Speaker unverified: commitment

Transcript context

…Right. Okay, I want to know what the price is. You can ask me the price. Hopefully, before you say, I'll take it or I won't take it, you know the price. In 1978, Moody said these bonds are not proper for investment regardless of price. How can that be? The other thing that you say sometimes is, how can life insurance companies make money knowing that every single person is going to die? That right? That was one of my real epiphanies. Around 1981 or 1982, one of the first financial cable shows interviewed me. The reporter said to me, how can you buy these bonds? You know some of them are going to default. This is one of those times when you just get the answer, it pops into your mind. I never thought of it before. I said, the most conservative companies in America are life insurance companies. How can they insure people's lives when they know they're all going to die? The answer is, (1) It's a risk they're aware of. It doesn't come as a shock when somebody dies. Nobody breaks into the board meeting and says, hey, one of the people died. (2) It's a risk you can analyze. They sent a doctor to your house to see if you're in good enough shape to get a policy. (3) It's a risk you can diversify. Nobody ensures just skydivers, or just people who live on the San Andreas Fault, or just smokers, but they diversify, they book. (4) It's a risk they're well paid to take. They look at me, they say this guy's going to die at 90, and they priced the policy on the assumption I'm going to die at 75. There's your margin of safety.…

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