Joel Schlessinger MD’s FixMySkin Healing Balm featured on Refinery 29

Tuesday, May 6th, 2014

Joel Schlessinger MD's FixMySkin Healing Balm featured on Refinery 29
There are often habits that dermatologists wish you would shake and some of them might not be so obvious. In a recent article on Refinery29 titled “Skin-Ruining Habits You Need To Quit,” Dr. Doris J. Day and other dermatologists weigh in on these common skin care mistakes. One of these habits, Dr. Day says, can be fixed with FixMySkin Healing Lip Balm.

This unique balm contains 1% hydrocortisone to quickly heal chapped skin, Joel Schlessinger explains.

There is a myth going around that people can become addicted to lip balm, which Dr. Day says is a trick of the mind.

“These people just have dry skin and miss the feeling of the balm when it’s gone,” she says.

Often people resort to licking their lips, which leads to dry, cracked skin or worse.

“Saliva can contain bacteria and irritants, so you can end up with a rash around the lips as well.”

Dr. Day recommends applying a lip balm with hydrating aloe to improve chapped lips. Her favorite, she says, is FixMySkin Healing Lip Balm with 1% Hydrocortisone.

FixMySkin Healing Balms were created by Joel Schlessinger MD and his son, Daniel, to soothe and heal chapped skin.

These newly patented balms were invented seven years ago when Daniel Schlessinger used lip balm to treat dry, cracked skin on his fingertips. He and his father worked to create a cosmetically elegant formula that delivered hydrocortisone deep into the skin. This active ingredient is what sets FixMySkin Healing Balms apart from other products on the market.

Hydrocortisone goes beyond moisturizing to treat and heal the skin. A quick swipe of these balms will relieve itching and heal dry skin, chapped lips, psoriasis, eczema, insect bites, poison ivy, seborrheic dermatitis and allergic skin reactions to cosmetics and other products.

FixMySkin Healing Balms with 1% Hydrocortisone come in vanilla or unscented varieties and they are available in three convenient sizes for the facelips and body.

Do you have a question for Joel Schlessinger MD? Share with us in the comments.

Dr. Joel Schlessinger’s synopsis of the 2014 Berkshire Hathaway Shareholders Meeting

Monday, May 5th, 2014

For the past 15 years I have attended the annual meeting of Berkshire Hathaway, which is arguably the best long-term investment ever in the history of investing. Warren Buffett and Charlie Munger spend six hours talking to the shareholders and putting forth their wisdom.

This year’s meeting was no different, although there were clearly more questions about succession and a bit more morbid reality among both of them. Overall, however, the outlook was positive and the plan seems to be in place for a successful transition and a well-run company.

Their outlook for the future is optimistic, as it generally has been and the stock continues to increase in value. Their insights are the big deal here, however. The following quotes and summaries of discussions are the highlights in my mind. I didn’t include any of the intricate discussions involving financial instruments as that is beyond my level of knowledge for the most part.

I hope you enjoy reading this as much as I have enjoyed this incredible meeting each year.

I am including this piece out of place as it was one of the most interesting and telling discussions of the day: Buffett stated that all of his shares will go to five different charities when he dies. He will ask them not to sell for 12 years and has been donating parts each year to charities already. As always, he hopes you won’t sell any Berkshire shares when he dies as they will do well. They asked why he told his wife to invest in S+P: “My wife’s situation is that she has 100% more money than she’ll ever need. I instructed my trustees to not sell Berkshire(BRK) stock until they absolutely have to…”

Munger: After Warren dies, the money will go back to the civilization in which it was earned. I like being associated with him.

There was much discussion of the fact that Buffett compares Berkshire stock book value to the S+P 500 and it has lagged in the past five years. The question was whether this is a fair comparison. Berkshire stock is so much more than the sum of the parts and the actual performance. It is like waiting for a payout at the end of a career. Charlie said it was crazy that Buffett even considered this as a yardstick and feels it is like climbing a mountain rather than just running a fair race. Buffett quote:  If this is failure, I want more of it.

Obama performance – there was a question stating that they didn’t believe Obama had performed well.  Buffett disagreed and said that his low approval rating isn’t deserved and the proof is that corporate charts are doing well and business is succeeding.

Intrinsic value of stock – Whether to sell or buy their own stock can be a game and intrinsic value is very difficult to measure.

Putting a promise to care for the business and make it prosper is part of the allure of selling to Berkshire – They have only gotten rid of a few businesses and that encourages families to sell to them. Buffett: We made promises to certain businesses based on principle. They may not be doing well, but we will keep running those businesses. Private equity firms won’t be impressed with what is on the back of our annual report, but we have a unique asset at Berkshire and others can’t compete with us. It works well. Munger: We behave the way we do because we like doing it and it works pretty well!

There was a question on the Coca-Cola board compensation issue. Buffett disagreed with the resolution, but ended up abstaining from it despite that. His son, Howard, voted for it. There was much discussion on what that meant and how to behave on boards. Buffett stated that shouting and attempting to change the behavior of others is dangerous and doesn’t always have the intended effect. “Charlie, I offend you more than most people and I’m quite pleased at your level of disapproval [on this issue].” Buffett:  “If you keep belching at the dinner table, you’ll be eating in the kitchen,” essentially saying that if he were to kick up a fuss he wouldn’t be on the board and this is about as active as he would get on this issue. Your social brain needs to be at the board table, not just your intellectual brain. Munger:  Pick your spots of disapproval. Don’t shout disapprovals all day. Pick certain ones.

Cost of capital discussion – Nebraska Furniture Mart was purchased for $60 million in 1983 while it had $4 million in ebidta. It now has $400 million for the main location and I believe he mentioned $600 million (perhaps for all of the units as he has one in Kansas City). Buying Nebraska Furniture Mart wasn’t done at a bargain price, but if you want a bargain price, shop at Nebraska Furniture Mart!

Nebraska Furniture Mart is building a huge site in Dallas. He predicts the Dallas site will be biggest home furnishings in the world by factor of two when it is finished.

Weather-related issues led to railroad problems this winter, which he says was the worst winter ever for the railroads. It is interesting that they simply can’t function well at 0 degrees or lower and that was what it was for much of the winter in the Bakken Oil Fields and north. Buffett will spend $5 billion on railroad this year and there will be a comeback.

