDIENCE MEMBER: Good morning. My name is Bill Moyer and I’m from Vashon Island, Washington. And I’m part of a team called “The Solutionary Rail Project.”

Interestingly, only 3.5 percent of the value of freight in the U.S. moves on trains. Berkshire Hathaway is incredibly well positioned with its investments in the northern and southern trans-con through BNSF to grab far more of that freight traffic off of the roads and get diesel out of our communities, as well as harness transmission corridors for your Berkshire renewable energy assets, for which you’re obviously very proud.

Would you consider meeting with us to look at a proposal for utilizing your assets and leveraging a public/private partnership to electrify your railroads and open those corridors for a renewable energy future?

WARREN BUFFETT: No, I — we’ve examined a lot of things in terms of LNG. I mean, they’re — obviously, we want to become more energy efficient, as well as just generally efficient.

And I’m not sure about the value of freight. You mentioned 3 1/2 percent. I believe — I mean, I’m not sure what figure you’re using as the denominator there.

Because if you look at movement of traffic by ton miles, rails are around 40 percent of the U.S. — we’re not talking local deliveries or all kinds of things like that — but they’re 40 percent, roughly, by rail.

And BNSF moves more ton miles than any other entity. We move 15 percent-plus of all the ton miles moved in the United States.

But if you take trucking, for example, on intermodal freight, we’re extremely competitive on the longer hauls, but the shorter the haul, the more likely it is that the flexibility of freight, where a truck can go anyplace and we have rails. So, the equation changes depending on distance hauled and other factors, but distance hauled is a huge factor.

We can move a ton mile 500 — we can move 500-plus ton miles of freight for one gallon of diesel. And that is far more efficient than trucks.

So, the long-haul traffic, and the heavy traffic, is going to go to the rails, and we try to improve our part of the equation on that all the time.

But if you’re going to transport something ten or 20 or 30 miles between a shipper and a receiver, and they’re — you’re not going to move that by rail.

So, we look at things all the time, I can assure you.

Carl Ice is in — well, he’s probably here now, and he’ll be in the other room — and he’s running the railroad. You’re free to talk to him, but I don’t see any breakthrough like you’re talking about. I do see us getting more efficient year-by-year-by-year.

And obviously, if driverless trucks become part of the equation, that moves things toward trucking. But on long-haul, heavy stuff, and there’s a lot of it, you’re looking at the railroad that carries more than any other mode of transportation. And BNSF is the leader. Charlie?

CHARLIE MUNGER: Well, over the long term, our questioner is on the side of the angels. Sooner or later, we’ll have it more electrified. I think Greg (Abel) will decide when it happens.

WARREN BUFFETT: Yeah. But we’re all working on the technology but —

And we’re considerably more efficient than ten, 20, 30 years ago, if you look at the numbers. But it —

One interesting figure, I think right after World War II, when the country probably had about 140 million people against our 330 million now, so we had 40 percent of the population. We had over a million-and-a-half people employed in the railroad industry. Now there’s less than 200,000 and we’re carrying a whole lot more freight.

Now, obviously there’s some change in passengers. But the efficiency of the railroads compared to — and the safety — compared to what it was even immediately after World War II has improved dramatically. Charlie, anything more?

CHARLIE MUNGER: No.

10. Bank CEOS who make bad mistakes should lose all their net worth

WARREN BUFFETT: OK, Becky?

BECKY QUICK (CNBC): This is a question that comes from Mike Hebel. He says, “The Star Performers Investment Club has 30 partners, all of whom are active or retired San Francisco police officers. Several of our members have worked in the fraud detail, and have often commented after the years-long fraudulent behavior of Wells Fargo employees, should have warranted jail sentences for several dozen, yet Wells just pays civil penalties and changes management.

“As proud shareholders of Berkshire, we cannot understand Mr. Buffett’s relative silence compared to his vigorous public pronouncement many years ago on Salomon’s misbehavior. Why so quiet?”

WARREN BUFFETT: Yeah, I would say this. The — (applause) — problem, well, as I see it — although, you know, I have read no reports internally or anything like that — but it looks like to me like Wells made some big mistakes in what they incentivized. And as Charlie says, there’s nothing like incentives, but they can incentivize the wrong behavior. And I’ve seen that a lot of places. And that clearly existed at Wells.

The interesting thing is, to the extent that they set up fake accounts, a couple million of them, that had no balance in them, that could not possibly have been profitable to Wells. So, you can incentivize some crazy things.

The problem is — I’m sure is that — and I don’t really have any inside information on it at all — but when you find a problem, you have to do something about it. And I think that’s where they probably made a mistake at Wells Fargo.

They made it at Salomon. I mean, John Gutfreund would never have played around with the government. He was the CEO of Salomon in 1991. He never would have done what the bond trader did that played around with the rules that the federal government had about government bond bidding.

But when he heard about it, he didn’t immediately notify the Federal Reserve. And he heard about it in late April, and May 15th, the government bond auction came along. And Paul Mozer did the same thing he’d done before, and gamed the auction.

And at this point, John Gutfreund — you know, the destiny of Salomon was straight downhill from that point forward. Because, essentially, he heard about a pyromaniac, and he let him keep the box of matches.

And at Wells, my understanding, there was an article in The Los Angeles Times maybe a couple years before the whole thing was exposed, and, you know, somebody ignored that article.

And Charlie has beaten me over the head all the years at Berkshire because we have 390,000 employees, and I will guarantee you that some of them are doing things that are wrong right now. There’s no way to have a city of 390,000 people and not need a policeman or a court system. And some people don’t follow the rules. And you can incentivize the wrong behavior. You’ve got to do something about it when it happens.

Wells has become, you know, exhibit one in recent years. But if you go back a few years, you know, you can almost go down — there’s quite a list of banks where people behaved badly. And where they — I would not say — I don’t know the specifics at Wells — but I’ve actually written in the annual report that they talk about moral hazard if they pay a lot of people.

The shareholders of Wells have paid a price. The shareholders of Citicorp paid a price. The shareholders of Goldman Sachs, the shareholders of Bank of America, they paid billions and billions of dollars, and they didn’t commit the acts. And of course, nobody did go — there were no jail sentences. And that is infuriating.

But the lesson that was taught was not that the government bailed you out because the government got its money back, but the shareholders of the various banks paid many, many billions of dollars.

And I don’t have any advice for anybody running a business except, when you find out something is leading to bad results or bad behavior, you know, you — if you’re in the top job, you’ve got to take action fast.

And that’s why we have hotlines. That’s why we get — when we get certain anonymous letters, we turn them over to the audit committee or to outside investigators.

And we will have — I will guarantee you that we will have some people who do things that are wrong at Berkshire in the next year or five years, ten years, and 50 years. It’s — you cannot have 390,000 people — and it’s the one thing that always worries me about my job, but — because I’ve got to hear about those things, and I’ve got to do something about them when I do hear about them. Charlie?

CHARLIE MUNGER: Well, I don’t think people ought to go to jail for honest errors of judgment. It’s bad enough to lose your job. And I don’t think that any of those top officers was deliberately malevolent in any way. I just — we’re talking about honest errors in judgment.

And I don’t think (former Wells Fargo CEO) Tim Sloan even committed honest errors of his judgment, I just think he was an accidental casualty that deserve the trouble. I wish Tim Sloan was still there.

WARREN BUFFETT: Yeah, there’s no evidence that he did a thing. But he stepped up to take a job that — where he was going to be a piñata, basically, for all kinds of investigations.

And rightfully, Wells should be checked out on everything they do. All banks should. I mean, they get a government guarantee and they receive trillions of dollars in deposits. And they do that basically because of the FDIC. And if they abuse that, they should pay a price.

If anybody does anything like a Paul Mozier did, for example, with Salomon, they ought to go to jail. Paul Mozier only went to jail for four months. But if you’re breaking laws, you should be prosecuted on it.

If you do a lot of dumb things, I wish they wouldn’t go away — the CEOs wouldn’t go away — so rich under those circumstances. But people will do dumb things. (Applause)

I actually proposed — think it may have been in one of the annual reports even. I proposed that, if a bank gets to where it needs government assistance, that basically the responsible CEO should lose his net worth and his spouse’s net worth. If he doesn’t want the job under those circumstances, you know (Applause)

And I think that the directors — I think they should come after the directors for the last five years — I think I proposed — of everything they’d received.

But it’s the shareholders who pay. I mean, if we own 9 percent of Wells, whatever this has cost, 9 percent of it is being borne by us. And it’s very hard to tie it directly.

One thing you should know, incidentally though, is that the FDIC, which was started — I think it was started January 1st, 1934 — but it was a New Deal proposal.

And the FDIC has not cost the United States government a penny. It now has about $100 billion in it. And that money has all been put in there by the banks. And that’s covered all the losses of the hundreds and hundreds and hundreds of financial institutions.

And I think the impression is that the government guarantee saved the banks, but the government money did not save the banks. The banks’ money, as an industry, not only has paid every loss, but they’ve accumulated an extra $100 billion, and that’s the reason the FDIC. assessments now are going back down. They had them at a high level. And they had a higher level for the very big banks.

When you hear all the talk about — the political talk — about the banks, they had not cost the federal government a penny. There were a lot of actions that took place that should not have taken place. And there’s a lot fewer now, I think, than there were in the period leading up to 2008 and ’09. But some banks will make big mistakes in the future. Charlie?

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

11. “We will spend a lot of money” on buybacks if price is right

WARREN BUFFETT: OK. Jay Gelb from Barclays. Barclays just had a proxy contest of sorts, didn’t it?

JAY GELB (INSURANCE ANALYST, BARCLAYS): That’s right, Warren. (Laughs)

I also have a question on Berkshire Hathaway — I’m sorry — on share buybacks.

Warren, in a recent Financial Times article, you were quoted as saying that the time may come when the company buys back as much as $100 billion of its shares, which equates to around 20 percent of Berkshire’s current market cap. How did you arrive at that $100 billion figure? And over what time frame would you expect this to occur?

WARREN BUFFETT: Yeah. I probably arrived at that $100 billion figure in about three seconds when I got asked the question. (Laughter)

It was a nice round figure and we could do it. And we would like to do it if the stock was — we’ve got the money to buy in $100 billion worth of stock.

And bear in mind, if we’re buying in $100 billion stock, it probably would be that the company wasn’t selling at 500 billion. So, it might buy well over 20 percent.

We will spend a lot of money. We’ve been involved in companies where the number of shares has been reduced 70 or 80 percent over time. And we like the idea of buying shares at a discount.

We do feel, if shareholders — if we’re going to be repurchasing shares from shareholders who are partners, and we think it’s cheap, we ought to be very sure that they have the facts available to evaluate what they own.

