Zhao is an early investor in China’s class-A shares and has an investment philosophy very similar to Warren Buffett.

He has previously liquidated all five of his firm’s mainland funds to lock in profits from China’s market enormous gains. He started selling when price to earnings ratio grew too high.

The online auction is being hosted by eBay as part of its Giving Works initiative and ends at 10pm ET this coming Sunday, June 27. Bidders must pre-qualify before they can bid.

Based on the bidding from previous years, the final bid should easily go into six figures. However, Warren Buffett does come with “free shipping” according to the auction site.

Last year highest bid of $650,100 came from Mohnish Pabrai and co-bidder Guy Spier.

For the not-so-rich, you can bid on a Monopoly board and box signed by Warren Buffett.

The auction for the Monopoly board ends Wednesday, June 25, just before 3:30pm ET while the auction for the Monopoly box finishes Thursday, June 26, just after 6:30pm ET.

You can also watch the 42-minute video of the entire session here:

Warren Buffet in IMD Business School

It’s available online until 19th Jun 2008.

I have also compiled and rephrased some of the questions posed to Warren Buffett and his replies below.

How do you manage all your companies?

I don’t. The key to management is about getting things done by other people. I can’t run those business as I don’t know a thing about them. I have managers I don’t see for three or four years. On the other hand, there’s one I talk to every day. We have no company meetings.

There’s a 2-page letter they get from me once every two years. I tell them we have all the money we need, but we don’t one ounce of reputation we can afford to lose. Never trade reputation for money. Never do anything that you do not want to appear on the front page of the newspaper. If there’s anything close to the line, you can forget about it.

I also asks them about the succession plan - what I should do if they were no longer around.

Is there a key management style that you look for?

They have many different styles. A good many of them have MBAs. A couple of them did not go beyond high school. They are leaders in their own way. I’m often amazed in the different shapes and forms they come in. They all have passion for the business. They have qualities that would cause people to want to follow them over the mountain. People believe in them.

You buy companies forever?

Yes. We have no exit strategy. We have an entry strategy but there is no end game. We just want to keep on adding more and more good businesses.

I buy the right business with the right people at the right price. They have long term competitive advantage with people who are passionate about the business. I don’t check out all the details. I have in mind what the business will be worth in the long term. I don’t need a big team of lawyers or financial guys to do the due diligence. I don’t believe in farming out the due diligence.

I trust the owner to run the business exactly the same after the acquisition as he did before.

What is it that holds Berkshire Hathaday together?

It’s the culture. Something to do with developing in the culture. After a while, it creates its own momemtum. People self select themselves. We pay our directors $900 a year. People buy into the culture and want to be part of it.

Do you consider Berksire as a family business?

Yes, we consider Berkshier a family business. We have our principles laid out for decades and we don’t change them.

What is your succession plan for yourself?

We have three people identified by the board. The person who succeeds me should be relatively young. It helps to have a long run at the job. I do not want to hand it over to someone who will only be here for three or five years.

How important is money to you?

I have all that I need ever since I was in my mid twenties. I have a job I love, around people I love and they like me, I get to do what I like to do every day. I eat well and have a house that is warm in winter and cold in summer.

The standard of living does not equate with the cost of living. Up to a point it does, and then you leave that point. I want to be around my friends; to be able to do what I love to do. Fortunately, I’m able to do it.

All my Berkshire shares will be going to charity, but it doesn’t involve a single sacrifice on my part. They are just a branch of certificates sitting in a safe deposit box. I have everything that I need in the one percent that is sitting outside of Berkshire. They can take care of me more than a normal human being can ever hope for. The rest can go back to society as society has enabled me to do what I do.

I told my children what my dad told me. “Anything you do (as long as it’s legal), I’m behind you. I’ll back you. You don’t have to be me. You have to be you.” What they do is more important than what I do. They have to follow their own passion.

What is your own definition of success?

I would measure it by the number of people who love you when you are sixty or seventy.