There were some questions about their age and who would replace Charlie if he were to die. He said that with Charlie now entering middle age (he is now 90!), he can be like a canary in the gold mine . . . Warren said it was great working with Charlie and wouldn’t have done it any other way. Sadly, Charlie said: The world won’t have to worry . . . most 90-year-old men are gone soon enough. He is not worried about a succession plan, however.

For a company, available cash is like oxygen – you don’t know you need it until it is gone. Shortly after the downturn, they lent money to Harley Davidson at a 15% rate! They never expected to need it and no one else would loan it. They would have liked to have purchased Harley Davidson, but that wasn’t an option. Berkshire will always keep $20 billion on hand so they can sleep at night! Buffett: “In the next 100 years, we will need it at some point.”

He referred to Charlie as “the abominable no man.”

CEO compensation issue and greed among CEOs – He feels that if they publish the salaries of all folks at the company, it will only push up compensation. “I’ve never seen a CEO see a salary of another CEO on a proxy and say, ‘I should make less’. . .” Charlie: “Envy is destroying America. We seek to be envy dampeners.”

Munger: “You need to know how to scramble out of your mistakes. Like when the original textile business of Berkshire Hathaway failed. Imagine what we could have been if we had a better start!”

Every company has more cash than other companies in general at Berkshire and they could do a sweep account for the companies, but they don’t. Perhaps that is a shortcoming on their part, but they feel it is unnecessary because they are not big disciplinarians of companies and don’t want to keep too much control over cash. They likened it to a ‘blood draw’ and felt it could squeeze the life out of the companies. They also said they were somewhat slow to make personnel changes, even when warranted.

By the standards of the world we over trust and some see that as a weakness. That could make us look bad in the future, but it is one of the things they just do. Overtrusting is something that is a cultural issue. My comment: They were burned by it when David Sokol invested in a company they were in talks with and it reflected poorly on them.

Buffett was asked about the candy business in general. He replied that it is stagnant at this time, but has always been a big business, but doesn’t transport well and doesn’t work in some areas of the country. It has lost market share to salted snacks and other items and there is little he can do to increase the size of the market. He said that Pepsi was at one time owned by a candy company. He sees growth stalled now, but not sure what the future will hold. Here is the info on who owned Pepsi from Wikipedia:

Pepsi was first introduced as “Brad’s Drink” in New Bern, North Carolina, United States, in 1893 by Caleb Bradham, who made it at his drugstore where the drink was sold. It was later labeled Pepsi Cola, named after the digestive enzyme pepsin and kola nuts used in the recipe. Bradham sought to create a fountain drink that was appealing and would aid in digestion and boost energy.

1919 newspaper ad for Pepsi-Cola

1919 newspaper ad for Pepsi-Cola

Plaque at 256 Middle Street, New Bern, NC

Plaque at 256 Middle Street, New Bern, NC

In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore to a rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles, and sales increased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield was the first celebrity to endorse Pepsi-Cola, describing it as “A bully drink…refreshing, invigorating, a fine bracer before a race.” The advertising theme “Delicious and Healthful” was then used over the next two decades. In 1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo was changed again.

In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered bankruptcy – in large part due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Megargel was unsuccessful, and soon Pepsi’s assets were purchased by Charles Guth, the President of Loft, Inc. Loft was a candy manufacturer with retail stores that contained soda fountains. He sought to replace Coca-Cola at his stores’ fountains after Coke refused to give him a discount on syrup. Guth then had Loft’s chemists reformulate the Pepsi-Cola syrup formula.

On three separate occasions between 1922 and 1933, The Coca-Cola Company was offered the opportunity to purchase the Pepsi-Cola company, and it declined on each occasion.

Pepsi’s success under Guth came while the Loft Candy business was faltering. Since he had initially used Loft’s finances and facilities to establish the new Pepsi success, the near-bankrupt Loft Company sued Guth for possession of the Pepsi-Cola company. A long legal battle, Guth v. Loft, then ensued, with the case reaching the Delaware Supreme Court and ultimately ending in a loss for Guth.

When they purchased See’s Candies in 1983, it opened their eyes to the power of brands. Its main contribution was “ignorance removal.” Munger: “We are pretty good at ignorance removal and good news is that there is a lot left. We want to purchase good businesses that are run well with good management in place and a big potential earning power.”

Coal v. green energy – I think there are a lot of folks who like a calamity and want to talk about it, (but it isn’t relevant to their work/investments now). We do see climate change and invest in both coal and other green energy. Because of their investments in green energy in wind and solar in Iowa, they got the contract for a 1 million square foot Google Data Center in Iowa. This allows Google to gain energy tax credits.

He thinks Ben Bernanke was a hero during the crash. Interest rates being this low is something we’ve never seen and don’t know how it will end but it will be an interesting story. He likes Janet Yellen as well.

Munger: If you’re not confused you probably don’t understand it very well. This is not a bubble situation with interest rates being so low but it is unusual and they are unsure when it will end.

There was a question about conglomerates and performance and the fact that Berkshire is one of a very few conglomerates that actually has worked. The question was why they worked, but no others have so far. They feel that moving capital between businesses with business principles is what should be done rather than stock indications and most conglomerates do it the wrong way (do it for stock reasons). They referred to it as a chain letter idea – it works well initially and then it blows up. They are like the Mellon brothers v. Gulf and Western, which he didn’t think succeeded.

They talked about when they invested huge amounts of capital, which they did in 2008, much to shore up the economy and create faith in America when it wasn’t there. They did reflect that investing in 2008 was too early and had they timed it (which is clearly impossible to know), they should have invested in 2009.

While initially, they invested in stocks more than companies, now it is the opposite, but it is more enduring to invest in purchasing entire companies. Buffett: I love it when we buy transmission lines in Alberta. They won’t ever be ‘gone,’ but if they do ‘go away’ we won’t know it (i.e., the world will be over)!

There was a question regarding investing in banks. They said they could have made more money buying marginal banks back in 2009 as they had more room to recover than Wells Fargo, which was a wonderful bank and did well throughout the downturn. Basically, they stated it is best to invest in something that is not the greatest if you want to see a significant return . . .