I mean, just as if we had a partnership, it would not be good if there were three partners and two of them decided that they would sort of freeze out the third, maybe in terms of giving him material information that they knew that that third party didn’t know.

So, it’s very important that our disclosure be the same sort of disclosure that I would give to my sisters who are the imaginary — they’re not imaginary — but they’re the shareholders to whom I address the annual report every year.

Because I do feel that you, if you’re going to sell your stock, should have the same information that’s important, that’s available to me and to Charlie.

But we will — if our stock gets cheap, relative to intrinsic value, we would not hesitate.

We wouldn’t be able to buy that much in a very short period of time, in all likelihood. But we would certainly be willing to spend $100 billion. Charlie?

CHARLIE MUNGER: I think when it gets really obvious, we’ll be very good at it. (Laughter)

WARREN BUFFETT: Let me get that straight. What’d you say, exactly?

CHARLIE MUNGER: When it gets really obvious, we’ll be very good at it.

WARREN BUFFETT: Oh, yeah. I was hoping that’s what you said. (Laughter)

Yeah, we will be good at it. We don’t have any trouble being decisive. We don’t say yes very often. But if it’s something obvious — I mean, Jay, if you and I are partners, you know, and our business is worth a million dollars and you say you’ll sell your half to me for 300,000, you’ll have your 300,000 very quickly.

12. Buying one share in an oil-rich duck hunting club

WARREN BUFFETT: OK, station two.

AUDIENCE MEMBER: Good morning. My name is Patrick Donahue from Eden Prairie, Minnesota, and I’m with my ten-year-old daughter, Brooke Donahue.

AUDIENCE MEMBER: Hi, Warren. Hi, Charlie.

WARREN BUFFETT: Hi. It’s Brooke, is it?

AUDIENCE MEMBER: It is.

WARREN BUFFETT: Yeah.

AUDIENCE MEMBER: First, I’m a proud graduate of Creighton University. And I need to say a personal thank you for coming over the years to share your insights. And it’s been a tradition since I graduated in 1999 to come to the annual meeting, and thank you for a lifetime of memories.

WARREN BUFFETT: Thank you. (Applause)

AUDIENCE MEMBER: Brooke is a proud Berkshire shareholder and read the letter and had some questions regarding investments that have been made in the past. And she had made some interesting comments about what she thought was a lot of fun.

So, our question for both of you is: outside of Berkshire Hathaway, what is the most interesting or fun personal investment you have ever made? (Laughter)

WARREN BUFFETT: Well, they’re always more fun when you make a lot of money off of them. (Laughter)

Well, one time, I bought one share of stock in the Atled Corp. That’s spelled A-T-L-E-D. And Atled had 98 shares outstanding and I bought one. And not what you call a liquid security. (Laughter)

And Atled happened to be the word “delta” spelled backwards. And a hundred guys in St. Louis had each chipped in 50 or $100 or something to form a duck club in Louisiana and they bought some land down there.

Two guys didn’t come up with their — there were a hundred of them — two of them defaulted on their obligation to come up with a hundred dollars — so there were 98 shares out. And they went down to Louisiana and they shot some ducks.

But apparently somebody shot — fired a few shots into the ground and oil spurted out. And — (laughter) — those Delta duck club shares — and I think the Delta duck club field is still producing. I bought stock in it 40 years ago for $29,200 a share.

And it had that amount in cash and it was producing a lot, and they sold it. If they kept it, that stock might’ve been worth 2 or $3 million a share, but they sold out to another oil company.

That was certainly — that was the most interesting —

Actually, I didn’t have any cash at the time. And I went down and borrowed the money. I bought it for my wife. And I borrowed the money. And the loan officer said, “Would you like to borrow some money to buy a shotgun as well?” (Laughter)

Charlie, tell them about the one you missed. (Laughter)

CHARLIE MUNGER: Well, I got two investments that come to mind. When I was young and poor, I spent a thousand dollars once buying an oil royalty that paid me 100,000 a year for a great many years. But I only did that once in a lifetime.

On a later occasion, I bought a few shares of Belridge Oil, which went up 30 times rather quickly. But I turned down five times as much as I bought. It was the dumbest decision of my whole life. So, if any of you have made any dumb decisions, look up here and feel good about yourselves. (Laughter)

WARREN BUFFETT: I could add a few, but — Andrew?

13. Buffett speaks for himself on politics, not for Berkshire

ANDREW ROSS SORKIN (NEW YORK TIMES/CNBC): Warren and Charlie, this is a question — actually, we got a handful of questions on this topic. This is probably the best formulation of it.

Warren, you have been a long-time, outspoken Democrat. With all the talk about socialism versus capitalism taking place among Democratic presidential candidates, do you anticipate an impact on Berkshire in the form of more regulations, higher corporate taxes, or even calls for breakups among the many companies we own if they were to win?

And how do you think about your own politics as a fiduciary of our company, and at the same time, as someone who has said that simply being a business leader doesn’t mean you’ve put your citizenship in a blind trust?

WARREN BUFFETT: Yeah. I have said that you do not put your citizenship in a blind trust. But you also don’t speak on behalf of your company. You do speak as a citizen if you speak. And therefore, you have to be careful about when you do speak, because it’s going to be assumed you’re speaking on behalf of your company.

Berkshire Hathaway certainly, in 54 years, has never — and will never — made a contribution to a presidential candidate. I don’t think we’ve made a contribution to any political candidate. But I don’t want to say, for 54 years, that — (Applause)

We don’t do it now. We operate in several regulated industries. And our railroad and our utility, as a practical matter, they have to have a presence in Washington or in the state legislatures in which they operate.

So, we have some — a few — I don’t know how many — political action committees which existed when we bought it — when we bought the companies at subsidiaries.

And I think, unquestionably, they make some contributions simply to achieve the same access as their competitors. I mean, if the trucking industry is going to lobby, I’m sure the railroad industry’s going to lobby.

But — the general — well, the rule is, I mean, that people do not pursue their own political interests with your money here.

We’ve had one or two managers over the years, for example, that would do some fundraising where they were fundraising from people who were suppliers of them or something of the sort. And if I ever find out about it, that ends promptly.

My position, at Berkshire, is not to be used to further my own political beliefs. But my own political beliefs can be expressed as a person, not as a representative of Berkshire, when a campaign is important.

I try to minimize it. But it’s no secret that in the last election, for example, I raised money.

I won’t give money to PACs. I accidentally did it one time. I didn’t know it was a PAC. But I don’t do it.

But I’ve raised substantial sums. I don’t like the way money is used in politics. I’ve written op-ed pieces for the New York Times in the past on the influence of money in politics.

I spent some time with John McCain many years ago before McCain-Feingold, on ways to try to limit it. But the world has developed in a different way.

14. Buffett: “I’m a card-carrying capitalist” but some regulations are needed

WARREN BUFFETT: On your question about the — I will just say I’m a card-carrying capitalist. (Applause)

But I — and I believe we wouldn’t be sitting here except for the market system and the rule of law and some things that are embodied in this country. So, you don’t have to worry about me changing in that manner.

But I also think that capitalism does involve regulation. It involves taking care of people who are left behind, particularly when the country gets enormously prosperous. But beyond that, I have no Berkshire podium for pushing anything. Charlie?

CHARLIE MUNGER: Well, I think we’re all in favor of some kind of a government social safety net in a country as prosperous as ours.

What a lot of us don’t like is the vast stupidity with which parts of that social safety net are managed by the government. It’d be much better if — (applause) — we could do it more wisely. But I think it also might be better if we did it more liberally.

WARREN BUFFETT: Yeah, one of the reasons we’re involved in this effort along with J.P. Morgan and Amazon — with (J.P. Morgan CEO) Jamie Dimon and (Amazon CEO) Jeff Bezos — on the medical question, is we do have as much money going — 3.3 or 3.4 trillion — we have as much money going to medical care as we have funding the federal government.

And it’s gone from 5 to 17 percent — or 18 percent — while actually the amount going to the federal government has stayed about the same at 17 percent.

So, we hope there’s some major improvements from the private sector because I generally think the private sector does a better job than the public sector in most things.

But I also think that if the private sector doesn’t do something, you’ll get a different sort of answer. And I’d like to think that the private sector can come up with a better answer than the public sector in that respect.

I will probably — it depends who’s nominated — but I voted for plenty of Republicans over the years. I even ran for delegate to the Republican National Convention in 1960. But — we are not —

I don’t think the country will go into socialism in 2020 or in 2040 or 2060.

15. We don’t try to push Berkshire stock higher or lower

WARREN BUFFETT: OK, Gregg Warren.

GREGG WARREN (FINANCIAL SERVICES ANALYST, MORNINGSTAR RESEARCH SERVICES): Warren, my first question, not surprisingly, is on share repurchases.

Stock buybacks in the open market are a function of both willing buyers and sellers. With Berkshire having two shares of classes, you should have more flexibility when buying back stock. But given the liquidity difference that exists between the two share classes — with an average of 313 Class A shares exchanging hands daily the past five years, equivalent to around $77 million a day, and an average of 3.7 million Class B shares doing the same, equivalent to around 622 million — Berkshire’s likely to have more opportunities to buy back Class B shares than Class A, which is exactly what we saw during the back half of last year and the first quarter of 2019.

While it might be more ideal for Berkshire to buy back Class A shares, allowing you to retire shares with far greater voting rights, given that there’s relatively little arbitrage between the two share classes and the number of Class B shares increase every year as you gift your Class A shares to the Bill and Melinda Gates Foundation and your children’s foundations, can we assume that you’re likely to be a far greater repurchaser of Class B shares, going forward, especially given your recent comments to the Financial Times about preferring to have loyal individuals on your shareholder list, which a price tag of $328,000 of Class A shares seems to engender?

WARREN BUFFETT: Yeah, we will - when we’re repurchasing shares, if we’re purchasing substantial amounts, we’re going to spend a lot more on the Class B than the Class A, just because the trading volume is considerably higher.

We may, from time to time — well, we got offered a couple blocks in history, going back in history from the Yoshi (PH) estate and when we had a transaction exchanging our Washington Post stock for both a television station and shares held — A shares — held by the Washington Post.

So, we may see some blocks of A. We may see some blocks of B. But there’s no question. If we are able to spend 25, 50, or a hundred billion dollars in repurchasing shares, more of the money is almost certainly going to be spent on the B than the A.

There’s no master plan on that other than to buy aggressively when we like the price. And as I say, the trading volume in the B is just a lot higher than the A in dollar amounts. Charlie?

CHARLIE MUNGER: I don’t think we care much which class we buy.

WARREN BUFFETT: Yeah. (Laughter)

We would like — we really want the stock — ideally, if we could do it if we were small — once a year we’d have a price and, you know, we’d do it like a private company. And it would be a fair price and people who want to get out could get out. And if other people wanted to buy their interest, fine. And if they didn’t, and we thought the price was fair, we’d have the company repurchase it.