Where does that passion and energy come from?

I was lucky in terms of the parents I have and where I was born. I had all kinds of opportunities. I had a good education, and I was wired in a way that made me good in allocating capital. I was lucky that I managed to find out what I liked to do when I was very young.

I was able to play in the game that I wanted to play virtually all my life. I never had to compromise in terms of doing something that I really didn’t want to do because my kids were hungry.

The most important thing (besides your parents) is picking the right spouse. If you have the right spouse, a lot of good things are going to happen. I was very, very lucky in that aspect.

One thing you mentioned is that Berkshire is nowhere near as prominent as it should be in Europe. Why there and why now? With the weak dollar, this might not be a good time.

I should have done it earlier. I haven’t and I’m correcting the mistake now. We should be on the radar screen not only in Europe but also in Asia. We do have something to offer to certain businesses. It might not be important to them today. If you have a great family business, keep it. But there might come a time when a change is necessary. I want to be on that radar screen so that when the time comes, people will think of calling us.

What does Berkshire Hathaway bring to the table that other companies do not?

Freedom to continue doing what they are doing. To be part of something bigger and to prepare for the future. They can get rid of any bankers or wallstreet that they need to please. They have someone who appreciates them. We don’t have many competitors.

Are you looking at Asia?

We are always interested in business as long as they meet our size requirements. Certainly there are some in Asia. In terms of marketable securities, I look all over the world all the time. We bought some in PetroChina a few years ago.

You have a remarkable return of about 21%pa since you started investing. How do you do it?

I try to buy things that I understand. I look at the stock market as a place to buy businesses, not at a place where the prices move up and down. I have a very fundamental approach which I was lucky to learn when I was nineteen years old by reading the right book called “The Intelligent Investor“. Reading that book changed my life in a big way. I learn a few things over the year but I had the right framework from Benjamin Graham.

Do you feel that US policies in place today are still weakening the strength of the US dollar?

We are doing pretty much what we have been doing in recent years. When you do what you have been doing over and over and you expect to get a different result, that’s insanity.

End of compilation -  Note: A more complete version of the transcript has been uploaded here: Warren Buffett Interview.

Warren Buffett comes across as a very humble person (he certainly is) and is well liked by many people. He’s a great success we all have much to learn from.

It appears the federal government is likely to follow policies that will make the dollar even weaker. Warren Buffett continues his bearish stance on the U.S. dollar but does not feel the need to hedge on other currencies.

As a result of the weakening U.S dollar, Warren Buffett said he was happy to invest in overseas companies as currencies in those countries are not likely to decrease relative to the U.S. dollar.

On Future Returns 

Buffett: We would be very happy if we earned 10%, pre-tax. Anyone that expects us to come close to replicating the past should sell their stock; it isn’t going to happen. We’ll get decent results over time, but not indecent results.

Munger: You can take what Warren said to the bank. We are very happy at making money at a rate in the future that’s much less than the past… and I suggest that you adopt the same attitude.

On Berkshire 

Buffett: We think Berkshire is an attractive investment. We don’t think it’s the most attractive in the world.

On Future Investments

Buffett: We are happy to invest in businesses that earn their money in euros in France or Italy or sterling in the UK, because I don’t have a feeling that those currencies are likely to depreciate against the dollar. Overall I think that the U.S. continues to follow policies that will make the dollar weaken against other major currencies…. I feel no need to hedge purchases of companies that earn profits in other currencies.

On the Economy 

Buffett: I haven’t the faintest idea. We never talk about it, it never comes up in our board meetings or other discussions. We’re not in that business, we don’t know how to be in that business. If we knew where the economy was going, we’d do nothing but play the S&P futures market.

On the Single Best Investment Idea for an Individual in His 30s 

Buffett: I would just have it all in a very low-cost index fund from a reputable firm, maybe Vanguard. Unless I bought during a strong bull market, I would feel confident that I would outperform…and I could just go back and get on with my work.