On Progressive’s Snapshot and insurance rates – they say there are all sorts of ideas for insurance and they stand by Geico not having Snapshot. They did say that if self-driving cars come around, it will be very good for society and very bad for automobile insurers. But they wouldn’t sell Geico yet as they think self-driving cars will not be here five years from now or 10 years from now as well and “30 years from now, I’ll go away peacefully without knowing how it all turns out.”

A person asked how they know their circle of competence – Buffett: “I know of a number of CEOs who don’t know their circle of competence. Mrs. B (the owner of Nebraska Furniture Mart) knew it when she took cash for Nebraska Furniture Mart and invested it in real estate and apartments rather than the offer of Berkshire stock.” Apparently, she didn’t even read the contract but her son did (she couldn’t read English). Competency is a relative concept according to Munger. “What I needed was to compete with idiots and luckily there is a large supply of them.”

When Buffett was young, he went to various CEOs unannounced and asked to talk with them. When he did, he asked them, “If you had to invest in any other company in your space other than your own, which would it be?” He then picked the company that most of them referred to. “You can learn a lot by asking. You will find your spot over time . . .”

Munger: “If you’re outclassed and in a highly competitive field, you should realize it and get out of it.” Buffett: “I had a similar experience in athletics!”

There were several hotels in Omaha that had very expensive rates for the convention and Buffett said that he invited Air BnB to open up in Omaha to alleviate the situation.

Will Geico ever overtake State Farm?  Geico passed Allstate this year. Buffett: “When I turn 100, it will be number one. I’ll do my part” Charlie: “Geico is like Costco. Good product at a low price.” Warren: “People don’t come and go at Geico and stay with the product.” Charlie: “Costco is unbelievable. Most companies talk the game but don’t live the game like Costco does.”

Talking about spending money and how to live frugally –  Warren lives in the same house in Omaha that he has been in since 1958. He called Charlie less frugal as he actually built his house in California and paid an architect. Charlie said he built it in 1960 and paid the architect $1,900 for the house plans!

Buffett: “I have everything I wanted. I don’t think standard of living equals money. I don’t think my life would be better if I had six or eight houses. It just doesn’t correlate. X or 100x doesn’t equate with standard of living or happiness.” That is part of the allure of Berkshire to investors. Munger: “We collect frugal people [at Berkshire].” Buffett: “But forget being frugal this weekend. The more you buy, the more you save at these prices at the Nebraska Furniture Mart and Borsheims!”

They talked about companies going overseas for lower tax rates – “Moving overseas to save money would be crazy. To be as prosperous as we are at Berkshire and try to move to pay less taxes if stupid. We don’t mind paying our taxes, but we don’t give a tip on our taxes either! We follow the rules and don’t begrudge our taxes.”

They talked about the intrinsic value (qualitative) v. financial factors and a stock’s valuation. Charlie’s thoughts are quality, while Warren looks at the financial aspects more.

They talked about why someone hasn’t copied them. They said that Berkshire is too difficult to copy and paid respect to Dr. Edwin Davis, a famous urologist from Omaha who introduced Charlie to Warren and explained that he did his surgeries unlike anyone else and therefore ended up with mortality rates that were unheard of through a complicated, but excellent method that no one else could imitate. Berkshire is slow to do things but does them the right way, to which Munger said, “Berkshire is so slow that you’ll be dead before it is finished.”

On inflation – it will hurt everyone. Can’t keep printing money and it’d be a shame if a bunch of politicians messed it all up.

On companies that acquire multiple companies – The sum total of acquisitions will be dumb and industry isn’t like Berkshire when they invest and therefore doesn’t have the same results.

They talked about some companies that they didn’t get. “When we see that a company we don’t own is going to have an acquisition, we cry but we do well.” Warren on mergers/acquisitions: “Most of these ideas are dumb.” Charlie: “Some are just mediocre.” On the whole, there were all sorts of gains that could have happened if these companies hadn’t made those acquisitions.

Warren: “They try hard not to just do a deal but to do a deal that makes sense.”

On talking about acquisitions – After Buffett expressed his strong disapproval of the current culture of acquisitions, Charlie said, “You know how how much more tactful Warren is.” Warren answered: “The comparison isn’t tough compared to Charlie.”

Prosecuting individuals v. corporations – They favor prosecuting individuals as that is the only way to make sure folks don’t go over the line. “We know there will be individuals who do things wrong in our 300,000 people corporate city but hope [they don’t].” The way to change behavior is to make it hit home with the individual punishments as they did with Salomon Brothers.

They talked about insuring railroads and the risks of another accident like the one in Pennsylvania. They said that transportation of HAZMAT materials is something they have to do and can’t decline and insurance will cover it even if another bad accident occurs. Compared to the Gulf/BP disaster – Charlie: “I would have less enthusiasm of drilling in Gulf of Mexico if I were BP after the spill there. Who would have thought that just one leak could lead to the huge issue and loss? We have to carry chlorine and other materials, but these won’t cause the issues like BP.”

They are now in commercial insurance is a forever play and we plan to play hard in it.

Someone asked if they intended to purchase the Clippers. Buffett: “Sports equipment isn’t a great business and we own some of it, but if we try to buy a sports team you need to look at successors to us!”

Activism looks to get prices up for stocks but not necessarily changes in companies. They said you wouldn’t want an activist to marry into the family, which was funny as Bill Ackman, the activist investor behind the Valeant/Allergan deal was in the audience. They called to mind the quote by Oscar Wilde about fox hunting when asked about activists and their activities: “The English country gentleman galloping after a fox – the unspeakable in full pursuit of the uneatable” from the play, A Woman of No Importance.

Munger: “I think America made a mistake when they let the public schools to go to hell in answer to education crisis. The Asians aren’t making the same mistakes.”

Buffett: “Fannie and Freddie are doing a pretty decent job now and when the private sector was running things it was a race to the bottom. I think that particular experiment in privatization was a total failure and we even made a billion dollars together off of it . . .”

Brazilian partners that bought Heinz with them (3G) – Smart, hard-working, determined, never satisfied and never overpromise. They have a book about him called Dream Big, which is now in English.

How to get folks to partner with them – “The way to get a good spouse is to deserve one.”  The same thing goes with corporate partners.

Talking about the fact that they haven’t done as well lately and eventually companies don’t have huge growth – Munger: “It’s not a tragedy to succeed so much that future returns go down.”