We can’t do that. But that’s — we don’t want the stock to be either significantly underpriced or significantly overpriced. And we’re probably unique on the overpriced part of it. But we don’t want it.

I do not want the stock selling at twice what’s it worth because I’m going to disappoint people, you know. I mean, we can’t make it — there’s no magic formula to make a stock worth what it’s selling for, if it sells for way too much.

From a commercial standpoint, if it’s selling very cheap, we have to like it when we repurchase it.

But ideally, we would hope the stock would sell in a range that more or less is its intrinsic business value. We have no desire to hype it in any way. And we have no desire to depress it so we can repurchase it cheap. But the nature of markets is that things get overpriced and they get underpriced. And we will — if it’s underpriced, we’ll take advantage of it.

16. We welcome change, but we won’t always adapt to it

WARREN BUFFETT: OK, station 3.

AUDIENCE MEMBER: Hello Charlie Munger and Warren Buffett, (unintelligible). I am Terry (PH) from Shanghai (unintelligible), which aims to catch the best investment opportunities in that era.

So, my question is, as we all know, 5G is coming. It is said that the mode of all industry will be challenged in 5G era. So, what is the core competence that we should master, if (unintelligible) wants to catch the best investment opportunities in this era? Thank you.

WARREN BUFFETT: Well, there’s no core competence at the very top of Berkshire. (Laughter)

The subsidiaries that will be involved in developments relating to 5G, or any one of all kinds of things that are going to happen in this world, you know, the utility of LNG in the railroad, or all those kinds of questions, we have people in those businesses that know a lot more about them than we do.

And we count on our managers to anticipate what is coming in their business. And sometimes they talk to us about it. But we do not run that on a centralized basis.

And Charlie, do you want to have anything to add to that?

Do you know anything about 5G I don’t know? Well, you probably know a lot about 5G.

CHARLIE MUNGER: No, I know very little about 5G.

But I do know a little about China. And we have bought things in China. And my guess is we’ll buy more. (Laughter)

WARREN BUFFETT: Yeah. But I mean, we basically want to have a group of managers, and we do have a group of managers, who are on top of their businesses.

I mean, you saw something that showed BNSF and Berkshire Hathaway Energy and Lubrizol all aware of that. Those people know their businesses. They know what changes are likely to be had.

Sometimes, they find things that they can cooperate on between their businesses. But we don’t try to run those from headquarters.

And that may mean — that may have certain weaknesses at certain times. I think, net, it’s been a terrific benefit for Berkshire.

Our managers, to a great degree, own their businesses. And we want them to feel a sense of ownership. We don’t want them to be lost in some massive conglomerate, where they get directions from this group, which is a subgroup of that group.

And I could tell you a few horror stories from companies we bought, when they tell us about their experience under such an operation.

The world is going to change in dramatic ways. Just think how much it’s changed in the 54 years that we’ve had Berkshire. And some of those changes hurt us.

They hurt us in textiles. They hurt us in shoes. They hurt us in the department store business. Hurt us in the trading stamp business. These were the founding businesses of this operation. But we do adjust. And we’ve got a group, overall, of very good businesses.

We’ve got some that will be, actually, destroyed by what happens in this world. But that’s — I still am the card-carrying capitalist. And I believe that that’s a good thing, but you have to make changes.

We had 80 percent of the people working on farms in 1800. And if there hadn’t been a lot of changes, and you needed 80 percent of the people in the country producing the food and cotton we needed, we would have a whole different society.

So, we welcome change. And we certainly want to have managers that can anticipate and adapt to it. But sometimes, we’ll be wrong. And those businesses will wither and die. And we’d better use the money someplace else. Charlie? OK, Carol.

Charlie, you haven’t had any peanut brittle lately, you know. (Laughs)

17. Kraft Heinz is a good business, but we paid too much

CAROL LOOMIS: This question comes from Vincent James of Munich, Germany. “There has been a lot written about the recent impairment charge at Kraft Heinz. You were quoted as stating that you recognize that Berkshire overpaid for Kraft Heinz. Clearly, major retail chains are being more aggressive in developing house brands.

“In addition, Amazon has announced intentions to launch grocery outlets, being that, as Mr. Bezos has often stated, ‘Your margin is my opportunity.’ The more-fundamental question related to Kraft Heinz may be whether the advantages of the large brands and zero-based budgeting that 3G has applied are appropriate and defensible at all in consumer foods.

“In other words, will traditional consumer good brands, in general, and Kraft Heinz, in particular, have any moat in their future? My question is, to what extent do the changing dynamics in the consumer food market change your view on the long-term potential for Kraft Heinz?”

WARREN BUFFETT: Yeah, actually, what I said was, we paid too much for Heinz — I mean Kraft — I’m sorry — the Heinz part of the transaction, when we originally owned about half of Heinz, we paid an appropriate price there. And we actually did well. We had some preferred redeemed and so on.

We paid too much money for Kraft. To some extent, our own actions had driven up the prices.

Now, Kraft Heinz, the profits of that business, 6 billion — we’ll say very, very, very roughly, I’m not making forecasts — but 6 billion pretax on 7 billion of tangible assets, is a wonderful business. But you can pay too much for a wonderful business.

We bought See’s Candy. And we made a great purchase, as it turned out. And we could’ve paid more. But there’s some price at which we could’ve bought even See’s Candy, and it wouldn’t have worked. So, the business does not know how much you paid for it.

I mean, it’s going to earn based on its fundamentals. And we paid too much for the Kraft side of Kraft Heinz.

Additionally, the profitability has basically been improved in those operations over the way they were operating before.

But you’re quite correct that Amazon itself has become a brand. Kirkland, at Costco, is a $39 billion brand. All of Kraft Heinz is $26 billion. And it’s been around for — on the Heinz side — it’s been around for 150 years. And it’s been advertised — billions and billions and billions of dollars, in terms of their products. And they go through tens of thousands of outlets.

And here’s somebody like Costco, establishes a brand called Kirkland. And it’s doing 39 billion, more than virtually any food company. And that brand moves from product to product, which is terrific, if a brand travels. I mean, Coca Cola moves it from Coke to Cherry Coke and Coke Zero and so on.

But to have a brand that can really move — and Kirkland does more business than Coca Cola does. And Kirkland operates through 775 or so stores. They call them warehouses at Costco. And Coca Cola is through millions of distribution outlets.

So, brands — the retailer and the brands have always struggled as to who gets the upper hand in moving a product to the consumers.

And there’s no question, in my mind, that the position of the retailer, relative to the brands, which varies enormously around the world. In different countries, you’ve had 35 percent, even, maybe 40 percent, be private-label brands in soft drinks. And it’s never gotten anywhere close to that in the United States. So, it varies a lot.

But basically, retailers — certain retailers — the retail system — has gained some power. And particularly in the case of Amazon and Walmart and their reaction to it, and Costco — and Aldi and some others I can name — has gained in power relative to brands.

Kraft Heinz is still doing very well, operationally. But we paid too much. If we paid 50 billion, you know, it would’ve been a different business. It’d still be earning the same amount.

You can turn any investment into a bad deal by paying too much. What you can’t do is turn any investment into a good deal by paying little, which is sort of how I started out in this world.

But the idea of buying the cigar butts that are declining or poor businesses for a bargain price is not something that we try to do anymore. We try to buy good businesses at a decent price. And we made a mistake on the Kraft part of Kraft Heinz. Charlie?

CHARLIE MUNGER: Well, it’s not a tragedy that, out of two transactions, one worked wonderfully, and the other didn’t work so well. That happens.

WARREN BUFFETT: The reduction of costs, you know — there can always be mistakes made, when you’ve got places, and you’re reorganizing them to do more business with the same number of people.

And we like buying businesses that are efficient to start with. But the management — the operations — of Kraft Heinz have been improved over the present management overall. But we paid a very high price, in terms of the Kraft part. We paid an appropriate price, in terms of Heinz.

18. Internet competition for Berkshire’s furniture retailers

WARREN BUFFETT: Jonathan?

JONATHAN BRANDT: Internet-based furniture retailers, like Wayfair, appear willing to stomach large current losses acquiring customers in the hope of converting them to loyal online shoppers.

I’ve been wondering what this disruptive competition might do to our earnings from home-furnishing retail operations like Nebraska Furniture Mart.

If we have to transition to more of an online model, might we have to spend more heavily to keep shoppers without a corresponding increase in sales? The sharp decline in first-quarter earnings from home furnishings suggest, perhaps, some widening impact from intensifying competition.

Do you believe Wayfair’s customers first, profits later model is unsustainable? Or do you think our furniture earnings will likely be permanently lower than they were in the past?

WARREN BUFFETT: I think furnishings — the jury’s still out on that, whether the operations which have grown very rapidly in size but still are incurring losses, how they will do over time.

It is true that in the present market, partly because of some successes, like, most dramatically, Amazon, in the past, that investors are willing to look at losses as long as sales are increasing, and hope that there will be better days ahead.

We do a quite significant percentage of our sales online in the furniture operation. That might surprise you. We do the highest percentage in Omaha.

And what’s interesting is that we — I won’t give you the exact numbers, but it’s large — we do a significant dollar volume, but a very significant portion of that volume, people come to the store to pick up, so that they will order something from us online, but they don’t seem to mind at all — and they don’t have to do it — but they get a pick up at the store.

So, you know, you learn what customers like, just like people learned in fast food, you know, that people would buy a lot of food by going through a drive-in, that they don’t want to stop and go into the place. We learn about customer behavior as it unfolds.

But we did do, now — on Tuesday, we did 9.2 million of — or 9.3 million of profitable volume at the Nebraska Furniture Mart. And I think that company had paid-in capital of $2,500. And I don’t think anything’s been added since. So, it’s working so far.

The first quarter — It’s interesting — the first quarter was weak at all four of our furniture operations.

But there are certain other parts of the economy — well, just home building, generally — it’s considerably below what you would’ve expected, considering the recovery we have had from the 2008-9 period. I mean, if you look at single-family home construction, the model has shifted more to people living in apartment rentals.

I think it’s gone from 69-and-a-fraction percent. It got down to 63 percent. It’s bounced up a little bit. But people are just not building — or moving to houses as rapidly as I would have guessed they would have, based on figures prior to 2008 and ’09, and considering the recovery we’ve had, and considering the fact that money is so cheap. And that has some effect on our furniture stores.

But I think we’ve got a very good furniture operation, not only with the Nebraska Furniture Mart, but at other furniture operations. And we will see whether the models work over the long run.

But I think, you know, they have a reasonable chance. Some things people — we’re learning that people will buy some things that they’ve always gone to the mall or to a retail outlet to buy, that they will do it online. And others don’t work so well. Charlie?

