First, his office had changed a little bit since I was there a couple of years ago. He now has model trains everywhere, emblematic of his recent buy of Burlington Northern Santa Fe -- apt gifts, because Warren has been a model train collector since his childhood. Phil had brought him a 1930s Lionel catalog, which Warren read eagerly, Citizen Buffett with his Lionel trains Rosebud.
I asked him why he thought Burlington Northern was such a great buy and he answered in characteristic fashion...with numbers. He explained that Berkshire had gotten so big that even a very successful small purchase would hardly affect earnings at all.
But a medium successful large purchase would be more helpful. (He explained this with numbers in such a rapid fashion that it was as if a computer were spitting out the analysis, which, in a way, it was. He is so astonishingly facile with numbers that it is almost eerie.)
I did not have the wit to ask him how one defined value in a constantly shifting world. We all agreed that interest rates would change towards the upside at some point, although we did not know when or by how much (of course).
Buffett, like everyone else, is mystified by the Japanese example of super high deficits, a huge national debt, and no inflation and ultra-low interest rates. Something like that is apparently happening here, he suggested, which we would all agree is true (although this week's producer prices number was worrisome and had not come out as of our dinner). But why it is happening now and did not happen in the past (there was inflation between 1933 and 1937, in a far worse economic environment), no one knew.