Talking about how to teach children financial literacy – Many parents are committing financial lunacy, but they have a board game that teaches it called the Secret Millionaires Club. The best is to learn at the dinner table. Adult financial literacy is important too! Charlie: “Most of the fault is with the parents. It is hard to fix people who have the wrong parents and teach the wrong things.”

Buffett and Munger on business schools and business education – Buffet: “I’m good at raising the top higher in my field, but a lot of asinine stuff being taught in colleges for finance. The net utility was negative.” Munger:  “It was asinine.” Extraordinary universities were teaching dumb things. But they think that they are doing a little better now.

Dr. Joel Schlessinger’s synopsis of the 2013 Berkshire Hathaway Shareholders Meeting

Monday, May 6th, 2013

Dr. Joel Schlessinger's synopsis of the 2013 Berkshire Hathaway Shareholders Meeting

This was a terrific opportunity to hear two of the smartest people (possibly the most influential) of the 20th and 21st century answer questions for 5 hours.  Clearly, the contributions that Warren Buffett’s foundation has given to help in world health are incredible.  This wasn’t from the meeting, but he has personally given over $25 billion to various health initiatives via the Bill and Melinda Gates Foundation, which is MORE than Bill Gates has given (about $22 Billion).

The mood of the meeting was much happier than last year as there was the specter of the firing of David Sokol, one of his VPs, last year.  In general, both Warren Buffett (WB) and Charlie Munger (CM) were upbeat about the economy.  They always have subtle differences in their thought processes, so it is great to have the point-counterpoint of their repartee during the meeting.

Best quote of the meeting from Charlie Munger:  As far as the current financial situation in the US goes:  “Our current problems are quite confusing and if you aren’t confused, then you don’t understand it well …”

Next best quote from CM: “Knowing the edge of your competence is very important. It works very well in matrimony.”  This, actually, is one of his common discussions and there is a whole article on this here:

Next best was re the Euro and prospects of the EU: CM: “Europe made terrible mistakes, but they have politicians too. Letting Greece into the EU was like using rat poison as whipping cream. “

Re Facebook:  CM: “Memorializing the three dumbest things you did as a 13 year old is a dumb idea.  There’s a time when your ignorance and folly should be hidden.”

Definition of a derivative:  A new kind of asset that is good until you reach for it…

Talking about inheritances and how best to make sure kids turn out well: “More kids are ruined by the behavior of their parents than the inheritance.”  The point was also made by Buffett that an inheritance of $100 million or more is better served to give to society than to figure out how to pass it on to your heirs so they can call the trust fund once a year to get their distribution.

One of the most interesting tidbits of the meeting was a discussion regarding the Bakken Oil Reserve.  As you may know, Berkshire purchased all of the BNSF Railroad a few years ago.  This decision was made during the recession, when railcars were lying unused on the tracks and collecting dust.  There was a bit of a concern as to why they would do this when things didn’t look very good for the entire industry.  This is another one of those prescient moves by Berkshire that are now unfolding…

As it turns out, BNSF has the only rail station close to the Bakken Oil fields in North Dakota, which means they have been super busy with oil deliveries.  This year alone, they had a 3.4% increase in rail car loadings vs .4% for all other railroads, mainly due to the Bakken impact.

When asked if the Keystone Pipeline would impact this business if it is completed, Buffett answered that pipelines are quite slow in the actual delivery of oil and railroads can far outpace them.  Additionally, he quoted a figure of 650,000 to 750,000 barrels of oil a DAY for the Bakken at present and possibly up to a million barrels a day in a year or so.  This compares to 600,000 a day for the entire US prior to the Bakken being drilled.  There is going to be a huge need for transport of oil and BNSF is poised to have a major payday for that!

They were asked about the future chances for the economy and said they don’t care what any economist feels about the future, because nobody knows for sure. “We know that there won’t be a substitute for BNSF railroad because there won’t ever be another opportunity to build one like it in the US and that leaves two important railroads in the east and two in the west, so BNSF is OK.”  They said it is more important to know what is going on now as you can’t make a lot of money if you don’t.  Knowing what is going on now is more important and just as hard as knowing what is going to happen in the future!

But they did say that the new normal is going to be less. Then, they said that if a surgeon is wondering about whether to retire now or work for the next two years, Charlie says to work for the extra two years!

Intrinsic value of Berkshire:  One of the bedrock values of Berkshire is that of intrinsic value.   Basically, what that means is that Berkshire always looks for other potential payoffs for a project.  They feel that the book value of Berkshire Hathaway doesn’t ever relate the total value of the stock and feel there is, at the least, 20% in added ‘intrinsic’ value to Berkshire stock at present.  They have often stated when they feel Berkshire is overpriced, much to the unhappiness of shareholders, so this is a number to be believed.  GEICO is doing well and even though they don’t have Progressive’s Snapshot concept, they are adding 1 million customers a year at over $1500 value per customer or about 1.5 billion dollars a year.  That’s huge.  Almost all of their units are in great shape.

As for the future:  Having capital when markets are in distress will allow their successors to succeed.  They went back to 2008 and 2009 when folks were exiting the market and Berkshire was $75,000 a share, vs $162,900 now.  They invested in Harley Davidson, Goldman Sachs and a host of other companies and returned a huge profit for it.  They live for times of uncertainty as that is the best time to purchase things!

According to CM, his advice to his heirs: “Don’t be so stupid to sell your shares when we die”

They said the reinsurance business is very difficult to run in general, but they have done well with the brilliant help of Ajit Jain.  He is rumored to be the next Warren Buffett, but no formal title has been stated.  They had many good things to say about him, but mainly he has managed to adapt their risk portfolio in ways that no other company could do and avoid writing insurance that was a bad prospect.  When asked about Global Warming and the prospect for decreased profit in this industry, they said they believe it is happening, but are overly pessimistic in their insurance models to take this into account.  Interestingly, Charlie Munger is a Cal Tech trained meteorologist!

Warren: Paying up for an extraordinary business isn’t a mistake.  Charlie: We always pay too much!

There was a question as to whether they are becoming too careful and making Berkshire more of a widows and orphans stock.  They said they do have more challenges, but know a good deal when they see it and go for it, such as Heinz and BNSF.