CHARLIE MUNGER: I think that we’ll do better than most furniture retailers.

WARREN BUFFETT: I think that’s a certainty overall, overall. But we’ve got some good operations there.

But we don’t want to become a showroom for the online operations and have people come and look around the place and then order someplace else. So, we have to have the right prices. And we’re good at that at the Furniture Mart.

19. Pension funds should avoid “alternative” investments

WARREN BUFFETT: Station 4.

AUDIENCE MEMBER: Warren and Charlie, my name is Brent Muio. I’m from Winnipeg, Canada.

First, thank you for devoting so much time and energy to education. I’m a better investor because of your efforts. But more important, I’m a better partner, friend, son, brother, and soon-to-be first-time father.

There’s nothing more important than these relationships. And my life is better, because you’re willing to pass on your experience and wisdom.

My path into finance was unconventional. I worked as an engineer for 12 years, while two years ago, I began a career in finance, working for the Civil Service Superannuation Board, a $7 billion public pension fund in Winnipeg.

I work on alternative investments, which include infrastructure, private equity, and private credit. I go to work every day knowing that I’m there to benefit the hardworking current and future beneficiaries of the fund.

Like most asset classes, alternative purchase multiples have increased. More of these assets are funded with borrowed money. And the terms and covenants on this debt are essentially nonexistent.

With this in mind and knowing the constraints of illiquid, closed-end funds, please give me your thoughts on private, alternative investments, the relevancy in public pension funds, and your view on long-term return expectations.

WARREN BUFFETT: Yeah, if you leveraged up investments in just common stocks, and you’d figured a way so that you would have staying power, if there were any market dip, I mean, you’d obviously retain extraordinary returns.

I pointed out, in my investing lifetime, you know, if an index fund would do 11 percent, well, imagine how well you would’ve done if you’d leveraged that up 50 percent whatever the prevailing rates were over time.

So, a leveraged investment in a business is going to beat an unleveraged investment in a good business a good bit of the time. But as you point out, the covenants to protect debtholders have really deteriorated in the business. And of course, you’ve been in an upmarket for businesses. And you’ve got a period of low interest rates. So, it’s been a very good time for it.

My personal opinion is, if you take unleveraged returns against unleveraged common stocks, I do not think what is being purchased today and marketed today would work well.

But if you can borrow money, if you can buy assets that will yield 7 or 8 percent, you can borrow enough money at 4 percent or 5 percent, and you don’t have any covenants to meet, you’re going to have some bankruptcies. But you’re going to also have better results in many cases.

It’s not something that interests us at all. We are not going to leverage up Berkshire. If we’d leveraged up Berkshire, we’d have made a whole lot more money, obviously, over the years.

But both Charlie and I, probably, have seen some more high-IQ people — really extraordinarily high-IQ people — destroyed by leverage. We saw Long-Term Capital Management, where we had people who could do in their sleep math that we couldn’t do, at least I couldn’t do, you know, working full time at it during the day and, I mean, really, really smart people working with their own money and with years and years of experience of what they were doing.

And you know, it all turned to pumpkins and mice in 1998. And actually, it was a source of national concern, just a few hundred people. And then we saw some of those same people, after that happened to them once, go on and do the same thing again.

So, I would not get excited about so-called alternative investments. You can get all kinds of different figures. But there may be — there’s probably at least a trillion dollars committed to buying, in effect, buying businesses. And if you figure they’re going to leverage them, you know, two for one on that, you may have 3 trillion of buying power trying to buy businesses in — well, the U.S. market may be something over 30 trillion now — but there’s all kinds of businesses that aren’t for sale and that thing.

So, the supply-demand situation for buying businesses privately and leveraging them up has changed dramatically from what it was ten or 20 years ago.

And I’m sure it doesn’t happen with your Winnipeg operation, but we have seen a number of proposals from private equity funds, where the returns are really not calculated in a manner than — well, they’re not calculated in a manner that I would regard as honest.

And so I — it’s not something — if I were running a pension fund, I would be very careful about what was being offered to me.

If you have a choice in Wall Street between being a great analyst or being a great salesperson, salesperson is the way to make it.

If you can raise $10 billion in a fund, and you get a 1 1/2 percent fee, and you lock people up for ten years, you know, you and your children and your grandchildren will never have to do a thing, if you are the dumbest investor in the world. But —

Charlie?

CHARLIE MUNGER: Well, I think what we’re doing will work more safely than what he’s doing. And — but I wish him well.

WARREN BUFFETT: Yeah, Brent, you sound — actually, you sound like a guy that I would hope would be working for a public pension fund. Because frankly, most of the institutional funds, you know — well, we had this terrible — right here in Omaha — you can get a story of what happened with our Omaha Public Schools’ retirement fund. And they were doing fine until the manager started going in a different direction. And the trustees here — perfectly decent people — and the manager had done OK to that point, and —

CHARLIE MUNGER: Yeah, but they are smarter in Winnipeg than they are here.

WARREN BUFFETT: Yeah. Well — (Laughter)

CHARLIE MUNGER: That was pretty bad here.

WARREN BUFFETT: It’s not a fair fight, actually, usually, when a bunch of public officials are listening to people who are motivated to really just get paid for raising the money. Everything else is gravy after that.

But if you run a fund, and you get even 1 percent of a billion, you’re getting $10 million a year coming in. And if you’ve got the money locked up for a long time, it’s a very one-sided deal.

And you know, I’ve told the story of asking the guy one time, in the past, “How in the world can you — why in the world can you ask for 2-and-20 when you really haven’t got any kind of evidence that you are going to do better with the money than you do in an index fund?” And he said, “Well, that’s because I can’t get 3-and-30,” you know. (Laughter)

CHARLIE MUNGER: What I don’t like about a lot of the pension fund investments is I think they like it because they don’t have to mark it down as much as it should be in the middle of the panics. I think that’s a silly reason to buy something. Because you’re given leniency in marking it down.

WARREN BUFFETT: Yeah. And when you commit the money — in the case of private equity often — you — they don’t take the money, but you pay a fee on the money that you’ve committed.

And of course, you really have to have that money to come up with at any time. And of course, it makes their return look better, if you sit there for a long time in Treasury bills, which you have to hold, because they can call you up and demand the money, and they don’t count that.

They count it in terms of getting a fee on it. But they don’t count it in terms of what the so-called internal rate of return is. It’s not as good as it looks. And I really do think that when you have a group sitting as a state pension fund —

CHARLIE MUNGER: Warren, all they’re doing is lying a little bit to make the money come in.

WARREN BUFFETT: Yeah. Yeah, well, that sums it up. (Laughter)

20. Amazon buy doesn’t mean portfolio managers aren’t “value” investors

WARREN BUFFETT: Becky?

BECKY QUICK: This question is from Ken Skarbeck in Indianapolis. He says, “With the full understanding that Warren had no input on the Amazon purchase, and that, relative to Berkshire, it’s likely a small stake, the investment still caught me off guard.

“I’m wondering if I should begin to think differently about Berkshire looking out, say, 20 years. Might we be seeing a shift in investment philosophy away from value-investing principles that the current management has practiced for 70 years?

“Amazon is a great company. Yet, it would seem its heady shares ten years into a bull market appear to conflict with being fearful when others are greedy. Considering this and other recent investments, like StoneCo, should we be preparing for change in the price-versus-value decisions that built Berkshire?”

WARREN BUFFETT: Yeah. It’s interesting that the term “value investing” came up. Because I can assure you that both managers who — and one of them bought some Amazon stock in the last quarter, which will get reported in another week or ten days — he is a value investor.

The idea that value is somehow connected to book value or low price/earnings ratios or anything — as Charlie has said, all investing is value investing. I mean, you’re putting out some money now to get more later on. And you’re making a calculation as to the probabilities of getting that money and when you’ll get it and what interest rates will be in between.

And all the same calculation goes into it, whether you’re buying some bank at 70 percent of book value, or you’re buying Amazon at some very high multiple of reported earnings.

Amazon — the people making the decision on Amazon are absolutely as much value investors as I was when I was looking around for all these things selling below working capital, years ago. So, that has not changed.

The two people — one of whom made the investment in Amazon — they are looking at many hundreds of securities. And they can look at more than I can, because they’re managing less money. And their universe — possible universes — is greater.

But they are looking for things that they feel they understand what will be developed by that business between now and Judgement Day, in cash.

And it’s not — current sales can make some difference. Current profit margins can make some difference. Tangible assets, excess cash, excess debt, all of those things go into making a calculation as to whether they should buy A versus B versus C.

And they are absolutely following value principles. They don’t necessarily agree with each other or agree with me. But they are very smart. They are totally committed to Berkshire. And they’re very good human beings, on top of it.

So, I don’t second guess them on anything. Charlie doesn’t second guess me. In 60 years, he’s never second guessed me on an investment.

And the considerations are identical when you buy Amazon versus some, say, bank stock that looks cheap, statistically, against book value or earnings or something of the sort.

In the end, it all goes back to Aesop, who, in 600 B.C., said, you know, that a bird in the hand is worth two in the bush.

And when we buy Amazon, we try and figure out whether the — the fellow that bought it — tries to figure out whether there’s three or four or five in the bush and how long it’ll take to get to the bush, how certain he is that he’s going to get to the bush, you know, and then who else is going to come and try and take the bush away and all of that sort of thing. And we do the same thing.

And it really, despite a lot of equations you learn in business school, the basic equation is that of Aesop. And your success in investing depends on how well you were able to figure out how certain that bush is, how far away it is, and what the worst case is, instead of two birds being there, and only one being there, and the possibilities of four or five or ten or 20 being there.

And that will guide me. That will guide my successors in investment management at Berkshire. And I think they’ll be right more often than they’re wrong. Charlie?

CHARLIE MUNGER: Well I — Warren and I are a little older than some people, and —

WARREN BUFFETT: Damn near everybody. (Laughs)

CHARLIE MUNGER: And we’re not the most flexible, probably, in the whole world. And of course, if something as extreme as this internet development happens, and you don’t catch it, why, other people are going to blow by you.

And I don’t mind not having caught Amazon early. The guy is kind of a miracle worker. It’s very peculiar. I give myself a pass on that.

But I feel like a horse’s ass for not identifying Google better. I think Warren feels the same way.

WARREN BUFFETT: Yeah.

CHARLIE MUNGER: We screwed up.

WARREN BUFFETT: He’s saying we blew it. (Laughter)

And we did have some insights into that, because we were using them at GEICO, and we were seeing the results produced. And we saw that we were paying $10 a click, or whatever it might’ve been, for something that had a marginal cost to them of exactly zero. And we saw it was working for us. So —

CHARLIE MUNGER: We could see in our own operations how well that Google advertising was working. And we just sat there sucking our thumbs. (Laughter)

So, we’re ashamed. We’re trying to atone. (Laughter)

Maybe Apple was atonement. (Laughter)

WARREN BUFFETT: When he says, “Sucking our thumbs,” I’m just glad he didn’t use some other example. (Laughter)

21. Buffett: Berkshire insurance businesses are worth more than you think

WARREN BUFFETT: OK, Jay?