How Berkshire Would Invest if it Had Only a Few Million Dollars 

Buffett: That would open up thousands of opportunities. There were very mispriced bonds that we could buy nowhere near enough of to make a difference to Berkshire. Most of the opportunities would probably be in small stocks or in specialized bond situations.

On Succession

Buffett: On the CEO front, we have three who could step in. The board is unanimous in knowing which one it would be, although the answer might change with time…. In terms of the investment officer, the board has four names, any one or all of whom would be good at my job. They all are happy where they are now [working outside of Berkshire], but any would be here tomorrow if I died tonight, they all are reasonably young, and compensation would not be a big factor…. There will be no gap after my death in terms of having someone manage the money. They’ll be much more energetic and may even have a better record.

Munger: We still have a rising young man here named Warren Buffett. And I think we want to encourage this rising young man to reach his full potential.

Buffett: At the average age of 80, we’re aging at the average rate of only 1 1/4% per year. That’s a lot better than younger people.

Whether Berkshire Would Buy Entire Private Companies in China or India

Buffett: We would like to. If we get lucky, we’ll buy one or two in the next three or four years. I don’t know if it will be in China, India, Germany, the U.K. or Japan — there’s a lot of luck in that in terms of families thinking of us specifically…. But you will see the day that BRK owns businesses in both countries.

On Dividend Payouts 

Buffett: The test is whether you can continue to create more than $1 for every $1 you’re retaining. If we can turn $1 in dividends into $1.10 or $1.20 on a present-value basis, they’re better off if we don’t pay out. When the day comes, it should be paid out. But because we still have this ability to redistribute money in a tax-efficient way within the company, we can reallocate it, where it will earn a higher return than shareholders may be able to on their own.”

The recently announced deal meant that Berkshire Hathaway will have a minority stake in Wrigley. The purchase price of US$80 a share is a 28 per cent premium over Wrigley’s closing price of US$62.45 last Friday.

• Why the efficient market theory is misguided.
• Why it is very difficult to regulate people.
• His thoughts about the election.
• His first job.
• How he gets his ideas.
• His advice to you if you are not a professional investor.
• The extreme leveraging in the current turmoil.
• The impossibility of understanding CDOs.

I always say you should get greedy when others are fearful and fearful when others are greedy. But that’s too much to expect. Of course, you shouldn’t get greedy when others get greedy and fearful when others get fearful. At a minimum, try to stay away from that.

Click here to read the entire story.

• Warren Buffett is a big believer in value investing - buying shares that are trading at a lower price than the value is actually deemed to be.
• He gives key consideration to the “margin of safety” when deciding which share to buy. This refers to the difference between the market share and the intrinsic value.
• His investment philosophy is to look at the fundamentals and the economics of the business and what he thinks is the value of the company.
• When he looks at a business, he makes sure the company has a share of its customers’ minds.
• He’s extremely humble and modest.
• To be a good stock-picker, one must have your own investment style, and also be a good communicator.
• Warren Buffett used to be afraid to speak in public and had to take public speaking classes from Dale Carnegie.
• Be a good human if you want to be a good business.
• And lastly, the biggest takeaway is to follow our passion and to follow it keenly regardless of what people may think, to do it seriously, and to do it well.

All these while, when you read about Warren Buffett, you read about his achievements as an investor and that he is the richest man on earth. But when you meet him in person, you immediately see that he is a very humble man for someone in his position.

The session was conducted over a video conference. These are some points from Warren Buffett:

• Develop your own talents.  Oral and communication skills are especially important.
• The Fed’s recent bailout of Bear Sterns was wise as it prevented an economic disaster.
• However, a bit more caution is needed to stimulate the economy. Too much money is no good.
• He doesn’t need a stock quote to know whether he made a good or bad investment. He looks at the financial information before he looks at the price and if he finds something, he will reach for his checkbook.
• While it has been tough to do what he did, he didn’t really have to make too many sacrifices.