Will the dollar be the reserve currency in 20 years? Yes, but not forever.  They said there are naturally going to be fluctuations in what is the reserve currency for the world, but when the dollar goes out of favor, that will put it in a somewhat less positive position, but not terrible.  They mentioned that Great Britain had the lead until the dollar and now they are still strong, yet not as strong.

If the rest of the world keeps bringing corporate tax rates down it puts US at a disadvantage as it forces companies out of the US.  This is something they hope is addressed.

Does the variable nature of Berkshire units lead to an unwieldy company eventually? Yes, but that is why they have the diffuse management structure they have.  If they had a top down organization it would be impossible, but this is the beauty of Berkshire and strong managers.

Their lowest entry spot for new businesses: Trying to acquire companies that are $75 million or more in business, but obviously they prefer to take on much larger companies as well.

GDP and inflation. Fed would like to have inflation as it makes their GDP look better, but obviously this has other, not so good, implications!  We may have more inflation sooner than later and it is going to be tough as this period of low interest money has been quite unusual.  Also, having Japan in trouble for so long has been helpful to the US economy as they haven’t been as much of a competitor as they could have been.

There was a question as to whether the Pampered Chef was the same business model as Herbalife?  Their answer was no, as Pampered Chef isn’t dependent upon loading up folks on stuff they can’t sell from the get go.  While it is a franchise, the issue with Herbalife is that they sock folks with large inventories and then many of them fail, predictably.  CM said: “There’s likely to be more flim-flam in selling magic potions than in pots and pans”

They talked about the transition from value investor in the early days to purchaser of large companies and said they enjoyed both, but now it was more intelligent to be into the larger companies and they couldn’t really succeed in the same way as a value investor only at this point.

When asked why they’ve succeeded: We’ve always tried to stay sane in the markets…

When asked about why they can manage so many companies well – We’ve used the golden rule when it comes to subsidiaries and tried to be a good partner to them. CM wished he had thought of the golden rule, but is still happy to use it!

Other competitive advantage they have is that there are virtually no competitors to their model of purchasing businesses and keeping them intact.  Most want to take them over, fire everyone and then reassemble them.  For this reason, they are a great resource for someone who doesn’t want their life’s work destroyed when they sell it.

Energy: Coal isn’t as good an outlook as oil, but still has opportunity.

They said that when Harley Davidson had troubles in 2008 and came to them for a large loan, they never had any concerns.  Paraphrasing quote: Any company that has folks tattooing ads for them on their chest has very little likelihood of becoming worthless.

There was more discussion about Snapshot, a tool by Progressive (a competitor to GEICO) that allows the company to install a camera/computer in the car to follow the driver’s behaviors and potentially save up to 30% and predict better drivers.  When asked why they don’t have it, they said they don’t need it to predict rates of accidents and their business with GEICO remains incredible.

When Buffett was asked if he had indeed made a list of the top 25 projects each year and then pared it down to the top 5 and forget the rest, WB said “I’ve never made a list in my life, but that seems reasonable to do.”

There were a few questions re the newspapers and why they invested in them.  Apparently, the after tax return for papers is 10% and earnings are going to go down over time, yet this was built into the price he paid for them.  Additionally, he just wanted to do it as he regards the newspaper industry fondly.

Biggest looming problem:  Healthcare costs are 17.5% of GDP in the US vs 9.5 – 11.5% in other countries which puts us at a huge disadvantage to others – WB

Biggest problem looming: CM feels securities and derivatives markets are revolting and mismanaged.  Also the fact that graduates from Cal tech and Berkeley are going into finance rather than other jobs like medicine and engineering is concerning.

There was a question as to whether solar would eventually impact their energy companies, as it is now being used in relatively cloudy countries like Germany:  CM: “Put me down as not completely charmed by the concept of rooftop solar units in cloudy areas.”

When asked about how they feel the prospects are for a child born today vs in their time they said that a child born today has much more opportunity, but competition is more acute now for those opportunities.

As for the financial arena, they said that back when they started in the 1960’s, they were drowning in ideas but no money, but now they are drowning in money, but no ideas!

Recurrent theme:  Find things you like to do early in life and you’ll do well.  You have to love something to do well at it. The intensity is part of that. Quote by Mae West:  “The score never interested me – only the game.”  This is what they related to the fact that they look at the game when they do their work and it interests them still.


They talked about how many insurance companies have gone off the rails by insuring stupid things or making deals that weren’t sound.  “You get offered many opportunities to do something stupid, but just have to say no.”  They gave the example of when they purchased a gas station in the 60s and there were gas wars immediately that made them sell gas for less than the price they paid for it.  This was a good example of spending money to be in a stupid business.

Paraphrasing CM: Investing in bubbles, such as the housing market is much like the commandment: Don’t covet your neighbor’s ass.  People see other people making money in flipping houses or crazy internet stocks and they say, ‘why shouldn’t I have that’ and invest unwisely.

Opportunity for women vs men:  WB talked about the sadness that his sisters didn’t achieve the same things he did, even though they were as talented.  He said that back then the result of this was that most teachers were women because opportunity wasn’t there for other professions, but that led to great teachers.  He related the story of Katharine Graham of the Washington Post who didn’t believe in herself as much as she should have, even though she was hugely successful.  He related the fact that women see themselves as in funhouse mirrors and suggested to read his article here:

Buffett talked about a website,, that placed odd or difficult bets.  He has made a $1 million bet that the S&P will outdo a hedge fund portfolio over 10 years.  He feels hedge funds are not a good deal after costs, etc are taken into account:

“Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.”

Warren Buffett

Protege Partners, LLC

STAKES $1,000,000

will go to Girls Incorporated of Omaha if Buffett wins,
or Friends of Absolute Return for Kids, Inc if Protege Partners, LLC wins.


What is Berkshire going to look like in 5 or 10 years? BNSF will still have competitive advantage 15 years from now but not sure about Apple, which they don’t invest in. They dismissed, to some degree, math and number crunchers as they can’t always be used to advantage in evaluating companies.  Sometimes it is just a gut feeling and other factors that CPAs can’t evaluate.  Many articles and statements say that they don’t even get into evaluating numbers for risk of investment because they want to make sure there is no risk before they think about it.