JAY GELB: This question is on Berkshire’s intrinsic value. Warren, in your most-recent annual letter, you discussed a methodology to estimate Berkshire’s intrinsic value. However, a major component of Berkshire’s value that many investors find challenging to estimate is that of the company’s vast and unique insurance business.

Could you discuss how you value the company’s insurance unit, based on information Berkshire provides, especially since GAAP book value is not disclosed, of the insurance unit?

WARREN BUFFETT: Well, our insurance business gives us a float that’s other people’s money, which we’re temporarily holding, but which gets regenerated all the time, so as a practical matter, it has a very, very long life. And it’s probably a little more likely to grow than shrink.

So, we have $124 billion that people have given us. And that’s somewhat like having a bank that just consists of one guy. And people come in and deposit $124 billion and promise not to withdraw it forever.

And we’ve got a very good insurance business. It’s taken a very long time to develop it, very long time. In fact, I think we probably have the best property-casualty operation, all things considered, in the world, that I know of, of any size. So, it’s worth a lot of money.

It’s probably — we think it’s worth more to us, and we particularly think it’s worth more while lodged inside Berkshire. We’d have a very, very high value on that. I don’t want to give you an exact number, because I don’t know the exact number. And any number I would have given you in the past would’ve turned out to be wrong, on the low side.

We have managed to earn money on money that was given to us for nothing and have (inaudible) earnings from underwriting and then have these large earnings from investing. And it’s an integral part of Berkshire.

There’s a certain irony to insurance that most people don’t think about. But if you really are prepared, and you have a diversified property-casualty insurance business — a lot of property business in it — if you’re really prepared to pay your claims under any circumstances that come along in the next hundred years, you have to have so much capital in the business that it’s not a very good business.

And if you really think about a worst-case situation, the reinsurance — that’s insurance you buy from other people, as an insurance company, to protect you against the extreme losses, among other things — that reinsurance probably — could likely be — not good at all.

So, even though you’d think you’re laying off part of the risk, if you really take the worst-case examples, you may well not be laying off the risk. And if you keep the capital required to protect against that worst-case example, you’ll have so much capital in the business that it isn’t worthwhile.

Berkshire is really the ideal form for writing the business. Because we have this massive amount of assets that, in many cases, are largely uncorrelated with natural disasters. And we can — we don’t need to buy reinsurance from anybody else. And we can use the money in a more efficient way than most insurance companies.

It’s interesting. The three — In the last 30 years, the three largest reinsurance companies — and I’m counting Lloyd’s as one company — although it isn’t — it’s a group of brokers assembled in — underwriters assembled at a given location. But people think of Lloyd’s as a massive reinsurance market, which it is, not technically one entity. But if you take the three largest companies — and they’re all in fine shape now, they’re first-class operations — but all three of them came close to extinction sometime in the last 30 years, or reasonably close.

And we didn’t really have any truly extraordinary natural catastrophes. The worst we had was Katrina in, whatever it was, 2006 or thereabouts, 2005. But we didn’t have any worst-case situation. And all three of those companies, which everybody looks at as totally good on the asset side, if you show a recoverable from them, two of the three actually made some deals with us to help them in some way. And they’re all in fine shape now.

But it’s really not a good business if you keep your — as a standalone insurer — if you keep enough capital to really be sure you can pay anything that comes along, under any kind of conditions.

And Berkshire can do that. And it can use the money in ways that it likes to use.

So, it’s a very valuable asset. I don’t want to give you a figure on it. But we would not sell it. We certainly wouldn’t want to sell it for its float value. And that float is shown on the balance sheet as a liability. So, it’s extraordinary.

And it’s taken a long time to build. It’d be very, very, very hard for anybody to — I don’t think they could build anything like it. It just takes so long.

And we continue to plow new ground. If you went in the next room, you would’ve seen something called “THREE,” which is our movement toward small and medium business owners for commercial insurance. And there’s an online operation.

And it will take all kind — we’ll do all kinds of mid-course adjusting and that sort of thing — and we’ve only just started up in four states.

But we’ll, you know — ten or 20 years from now, that will be a significant asset of Berkshire, just like Geico has grown from two and a fraction billion of premium to, you know, who knows, but well into the mid-30 billion, just with Tony Nicely. And when I said, in the annual report, that Tony Nicely, who’s here today —

CHARLIE MUNGER: Warren, is there anybody in the world who has a big casualty insurance business that you’d trade our business for theirs?

WARREN BUFFETT: Yeah, oh, no, it’s taken a long time. And it’s taken some tremendous people. And Tony Nicely has created more than 50 billion — with his associates, and he’s got 39,000 of them, probably more now, because he’s growing this year — he’s created more than $50 billion at GEICO — of value — for Berkshire. (Applause)

CHARLIE MUNGER: It’s pretty much what you’d expect. It’s such an easy business, taking in money now in cash and just keeping the books and giving a little of it back.

There’s a lot of stupidity that gets into it. And if you’re not way better than average at it, you’re going to lose money in the end. It’s a mediocre business for most people. And it’s good at Berkshire only because we’re a lot better at it. And if we ever stop being a lot better at it, it wouldn’t be safe for us, either.

WARREN BUFFETT: And Ajit Jain has done a similar thing. He’s done it in a variety of ways within the insurance business. But I would not want to undo — somebody would have to give me more than $50 billion to undo everything he has produced for Berkshire.

And he walked into my office on a Saturday in the mid-1980s. He’d never been in the insurance business before. And I don’t think there’s anybody in the insurance world that doesn’t wish that he’d walked into their office instead of ours, at Berkshire. It’s been extraordinary. It’s truly been extraordinary.

But we have Tom Nerney. We have Tim Kenesey at MedPro. We have Tom Nerney at U.S. Lability.

We have — at GUARD Insurance — we only bought that a few years ago, and that’s a terrific operation. It’s based in Wilkes-Barre, Pennsylvania. Who would expect to find a great insurance operation in Wilkes-Barre?

But we’ve got a great insurance — really great — insurance operation right here in Omaha, about two miles from here. And it was bought by us in 1967. And you know, it changed Berkshire. We built on that base.

We’ve got a — we really got a great insurance business. And I won’t give you a number, but it’s probably a bigger number than you’ve got in your head for — and it’s worth more within Berkshire than it would be worth as an independent operation.

Somebody can say, “Well, this little gem, if it was put out there, would sell at a higher multiple,” or something of the sort. It works much better as being part of a whole, where we have had two tiny operations — two tiny insurance operations — many, many years ago. And they both went broke. The underwriting was bad. But we paid all the claims. We did not walk away. We paid every dime of claims.

And nobody worries about doing any kind of financial transaction with Berkshire. And you know that today — on Saturday — about 9 in the morning, I got a phone call. And we made a deal the next day committing Berkshire to pay out $10 billion, come hell or high water, no outs for, you know, material adverse change or anything like that. And people know we’ll be there with $10 billion.

And they know, in the insurance business, when we write a policy that may come — be payable during the worst catastrophe in history, or may be payable 50 years from now, they know Berkshire will pay. And that’s why we’ve got $124 billion of float.

22. “Don’t go overboard on delayed gratification”

WARREN BUFFETT: OK, station 5.

AUDIENCE MEMBER: Hey, Warren and Charlie. I’m Neel Noronha. I’m 13 years old and from San Francisco.

I feel like I see you in our living room a lot. My dad is constantly playing these videos of you at these meetings. And he teaches me a lot of lessons about you guys. But many of them require the delayed gratification skill. (Laughter)

I want to know, is there any way that kids can develop the delayed gratification skill? (Laughter and applause)

CHARLIE MUNGER: I’ll take it, if you want me to, Warren.

WARREN BUFFETT: Go to it.

CHARLIE MUNGER: I’ll take that, because I’m a specialist in delayed gratification. I’ve had a lot of time to delay it. (Laughter)

And my answer is that they sort of come out of the womb with the delayed gratification thing, or they come out of the womb where they have to have everything right now. And I’ve never been able to change them at all. So, we identify it. We don’t train it in.

WARREN BUFFETT: Charlie’s had eight children, so he’s become more and more of a believer in nature versus nurture. (Laughter)

CHARLIE MUNGER: You’ll probably see some nice, old woman of about 95 out there, in threadbare clothing. And she’s delaying gratification right to the end and probably has 4,000 A shares. (Laughter)

It’s just these second- and third-generation types that are buying all the jewelry.

WARREN BUFFETT: It’s interesting. If you think about — we’ll take it to a broader point. But if you think of a 30-year government bond paying 3 percent, and you allow for, as an individual, paying some taxes on the 3 percent you’ll receive, and you’ll have the Federal Reserve Board saying that their objective is to have 2 percent inflation, you’ll really see that delayed gratification, if you own a long government bond, is that, you know, you get to go to Disneyland and ride the same number of rides 30 years from now that you would if you did it now.

The low interest rates, for people who invest in fixed-dollar investments, really mean that you really aren’t going to eat steak later on if you eat hamburgers now, which is what I used to preach to my wife and children and anybody else that would listen, many years ago. (Laughs)

So, it’s — I don’t necessarily think that, for all families, in all circumstances, that saving money is necessarily the best thing to do in life. I mean, you know, if you really tell your kids they can —whatever it may be — they never go to the movies, or we’ll never go to Disneyland or something of the sort, because if I save this money, 30 years from now, you know, well, we’ll be able to stay a week instead of two days.

I think there’s a lot to be said for doing things that bring you and your family enjoyment, rather than trying to save every dime.

So, I — delayed gratification is not necessarily an unqualified course of action under all circumstances. I always believed in spending two or three cents out of every dollar I earn and saving the rest. (Laughter)

But I’ve always had everything I wanted. I mean, one thing you should understand, if you aren’t happy having $50,000 or a hundred-thousand dollars, you’re not going to be happy if you have 50 million or a hundred million.

I mean, a certain amount of money does make you feel — and those around you — feel better, just in terms of being more secure, in some cases.

But loads and loads of money — I probably know as many rich people as just about anybody. And I do not — I don’t think they’re happier because they get super rich. I think they are happier when they don’t have to worry about money.

But you don’t see a correlation between happiness and money, beyond a certain place. So, don’t go overboard on delayed gratification. (Applause)

23. Munger on succession: “You’re just going to have to endure us”

WARREN BUFFETT: Andrew?

ANDREW ROSS SORKIN: This question comes from a shareholder of yours for more than 20 years, who asked to remain anonymous, but wanted me to start by saying, “Warren and Charlie, I want to preface this question by saying it comes from a place of love for both of you and the beautiful painting you’ve drawn for us in the form of Berkshire.”