From the article on competence: “Munger: Warren talks about these discounted cash flows. I’ve never seen him do one.”  [“It’s true,” replied Buffett. “If (the value of a company) doesn’t just scream out at you, it’s too close.”] 1996 Berkshire Hathaway Annual Meeting

Of course, Buffett and Munger can do more mathematics in their heads that an average person can do on a calculator, but the point remains.  Munger and Buffett want the mentally computable math to be overpoweringly clear and positive.  Bill Gates has said on this point:

“… being good with numbers doesn’t necessarily correlate with being a good investor. Warren doesn’t outperform other investors because he computes odds better. That’s not it at all. Warren never makes an investment where the difference between doing it and not doing it relies on the second digit of computation. He doesn’t invest–take a swing of the bat–unless the opportunity appears unbelievably good.”


WB related how he came to purchase shares of AMEX early on.  He was talking to the owner of Hertz cars in the 1960s, who was complaining that he had to offering to take AMEX for his business and that was going to lose him money in the long run.  He said there was so much of a hue and cry that he had no other choice.  WB said at that time that AMEX was the kind of business he needed to acquire!

Someone asked if they would now invest in airlines due to the industry consolidation and higher earnings. Reply: there are industries where even two competitors can hurt each other and not succeed!

They feel the airline industry has been an ‘investor death trap for over 100 years’, but now may finally be the time to consider it if it weren’t in the ‘too hard’ pile. So basically, still stay away from airlines.  Then, comparing airlines to railroads, there isn’t the opportunity to build another railroad, but there are plenty of opportunities to build another airline and it is a sexy idea that many folks clamor to do, so they are happy to stay with the railroads!

When asked why they still don’t do short selling (and offered an incentive to do it for charity from one of the panelists) they said, “No. We don’t like trading money for agony…but we wish you well.”

Quote by CM: “The game of life is a game of everlasting learning if you want to win…”  They talked about how every business changes and you have to adapt and that is one thing that Ajit Jain has been instrumental in arranging for them in the insurance business.

Talking about the financial crisis and US debt – They said the debt to GDP ratio after WW2 was higher than it is now, so although it is high, it isn’t as high as it was back then in relative values. They BOTH feel the stimulus plan was needed and there was no person who disagreed (Bush or Obama), yet ‘all of our problems are trivial if GDP can just increase 2% a year’. Policies just have to assure that.

They talked about Benjamin Moore paint and its distribution method. They kept their network of dealers despite being asked to be in big box stores many times and declined to purchase several other paint companies.  This has been a good decision and has kept their dealers happy, despite not having the distribution that other paint companies have.  They aim to serve the higher end of the paint market and it works, yet they admit that one company’s strategy can’t be applied to all businesses.

There was a humorous interchange between CM and WB.  One person asked if the gifts to charity that WB is donating now are causing fluctuations in the stock.  WB explained that he only gives away about 5% of his stock each year, so that is about $2 billion and that isn’t so much in comparison to other stocks that trade billions a day!  Charlie quipped: “There’s nothing so insignificant to an old man as an extra 2 billion dollars.”

Railroad car loading data shows improvement in the economy with 3.5% for BNSF and .4% for other railroads, so the economy is coming back as well as the housing market.  It is slow, but should get better.

Howard as non-executive chairman – There was some discussion on this, but basically WB thinks he will be a veto for a CEO that may not be good or turn bad after getting in power.  That is a huge concern as they don’t know how a person will react to being in power.  They have taken quite a bit of pride in not wielding their power in all businesses, such as the newspaper business.  WB said that two of their papers came out for Romney and two came out for Obama and they were proud that they didn’t tell them what to do.  Having a new CEO could have issues that require a veto.  Still, this is a huge issue.

There was discussion of the life insurance industry in general and questionable investments they had made.  WB made the statement that this was like the person who was in a switchblade fight and his opponent swooshed the blade at the neck area.  The one who had possibly been hurt says, “Hey, I’m fine” and the person with the switchblade says, ‘Just don’t shake your head…” The implication is that the life insurance industry is in for a day of reckoning.

When asked if the housing market is once again heading toward a bubble, they said they don’t feel we are remotely near a bubble in it now, but they recommend refinancing now as rates are going to go up significantly soon!

Regarding the housing bubble, they said it was unfortunate because the situation where the Fed induced folks to purchase over their ability was like the government was encouraging folks to get drunk and instead of pulling away the punch bowl they increased the proof in it!

Pack mentality and seeing falling prices in the stock market makes for great purchasing opportunities.

Regarding social media and how pervasive it is – CM:  Young people [in charge of all these companies] operating like crazy in all sorts of areas can’t be doing it very well.

CM: Accounting today is like the postal service in Italy where if you don’t like the mail piling up you can just throw away a few cartloads…

Lastly, there was a brief discussion of wills and how best to arrange them to give your children enough, but not too much. There wasn’t much of an answer to this, but Warren feels it is crazy to read the will for the first time after you’re dead.  He feels it is best to read it while you are alive so they can figure out how to execute it and you are there to give insight into why you have done what you’ve done.  Charlie disagreed with this and said it depends on the circumstances and wouldn’t ever do that.  WB said this is just one way to make sure you have done what you want, but wouldn’t do it until the kids are grown and able to cope with the inheritance and concepts of it.

–Joel Schlessinger

Dr. Joel Schlessinger advises against waxing if you use retinol products

Wednesday, February 20th, 2013

Dr. Joel Schlessinger advises against waxing if you use retinol productsThe national media has recently reported that women using skin care products that contain retinol should be cautious when it comes to waxing. Although this may seem like common knowledge to some, Dr. Joel Schlessinger says that this is very important to remember in order to avoid skin damage.

Retinol is found in many skin care products, says Dr. Joel Schlessinger.

Retinol is a common ingredient found in both over-the-counter and prescription skin care products. It is commonly used to fight the signs of aging and treat acne blemishes. One of the side effects of this drug is that the skin cells become sensitive and are less likely to stick together.

Because the cells are less likely to stick together, the force of pulling wax off the skin would cause the skin to come off deeper than it should, causing irritation or even scarring.

Dr. Joel Schlessinger says waxing can cause pain and scarring to those that use retinol products.