WARREN BUFFETT: But. (Laughter)

ANDREW ROSS SORKIN: “Now, please update us on succession planning. And as you think about succession, would you ever consider having Greg (Abel) and Ajit (Jain) join you onstage at future annual meetings and allow us to ask questions of them and Ted and Todd, as well, so we can get a better sense of their thinking?”

WARREN BUFFETT: That’s probably a pretty good idea. And we’ve talked about it. (Applause)

We have Greg and Ajit here. And any questions that anybody wants to direct to them, it’s very easy to move them over.

So, we thought about having four of us up here. And this format is not set in stone at all.

Because you — I can tell you that, actually, the truth is, Charlie and I are afraid of looking bad. Those guys are better than we are. (Laughs)

You could not have two better operating managers than Greg and Ajit. I mean, they are — it is just fantastic, what they accomplished.

They know the businesses better. They work harder, by far. And you are absolutely invited to ask questions to be directed over to them at this meeting. I don’t think —

Yeah, this format will not be around forever. And if it’s better to get them up on the stage, we’ll be happy to do it.

Ted (Weschler) and Todd (Combs), they’re basically not going to answer investment questions. We regard investment decisions as proprietary, basically. They belong to Berkshire. And we are not an investment advisory organization. So, that is counter to the interests of Berkshire for them to be talking about securities they own. It’s counter to the interests of Berkshire for Charlie or me to be doing it.

We’ve done better because we don’t publish every day what we’re buying and selling. I mean, if somebody’s working on a new product at Apple, or somebody’s working on a new drug or they’re assembling property or something of the sort, they do not go out and tell everybody in the world exactly what they’re doing every day.

And we’re trying to generate ideas in investment. And we do not believe in telling the world what we’re doing every day, except to the extent that we’re legally required. But it’s a good idea. Charlie?

CHARLIE MUNGER: Well, one of the reasons we have trouble with these questions is because Berkshire is so very peculiar. There’s only one thing like it.

We have a different kind of unbureaucratic way of making decisions. There aren’t any people in headquarters. We don’t have endless committees deliberating forever and making bad decisions. We just — we’re radically different. And it’s awkward being so different. But I don’t want to be like everybody else, because this has worked better. So, I think you’re just going to have to endure us. (Laughter and applause)

WARREN BUFFETT: We do think that it’s a huge corporate asset, which may only surface very occasionally and depending very much on how the world is around us. But to be the one place, I think, in the world, almost, where somebody can call on a Saturday morning and meet on Sunday morning and have a $10 billion commitment.

And nobody in the world doubts whether that commitment will be upheld. And it’s not subject to any kind of welching on the part of the company that’s doing it. It’s got nothing involved over than Berkshire’s word. And that’s an asset that, every now and then, will be worth a lot of money to Berkshire. And I don’t really think it will be subject to competition.

So — and Ted and Todd, in particular, are an additional pipeline, and have proven to be an additional pipeline, in terms of facilitating the exercise of that ability. I mean they — things come in through them that, for one reason or another, I might not hear about otherwise.

So, they have expanded our universe. In the markets we’ve had in recent years, that hasn’t been important. I can see periods where they would be enormously valuable. Just take the question that was raised by the fellow from Winnipeg about weak covenants and bonds.

I mean, we could have a situation — who knows when, who knows where, or who knows whether — but we could have a situation where there could be massive defaults in the junk-bond-type market. We’ve had those a couple times. And we made a fair amount of money off of them.

But Ted and Todd would multiply our effectiveness in a big way, if such a period comes along, or some other types of periods come along. They are very, very, very useful to Berkshire.

The call happened to come in on Friday from Brian Moynihan, CEO of Bank of America. And he’s done an incredible job. But we have a better chance of getting more calls and having them properly filtered and everything — appropriately filtered — the next time conditions get chaotic than we did last time. And that’s important.

Charlie?

CHARLIE MUNGER: Well, I do think it’s true that if the world goes to hell in a hand basket, that you people will be in the right company. We’ve got a lot of cash and we know how to behave well in a panic. And if the world doesn’t go to hell, are things so bad now?

24. Munger invited to happy hour by the bitcoin people

CHARLIE MUNGER: And I also want to report that your vice chairman is getting new social distinction.

I’ve been invited during this gathering to go to a happy hour put on by the bitcoin people. (Laughter)

And I’ve tried to figure out what the bitcoin people do in their happy hour, and I finally figured it out. They celebrate the life and work of Judas Iscariot. (Laughter)

CHARLIE MUNGER: Is your invitation still good? (Laughter)

WARREN BUFFETT: Bitcoin — actually — on my honeymoon in 1952, my bride, 19, and I, 21 — stopped in Las Vegas. We just got in — my aunt Alice gave me the car and said, “Have a good time,” and we went west.

So, we stopped in the Flamingo, and I looked around, and I saw all of these well-dressed — they dressed better in those days — well-dressed people who had come, in some cases, from thousands of miles away. And this was before jets, so transportation wasn’t as good.

And they came to do something that every damn one of them knew was mathematically dumb. And I told Susie, I said, “We are going to make a lot of money.” (Laughter)

I mean, imagine people going to stick money on some roulette number with a zero and a double-zero there and knowing the percent. They all could do it, and they — they just do it. And I have to say, bitcoin has rejuvenated that feeling in me. (Laughter)

25. Berkshire will probably increase stakes above 10% if regulations are eased

WARREN BUFFETT: OK, Gregg?

GREGG WARREN: Warren and Charlie. While I understand Berkshire’s need to trim its stake in Wells Fargo and any other banks you hold, each year, in order to bring Berkshire’s ownership stake below the 10 percent threshold required by the Federal Reserve for bank holdings, given the ongoing share repurchase activity that’s taking place in the industry.

I was kind of surprised, though, to see you move to trim all of your holdings, where possible, on a regular basis to eliminate the regulatory requirements that come with ownership levels above 10 percent, which in my view limits the investment universe that Berkshire, or at least Warren, can meaningfully invest in longer term, given that Warren manages a large chunk of Berkshire’s $200 billion equity portfolio.

Could you elaborate more on the regulatory impact for Berkshire of holding more than 10 percent of any company’s stock, as well as how you feel about the Fed’s recent proposal to allow investors like Berkshire to own up to 25 percent shares of a bank without triggering more restrictive rules and oversight?

Basically, if that proposal were to come to fruition, would you be willing to forego that 10 percent threshold self-imposed that you’ve done, and put money to work in names that you’re already fairly comfortable with?

WARREN BUFFETT: Yeah, the 10 percent, there’s a couple reasons —

CHARLIE MUNGER: That’s the right answer. Yeah. (Laughter)

WARREN BUFFETT: We will — there’s two factors beyond in the case of banks. There’s the Federal Reserve requirement there. But many people probably don’t even — might not know about this, but if you own over 10 percent of a security — common stock — and you sell it within six months at a profit, you give the money over to the company, the short-swing profit that you give them.

And you match your — any sale against your lowest purchase. And I think if you sell it and then buy it within six months — I’m not as positive about that, because I haven’t reread the rule for a lot of years. But I think if you sell and then buy within six months, and the purchase is below the price at which you made the sale, you owe the money to the company.

There used to be lawyers that would scan that monthly SEC report that I used to get 30 or 40 years ago. They would scan it to find people that inadvertently had broken that rule, and they would get paid a fee for recovering it for the company.

So, it restricts enormous — it restricts significantly your ability to reverse a position or change your mind or something of the sort.

Secondly, I think you have to report within two or three business days every purchase you make once you’re in that over 10 percent factor. So, you’re advertising to the world, but the world tends to follow us some, so it really — it has a huge execution cost attached to it.

Nevertheless — and those are both significant minuses, and they’re both things that people generally don’t think about.

We did go over recently, for example, in Delta Airlines, that was actually an accident, but I don’t mind the fact at all that we did.

And if the Federal Reserve changes its approach, we won’t have to trim down below that. We don’t want to become a bank holding company and we don’t want to —

We went in many years ago and got permission with Wells, but then our permission expired, and we went in again a few — a couple years ago. And we spent a year or so, and there were just a million questions that Wells got asked about us and so on.

So, it’s been a deterrent. It’ll be less of a deterrent in the future, but it does have those two —

The short-swing thing is less onerous to us than it would be to most people who buy and sell stocks, because we don’t really think in terms of doing much.

CHARLIE MUNGER: But if we didn’t have all these damn rules, we would cheerfully buy more, wouldn’t we?

WARREN BUFFETT: Sure, sure. Well, any time we buy we do it cheerfully, but —

Yeah. And we will — you’ll probably see us at more than 10 percent in more things. And if the Fed should change its rules, there will be companies where we drift up over 10 percent simply because they’re repurchasing their shares. That’s been the case with Wells, and it’s been the case with an airline or two in the last year or so.

So, if we like 9.5 percent of a company, we’d like 15 percent better, and you may see us behave a little differently on that in the future.

CHARLIE MUNGER: Well, one more awkward disadvantage of being extremely rich.

WARREN BUFFETT: Yeah. (Laughter)

And it really is. Yeah, and people following you. I mean, the followers problem can be a real problem.

26. Money managers need to set expectations for their investors

WARREN BUFFETT: OK, station 6.

AUDIENCE MEMBER: Hi. I’m Jeff Malloy (PH) from San Francisco. And this is my first shareholders meeting.

Mr. Buffett and Mr. Munger, I’m 27 years old and aspire to be a great money manager like you two one day.

I’m considering starting my own investment fund, but I also recognize that I am young and have a lot to learn. My question to both of you is, how did you know you were ready to manage other people’s money? And what general advice would you give to someone in my shoes? Thank you.

WARREN BUFFETT: Well, that’s a very interesting question, because I’ve faced that. And I sold securities for a while, but in May of 1956, I had a number of members of my family — I’d come back from New York, and they wanted me to help them out with stocks as I had earlier before I’d taken a job in New York. And I said, I did not want to get in the stock sales business, but I wanted to — I enjoyed investing. I was glad to figure out a way to do it, which I did through a partnership form.

But I would not have done that, if I thought there was any chance, really, that I would lose the money.

And what I was worried about was not how I would behave, but how they would behave, because I needed people who were in sync with me. So, when we sat down for dinner in May of 1956 with seven people who either were related to me, or one was a roommate in college and his mother.

And I showed them the partnership agreement, and I said, “You don’t need to read this.” You know, there’s no way that I’m doing anything in the agreement that is any way that — you know, you don’t need a lawyer to read it or anything of the sort.

But I said, “Here are the ground rules as to what I think I can do and how I want to be judged, and if you’re in sync with me, I want to manage your money, because I won’t worry about the fact that you will panic if the market goes down or somebody tells you to do something different. So, we have to be on the same page.”

“And if we’re on the same page, then I’m not worried about managing your money. And if we aren’t on the same page, I don’t want to manage your money, because you may be disappointed when I think that things are even better to be investing and so on.”

So, I don’t you want to manage other people’s money until you have a vehicle and can reach the kind of people that will be in sync with you. I think you ought to have your own ground rules as to what your expectations are, when they should you roses and when they should throw bricks at you.

And you want to be on the same — and that’s one reason I never — we didn’t have a single institution in the partnership, because institutions meant committees, and committees meant that —

CHARLIE MUNGER: You had some aunts that trusted you.

WARREN BUFFETT: What’s that?

CHARLIE MUNGER: You had some aunts who trusted you.

WARREN BUFFETT: Yeah, well, and a father-in-law who gave me everything he had in the world, you know. And I didn’t mind taking everything he had in the world, as long as he would stick with me and wouldn’t get panicked by headlines and that sort of thing.

And so, it’s enormously important that you don’t take people that have expectations of you that you can’t meet. And that means you turn down a lot of people. It means you probably start very small, and you get an audited record.

And when you’ve got the confidence, where if your own parents came to you and they were going to give you all their money, and you were going to invest for them, I think that’s the kind of confidence that you’ll say, “I may not get the best record, but I’ll be sure that you get a decent record over time,” that’s when you’re ready to go on the —

CHARLIE MUNGER: Let me tell you story that I tell young lawyers who frequently come to me and say, “How can I quit practicing law and become a billionaire instead?” (Laughter)

So, I say, well, it reminds me of a story they tell about Mozart. A young man came to him, and he said, “I want to compose symphonies. I want to talk to you about that.”

And Mozart said, “How old are you?” And the man said, “Twenty-two.” And Mozart said, “You’re too young to do symphonies.” And the guy says, “But you were writing symphonies when you were ten years old.” He says, “Yes, but I wasn’t running around asking other people how to do it.” (Laughter)

WARREN BUFFETT: Carol?

We wish you well. (Laughter)

And we, and actually, we really do, because the fact you asked that sort of a question is to some extent indicative of the fact you got the right attitude going in.

CHARLIE MUNGER: It isn’t that easy to be a great investor. I don’t think we’d have made it.

27. Berkshire doesn’t have to disclose most foreign stock holdings, so it doesn’t

CAROL LOOMIS: This question is from Franz Traumburger (PH) of Austria and his son, Leon, who are both Berkshire shareholders. And it’s interesting to me that in the years we’ve been doing this, nobody has ever asked this question, as far as I know.

Their question is, “Mr. Buffett, I believe it is correct that in its SEC filings — that is the Securities and Exchange Commission — Berkshire does not have to give information about foreign stocks it holds.

“Assuming we hold foreign stocks, could you please tell us what our five largest positions are?”

WARREN BUFFETT: No, the fellow wants investment information. We really aren’t in the investment information business. We disclose what we have to disclose, but we could set up an investment advisory firm and probably take in a lot of money, but we haven’t done it. And we aren’t giving away what belongs to our shareholders for nothing.

But he’s correct that — I’m 99 percent sure he’s correct, and Marc Hamburg can correct me from our office — but we do not have to report foreign stocks.

And we do have — in certain important countries, there’s lower thresholds at which we have to report our holdings, as a percentage of the company stock outstanding — there’s lower thresholds than there are in the United States.

So, in a sense — in certain stocks. I think when we bought Munich Re stock or bought Tesco stock, or there are certain stocks we’ve had to report at — before we would have had to report in the United States.

But we will never unnecessarily advise if we plan to buy some land some place, if we plan to develop a business — we are not about giving business information that’s proprietary to Berkshire. We don’t give it unless we’re required by law.

And he is correct that, I’m virtually certain that we do not have to report our foreign stocks on the SEC filings. And he’ll have to find his own holdings in Austria.

But I think this Mozart story may have encouraged that particular question from Austria, what stocks we’re going to own in Austria. OK, Charlie, do you have any comments on that?

CHARLIE MUNGER: No.

WARREN BUFFETT: No, I didn’t think you would. (Laughs)

28. Buffett expects Precision Castparts earnings will “improve fairly significantly”

WARREN BUFFETT: Jonny?

JONATHAN BRANDT: Precision Castparts’ pre-tax profit margins, while perfectly fine relative to American industry as a whole, continue to be almost 10 percentage points below where they were in the years preceding the acquisition. And I’m guessing they’re lower than contemplated when the purchase price was determined.

The annual report hints that unplanned shutdowns, the learning curve on new plane models, and a shift of oil and gas capacity to aerospace, might all be temporarily depressing margins. But it’s unclear what a reasonable, long-term margin expectation is for this unit.

Now, I know you won’t want to issue a specific margin target or forecast, but I do have a question that I hope you can answer.

Is the downward trend in earning since 2015 mostly due to these transitory items, or have the competitive structure of the industry and Precision’s relationship with its customers changed to the point that meaningful increases from current margin levels are probably unlikely?

WARREN BUFFETT: Yeah. Your prelude is quite correct. I mean, they are below what we projected a few years ago. And my expectation — but I would have told you this a year ago — and they have improved somewhat.

My expectation is, based on the contracts we have and the fact that the initial years in anything in the aircraft industry, for example, tend to be less profitable as you go further down the learning curve and the volume curve, tend to be lower in the near-term. My expectation is that the earnings of Precision will improve fairly significantly.

And I think I mentioned maybe to you last year, in those earnings, there is about $400 million a year of purchase amortization, which are economic earnings in my viewpoint.

So — but even including that 400 million a year, which they would be reporting if they were independent, and we don’t report, because we bought them and there’s a purchase amortization charge. Even without that, they are below what I would anticipate by a fair margin within a year or two. That’s the present expectation on my part. Charlie?

CHARLIE MUNGER: No, I don’t have anything.

WARREN BUFFETT: You’ll have that question for me next year, and I think I’ll be giving you a different answer.

29. The older you get, the better you understand human behavior

WARREN BUFFETT: OK, station 7.

AUDIENCE MEMBER: Good morning Mr. Buffett, Mr. Munger. My name is JC. (PH) I am 11 years old, and I came from China. This is my second year at the meeting.

Mr. Munger, it’s great to see you again after the Daily Journal meeting in February.

Mr. Buffett, you mentioned that the older you get, the more you understood about human nature. Could you elaborate more about what you’ve learned, and how can the differences of human nature help you make a better investment? I would also like Mr. Munger to comment on that, please. Thank you very much. (Applause)

WARREN BUFFETT: You should wait for Charlie’s answer, because he’s even older. (Laughter)

He can tell you more about being old than I can even.

It’s absolutely true that virtually any yardstick you use, I’m going downhill. And, you know, if I would take an SAT test now, and you could compare it to a score of what I was in my early 20s, I think it’d be quite embarrassing. (Laughs)

And Charlie and I can give you a lot of examples, and there’s others we won’t tell you about how things decline as you get older.

But I would say this. It’s absolutely true in my view that you can and should understand human behavior better as you do get older. You just have more experience with it. And I don’t think you can read — Charlie and I read every book we could on every subject we were interested in, you know, when we were very young. And we learned an enormous amount just from studying the lives of other people.

And — but I don’t think you can get to be an expert on human behavior at all by reading books, no matter what your I.Q. is, no matter who the teacher is. And I think that you really do learn a lot about human behavior. Sometimes you have to learn it by having multiple experiences.

I actually think I, despite all the other shortcomings — and I can’t do mental arithmetic as fast as I used to, and I can’t read as fast as I used to.

But I do think that I know a lot more about human behavior than I did when I was 25 or 30 —

CHARLIE MUNGER: I’ll give you — do you want one mantra? It comes from a Chinese gentleman who just died, Lee Kuan Yew, who was the greatest nation builder probably that ever lived in the history of the world.

And he said one thing over and over and over again all his life. “Figure out what works, and do it.” If you just go at life with that simple philosophy from your own national group, you will find it works wonderfully well. Figure out what works, and do it.

WARREN BUFFETT: And figuring out what works means figuring out how other people —

CHARLIE MUNGER: Of course.

WARREN BUFFETT: — behave.

CHARLIE MUNGER: Of course.

WARREN BUFFETT: And Charlie and I have seen the extremes in human behavior, in so many unexpected ways.

CHARLIE MUNGER: Now we get it every night, extremes in human behavior. All you got to do is turn on the television.

WARREN BUFFETT: Yeah. I’m glad he used that example. (Laughter)

30. Ajit Jain on pricing unconventional insurance contracts

WARREN BUFFETT: OK, Becky?

BECKY QUICK: Warren, you mentioned, in response to an earlier question, that Ajit (Jain) and Greg (Abel) are both here to answer questions, and so I thought I’d ask this question that comes from Will in Seattle. He says, his question is for Mr. Ajit Jain and Mr. Warren Buffett.

“You have said that you communicate regularly about unconventional insurance contracts that expose the company to extremely unlikely but highly costly events. I’m curious about how you think about and safely price these unconventional insurance contracts. What analyses and mental checks do you run through your head, to make sure that Berkshire Hathaway will profit without being unduly exposed to catastrophic risk?

“Furthermore, Mr. Buffett, would you want a future CEO to continue a similarly close collaboration with the chief underwriter?”

WARREN BUFFETT: We will get a microphone to Ajit and a spotlight in just a second. And there he is.

Ajit, why don’t you answer first, if you’d like to?

AJIT JAIN: Hi. Obviously, the starting point, I mean, these situations where there’s not enough data to hang your hat on, it’s more of an art than a science.

We start off with as much science as we can use, looking at historical data that relates to the risk in particular, or something that comes close to relating to the risk that we’re looking at.

And then beyond that, if there’s not enough historical data we can look at, then clearly, we have to make a judgment in terms of, what are the odds of something like that happening?

We try — we absolutely, in situations like that, we absolutely make sure we cap our exposure. So, that if something bad happens or we’ve got something wrong, we absolutely know that how much money we can lose and whether we can absorb that loss without much pain to the income statement or the balance sheet.

In terms of art, it’s a difficult situation. More often than not, it’s impossible to have a point of view, and we end up passing on it.

But every now and then, we think we can get a price where the subjective odds we have of something like that happening has a significant margin of safety in it. So, we feel it’s a risk that’s worth taking.

Then finally, the absolute acid test is, I pick up the phone and call Warren. “Warren, here’s a deal. What do you think?” (Laughter) OK. Your turn, Warren.

WARREN BUFFETT: OK. (Applause)

CHARLIE MUNGER: It’s not easy, and you wouldn’t want just anybody doing it for you.