“We advise all of our waxing patients to avoid retinol products,” said Dr. Joel Schlessinger. “If you regularly use a retinol product, you should stop using it about 5 days before getting waxed.”

Waxing is commonly used to remove hair from the upper lip, eyebrows and other areas of the face where retinol products may be used. A thin spread of wax is applied on the skin and then ripped off against the direction of the hair growth in order to remove the hair from the root. While this form of hair removal is effective, it can be abrasive to sensitive and retinol-treated skin.

There are alternatives to waxing if you use retinol products. Dr. Joel Schlessinger recommends his favorite below.

“Be sure to tell your esthetician if you use any retinol products before you get waxed so they can choose the right form of hair removal for you,” said Dr. Joel Schlessinger. “Other forms of hair removal are readily available and some of them are even permanent!”

As an alternative to waxing, Dr. Joel Schlessinger recommends using the me smooth Hair Removal Device. This FDA-approved at-home laser hair removal device makes hair removal quick and easy. Learn more about the me smooth Hair Removal Device here.

Do you use retinol products? How do they affect your normal skin care routine? Share with us in the comments.

Dr. Joel Schlessinger and staff have a run-in with celebrities in Los Angeles

Tuesday, October 16th, 2012

Dr. Joel Schlessinger's staff member, Ashley Bell, gets a photo taken with Kevin Connolly from EntourageDr. Joel Schlessinger and a few of his staff members attended a meeting last week in Los Angeles where they spotted several celebrities. The staff traveled to Los Angeles to learn about a new clinical research trial when they happened to run into several celebrities at the Beverly Hills Hilton.

Halle Berry and Tom Hanks were at the hotel for an event surrounding the release of their newest movie, Cloud Atlas.

Other celebrities that were at the hotel at the same time as Dr. Joel Schlessinger and staff were Ben Whinshaw, Susan Sarandon, Hugh Grant, Cedric the Entertainer and Kevin Connolly.

The Beverly Hills Hilton was also the hotel where famed singer and actress Whitney Houston passed away last February.  According to Dr. Schlessinger, the room she was found in, number 435, is no longer available for rent and has the room number taken down.

Dr. Joel Schlessinger and his family are large supporters of cinematic arts – learn more about their involvement in Omaha’s local independent film theater, Film Streams, here.

See more photos of Tom Hanks and Susan Sarandon at the Beverly Hills Hilton on Dr. Joel Schlessinger’s Flickr photostream.

Have you ever had a celebrity sighting? Tell us about it in the comments.

Parabens are the most commonly used preservatives in cosmetics and skin care products. Dr. Joel Schlessinger recommends paraben-free alternatives.

Monday, April 30th, 2012

Currently, the Food and Drug Administration (FDA) is not warning people against using parabens. However, the safety of parabens has been called into question by studies that show potential cancer-causing properties of the preservative – so many people are avoiding products with this ingredient.

Here, Dr. Joel Schlessinger chooses his favorites among the 1,100+ paraben-free products available at

LovelySkin Cream Cleanser

LovelySkin Cleanser (Regular) is fortified with nourishing ingredients and removes dead skin cells without over-drying the skin.

LovelySkin Cleanser washes away makeup and excess oil through a paraben-free formulation. This cleanser uses medical-grade ingredients, including amino fruit acids (AFAs). These amino acids exfoliate your skin without irritation and the vitamin C reduces the appearance of wrinkles. Meanwhile, Dead Sea minerals help skin to regenerate and heal from environmental stresses and the overall effect of the cleanser is to leave your skin feeling soft and supple – and looking luminous.

EltaMD UV Clear SPF 46 Very Light Sunscreen

The EltaMD UV Clear SPF 46 Very Light Sunscreen is another outstanding paraben-free product recommended by the doctor.

EltaMD UV Clear SPF 46 offers both UVA and UBA protection, and the sunscreen contains dual-purpose niacinamide: this ingredient calms acne-prone skin and serves as an excellent sunscreen for people with oily skin.

Besides being paraben-free, this sunscreen is also oil-free, sensitivity-free, fragrance-free and non-comedogenic, and it doesn’t leave behind a greasy residue. You can use the product under your makeup – or alone.

Rather than choose a third paraben-free product, Dr. Joel Schlessinger encourages you to check out the entire paraben-free section of

You’ll find more than 1,100 skin care and cosmetic products that do not contain parabens, ranging from more cleansers and sunscreens to:

  • foundations, from pressed base to liquid and more
  • lotions, creams and moisturizers
  • facial scrubs to masks and serums
  • blushes to primers and more and Dr. Joel Schlessinger do an excellent job of providing products that meet unique skin care needs across the spectrum, including paraben-free products.

You’re committed to using natural skin care products – but which ones are best? Dr. Joel Schlessinger makes his recommendations for you here.

Wednesday, April 25th, 2012

Alchimie Forever Line
His first choice is the hypoallergenic, non-comedogenic, dye-free, gluten-free and cruelty-free Alchimie Forever line. None of these products are ever tested on animals.

Alchimie Forever was founded to treat sensitized skin that had recently undergone procedures. The brand continued to develop, focusing on gentle anti-aging botanical formulations that are effective, especially for people with sensitive skin.

Products include a body contour gel, firming gel for neck and bust and gentle antioxidant scrub, plus age defying serums, a brightening moisture mask and more.

Clark's Botanicals Nourishing Youth Serum

The second choice of the doctor is Clark’s Botanicals Nourishing Youth Serum, a powerful blend of botanicals and antioxidants.

Clark’s Botanicals Nourishing Youth Serum is a highly effective anti-aging product that helps to fight wrinkles and visible lines. The serum nourishes and hydrates your skin, protecting you against new signs of aging while fighting existing wrinkles and lines.

Products in the Clark’s Botanicals line are paraben-free (parabens are chemicals used as preservatives in cosmetics) and contain Jasmine Absolute, an essential oil that provides anti-bacterial and anti-inflammatory benefits. These products work well for all skin types.

Dr. Joel Schlessinger also recommends the Eminence Organic Skin Care line as your natural skin care solution. 
Eminence Organic Skin Care
Eminence Organic Skin Care products contain potent combinations of fruits, vegetables, flowers and herbs and are free from harsh chemicals. These products are created to hold on to the maximum amount of nutrients and vitamins.