WARREN BUFFETT: No, no. In fact, the only one I would want doing it for us on the kind of things we have sometimes received is Ajit. I mean, it’s that simple. There isn’t anybody like him.

And as Ajit said, we’ll look at a worst case, but we are willing, if we like the odds, and like you say, there’s no way to look these up.

We can tell you how many 6.0 or greater earthquakes have happened in the last hundred years in Alaska or California or so on. And there’s a lot of things you can look up figures on. Sometimes those are useful, and sometimes they aren’t. But there’s a lot where you can get a lot of data.

And then there’s others that — well, after 9/11, you know, was that going to be the first of several other attacks that were going to happen very quickly? There were planes flying that couldn’t — well they couldn’t land in Hong Kong, as I remember. I think it was Cathay Pacific couldn’t land in Hong Kong the following Monday unless they had a big liability coverage placed with somebody.

I mean, the world had to go on. The people that held mortgages on the Sears Tower all of a sudden wanted coverage. —I think that actually was one — but they were just pouring in, of people that hadn’t been worried about something a week earlier, and now they were worried about things involving huge sums.

And there were really only a couple people in the world that would even listen and had the capacity to take on a lot of the deals we were proposed. And there’s no book to look up. So, you do — there’s a big element of judgment.

Ajit and I — I mean, Ajit’s a hundred times better at this than I am, but we do tend to think alike on this sort of thing. You don’t want to think too much alike, but we think alike. I’ve got a willingness to lose a lot of money.

And most, well, virtually every insurance company if they get up to higher limits, they’ve got treaties in place, and they can only take this much. So, the world was paralyzed on that.

We don’t get those, but now obviously. But we do occasionally get inquiries about doing things that really nobody else in the world can do. It’s a little like our investment situation, only transferred over to insurance. We don’t build a business around it, but we are ready when the time comes.

And Ajit is an asset that no other company in the world has. And we work him. And we actually enjoy a lot talking to each other about these kind of risks, because he’ll ask me to think about what the price should be. And he’ll think about — we don’t tell each other ahead of time. And then I’ll name it, and then he’ll say, “Have you lost your mind, Warren?” (Laughs)

And then he’ll point something out to me that I’ve overlooked. And it’s a lot of fun, and it’s made us a lot of money.

And the shareholders of Berkshire Hathaway are extraordinarily lucky. You can’t hire people like Ajit. I mean, you get them once in a lifetime. Charlie?

CHARLIE MUNGER: I don’t think we helped him very much. It’s really difficult.

WARREN BUFFETT: There will be a time when — I mean, I probably won’t be around then — but there will be a time occasionally, just like in financial markets, when things are happening in the insurance world, and basically, Berkshire will be the only one — virtually the only one — people turn to.

CHARLIE MUNGER: But in the past, Ajit, talking to you, has added more than $50 billion to the balance sheet at Berkshire, by making these oddball calls.

WARREN BUFFETT: And if he hadn’t talked to me, it’d be probably 49.9 billion, you know? (Laughs)

But you don’t want to try — don’t try this at home.

CHARLIE MUNGER: Yeah, that doesn’t mean it’s easy.

WARREN BUFFETT: No. And it’s not very teachable.

CHARLIE MUNGER: No, it isn’t very teachable, you’re right.

WARREN BUFFETT: No, it is not something that Berkshire has some secret formula someplace for it. It basically is a very unusual talent with Ajit, and —

CHARLIE MUNGER: We’re not holding anything back. It’s hard.

31. Despite Kraft Heinz problems, Berkshire could partner with 3G again

WARREN BUFFETT: OK, Jay? (Applause)

JAY GELB: This question is on Berkshire’s relationship with 3G Capital. Kraft Heinz’s recent challenges have raised questions about whether Berkshire’s partnership with 3G has become a weakness for Berkshire.

Warren, what are your thoughts on this? And would Berkshire be open to partnering again with 3G in a major acquisition?

WARREN BUFFETT: Yeah, they are our partners, and we joined them. We had a one-page agreement, which I haven’t even actually ever reread. I mean, Jorge Paulo, I mean, is a good friend of mine. I think he’s a marvelous human being. And I’m pleased that we are partners. It’s conceivable that something would come up.

They have more of a taste for leverage than we do, and they probably have more of a taste for paying up, but they also are, in certain types of situations, they’d be way better operators than we would.

I mean, they go into situations that need improvement, and they have improved them. But I think both they and we, I know we did underestimate, not what the consumer is doing so much, but what the retailer is.

And at See’s Candy, we sell directly to the consumer, but at Kraft Heinz, they’re intermediaries. And those intermediaries are trying to make money. We’re trying to make money.

And the brand is our protection against the intermediaries making all the money.

Costco tried to drop Coca-Cola back in, I think 2008, and you can’t drop Coca-Cola, you know, and not disappoint a lot of customers.

Snickers bars are the number one candy that Mars makes. And they’ve been number one for 30 or 40 years. And if you walk into a drugstore, and the guy says, “The Snickers are 75 cents or whatever it might be, and I’ve got this special little bar my wife and I make in the back of the store, and it’s only 50 cents, and it’s just as good,” you don’t buy it, you know. When you’re at some other place the next time, you buy the Snickers bar.

So, brands can be enormously valuable, but many of the brands are dependent, most of them — Geico is not, Geico goes directly to the consumer. If we save the consumer money on insurance, they’re going to buy it from us.

And our brand, you know — and we’ll spend well over a billion and a half on advertising this year, and you think, my God, we started this in 1936, and we were saying the same thing then about saving 15 percent in 15 minutes or something of the sort — not exactly the same — but that brand is huge, and we have to come through on the promise we give, which is to save people significant money on insurance — a great many people. That brand is huge, and we’re dealing directly with the consumer.

And when you’re selling Kool-Aid or ketchup or, you know, Heinz 57 sauce or something, you are going through a channel, and they would — the phrase was used earlier today. You know, our gross margin is their opportunity, and we think that the ultimate consumer is going to force them to have our product, and that we will get the gross margin.

And that fight, that tension, has increased in the last five years and I think is likely to increase the next five or ten years. And Charlie is a director of a company that has caused me to think a lot about that subject. Charlie?

CHARLIE MUNGER: Well. What I think is interesting about the 3G situation, it was a long series of transactions that worked very well, and finally there was one transaction at the end that didn’t work so well.

That is a very normal outcome of success in a big place with a lot of young men who want to get rich quick. And it just happens again and again. And you do want to be careful.

It’s so much easier to take the good ideas and push them to wretched excess.

WARREN BUFFETT: Yeah, that is — no idea is good at any price, and the price settlement is probably something that we worry more about generally than our partners, but we are their partners in Kraft Heinz. And it’s not at all inconceivable that we could be partners in some other transaction in the future.

32. Buffett’s not worried about strength of Kraft Heinz’s brands

WARREN BUFFETT: OK. Station 8.

AUDIENCE MEMBER: Hello Warren and Charlie. Consumer tastes are changing. I think if we asked how many people here in the arena have eaten Velveeta cheese in the last year or so, there’d be only a small handful, maybe more for Jell-O.

3G’s playbook of cutting R&D looks to have stifled new product development amidst changing preferences.

So, here’s my question. Why continue to hold when the moat appears to be dry? Or do you think it is filling back up?

CHARLIE MUNGER: Well, I don’t think the problem was that they cut research or something. I think the problem was, they paid a little too much for the last acquisition.

WARREN BUFFETT: That Jell-O — I can’t give you the exact figures. There are certain brands that may be declining 2 percent a year or 3 percent a year in unit sales, and there’s others that are growing 1 or 2 percent. There’s not dramatic changes taking place at all. I mean, Kraft Heinz is earning more money than Kraft and Heinz were earning six or seven years ago.

I mean, and the products are being used in a huge way. Now it’s true that certain — that there are always trends going to some degree, but they have not fallen apart, remotely. And they have widened the margin somewhat.

But it is tougher, in terms of the margin and the price negotiations, probably to go through to the actual consumer. It’s become a somewhat tougher passageway for all food companies, than it was ten years ago. It’s still a terrific business.

I mean, you know, you mentioned Jell-O or Velveeta. Charlie worked at my grandfather’s grocery store in 1940, I worked there in ’41. And they were buying those products then, and they buy the products now. The margins are still very good. They earn terrific returns on invested capital. But we paid too much in the case of Kraft.

You can pay too much for a growing brand. I mean, you can pay way too much for a growing brand, probably be easier to be sucked into that. So, I basically don’t worry about the brands.

A certain number are very strong, and a certain number are declining a bit. But that was the case 10 years ago. It’ll be the case 10 years from now. There’s nothing dramatic happening in that.

33. Buffett’s biggest problem with Apple is the stock keeps going up

WARREN BUFFETT: OK, we’ll take one more, and then we’ll break for lunch. Andrew.

ANDREW ROSS SORKIN: Thank you, Warren. Question on technology and the company’s biggest holding now.

“Given that Apple is now our largest holding, tell us more about your thinking. What do you think about the regulatory challenges the company faces, for example? Spotify has filed a complaint against Apple in Europe on antitrust grounds. Elizabeth Warren has proposed ending Apple’s control over the App Store, which would impact the company’s strategy to increase its services businesses. Are these criticisms fair?”

WARREN BUFFETT: Well, again, I will tell you that all of the points you’ve made I’m aware of, and I like our Apple holdings very much. I mean, it is our largest holdings.

And actually, what hurts, in the case of Apple, is that the stock has gone up. You know, we’d much rather have the stock — and I’m not proposing anything be done about it — but we’d much rather have the stock at a lower price so we could buy more stock.

And importantly, if Apple — I mean, they authorized another 75 billion the other day — but let’s say they’re going to spend a hundred billion dollars in buying in their stock in the next three years. You know, it’s very simple. If they buy it at 200, they’re going to get 500 million shares. They’ve got 4 billion, 600 million out now. And so they’ll end up with 4.1 billion under that circumstance.

If they’re buying at 150, they buy in 667 million shares. And instead of owning what we would own in the first case, we’d now — the divisor would be less than 4 billion, and we’d own a greater percentage of it.

So, in effect, a major portion of earnings — at least possibly, it’s at least been authorized — will be spent in terms of increasing our ownership without us paying out a dime, which I love for a wonderful business.

And the recent development, when the stock has moved up substantially, actually hurts Berkshire over time. We’ll still do — In my opinion, we’ll do fine, but we’re not going to dissect our expectations about Apple, you know, for people who may be buying it against us tomorrow or something of the sort. We don’t give away investment advice on that for nothing.

But we have — all the things you’ve mentioned, obviously we know about, and we’ve got a whole bunch of other variables that we crank into it. And we like the fact that it’s our largest holding. Charlie?

CHARLIE MUNGER: Well, in my family, the people who have Apple phones, it’s the last thing they’ll give up. (Laughter)

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