Choose Eminence products to combat aging, wrinkling and sun damage, to fight acne and to prevent the loss of skin radiance.

If you have too much melanin in your skin, this condition is called hyperpigmentation. Dr. Joel Schlessinger recommends products for you.

Friday, April 20th, 2012

Many women suffer from blotchiness or pigmentation issues. These can be termed ‘hyperpigmentation’ or ‘melasma’ or ‘chloasma’ and are commonly seen after pregnancy or the start of birth control pills. Dr. Joel Schlessinger and his website,, offer advice and product choices for effective treatment of these conditions and more.

At the Medline Plus site by the U.S. National Library of Medicine and the National Institutes of Health, multiple risk factors are listed for hyperpigmentation:

  • History of skin inflammation
  • Medication use
  • Endocrine diseases
  • Too much iron
  • Sun exposure

If you have hyperpigmentation, you’re probably more concerned about what to do than the causes – and so Dr. Joel Schlessinger offers his recommendations here.

The Obagi Nu-Derm Starter Kit: the #1recommendation

Obagi Nu-Derm Skin Care Starter Set (Gentle Cleanser - Normal to Dry)

The Obagi Nu-Derm Starter Kit includes the full-sized products you need for your hyperpigmentation, along with a travel bag and the information needed to appropriately use this skin cell renewal kit.

Here’s what is included in the skin renewal starter kit:

Step 1: Nu-Derm Gentle Cleanser – For Normal/Dry Skin
Step 2: Nu-Derm Toner
Step 3: Nu-Derm Clear
Step 4: Nu-Derm Exfoderm – For Normal/Dry Skin
Step 5: Nu-Derm Blender
Step 6: Nu-Derm Sunfader SPF 15
Step 7: Nu-Derm Healthy Skin Protection SPF 35

Neocutis Blanche Skin Lightening Cream

Neocutis Blanche Skin Lightening Cream: the #2 recommendation

The Neocutis Blanche Skin Lightening Cream contains 4% hydroquinone and actually disrupts the skin’s darkening cycle, so you should see noticeable improvement in your hyperpigmentation in as little as four weeks. This is a fast-absorbing cream that improves your skin’s brightness and radiance.

Lumixyl MD Products

Lumixyl MD products: the # 3 recommendation

The advanced peptide technology of the Lumixyl product line reduces the production of melanin to improve skin tone. You’ll notice a brighter complexion with only 8 to 10 weeks of use. This formula will not cause an allergic reaction and your skin will not become more sensitive to the sun. Plus, it’s safe for prolonged use.

If you suffer from the chronic skin condition of rosacea, Dr. Joel Schlessinger can help: here are his three favorite products for the condition.

Tuesday, April 17th, 2012

If you have Rosacea, the blood vessels beneath your skin are swelling, causing redness and perhaps skin sores that resemble acne. Typically, people with this condition are between the ages of 30 and 50, with fair skin. Women get Rosacea more often but, if a man gets the condition, symptoms are often more severe. See the PubMed Health article on Rosacea from the U.S. National Library of Medicine for more information about the condition.

La Roche-Posay Toleriane Purifying Foaming Cream

The doctor recommends that you use La Roche-Posay products if you have Rosacea.

The entire line is good for people with the condition, but he especially recommends La Roche-Posay Toleriane Purifying Foaming Cream. This is a creamy, water-activated, fragrance-free and preservative-free cleaner specifically designed for people with intolerant skin. The lather is smooth and gentle as it rinses away traces of makeup and impurities.

La Roche-Posay Rosaliac Anti-Redness Moisturizer

A second product from this line is one of the doctor’s favorite products for Rosacea: La Roche-Posay Rosaliac Anti-Redness Moisturizer. This is a light green fragrance-free moisturizer than neutralizes the redness in your skin. Plus, it’s a soothing product, providing relief. After use, your skin will be calmer and more radiant.

Dr. Joel Schlessinger has a final recommendation: use the Oxygenetix line to heal and camouflage multiple skin conditions, including Rosacea.
Oxygenetix line of moisturizers and foundation makeup
This line (Oxygenetix moisturizer and foundation makeup) contains medical-grade ingredients and so is only available through physicians and medical professionals. This product line is also an excellent choice if you have wounds, rashes, injuries, scars and/or dry skin.

Looking to reduce wrinkles around the delicate eye area? Minimize dark circles? Dr. Joel Schlessinger recommends his favorite three eye creams.

Friday, March 30th, 2012
Obagi ELASTIderm Eye Treatment Cream

One of the best eye creams available, the doctor explains, is Obagi ElastiDerm Eye Treatment Cream, which visibly lifts the skin around your eyes and works to restore skin elasticity in as little as two weeks. You’ll love how much firmer and more resilient the skin around your eyes will become and you’ll love the reduction in visible fine lines and wrinkles.

Thanks to the Penetrating Therapeutics technology of Obagi, the copper malonic acid in this cream can help to nourish the growth of new cells deep into the skin while the blueberry extract provides antioxidants that fight free radicals. This is a rich cream with a smooth consistency and should be used twice a day; it’s ideal for normal to dry skin.

Another excellent choice is Neocutis Lumiere Bio-restorative Eye Cream with PSP®.

Neocutis Lumiere Bio-restorative Eye Cream with PSP

Neocutis Lumiere Bio-restorative Eye Cream  is an ideal choice when you need to minimize dark circles beneath your eyes. This product is soothing and refreshing and it softens the appearance of fine lines and wrinkles. It’s a rich cream and, when used regularly, you can see results as quickly as six weeks.

Hyaluronic acid in the cream provides hydration, while the PCP® helps to prevent premature aging; caffeine helps to reduce puffiness and dark circles — and the combination of these three ingredients work together to reduce the signs of fatigue.  This eye cream is fragrance free, gluten free, PABA free and color-additive free.

Dr. Joel Schlessinger makes one more eye cream recommendation: Teamine Eye Complex.

Teamine Eye Complex by Revision

This is one of the most popular eye creams at for reduction of under eye circles. This light, creamy, fragrance-free product helps to firm and tighten your skin, which reduces the appearance of fine lines and wrinkles. Plus, your complexion can be brightened by the light-diffusing technology of the cream.

Ingredients include vitamins K, E and C, plus green tea extract. This product works well with any skin cream regimen.