Question: Asbestos, held those shares through the bankruptcy even tho — can you explain one of US equity was the same.
A shareholder asked Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio) about why they kept USG Corp. (USG, Financial) through the bankruptcy.
WB: I don’t think you remember all the details.
CM: It was very cheap.
WB: On USG we owned a very significant percentage like 30%. USG overall has been disappointing because the gypsum business has been disappointing. I think they went bankrupt twice because they had too much debt. It has not been a brilliant investment. If gypsum went up to what it was some years on the past, we would have done a lot better. Gypsum has taken a real dive several times and there has been too much gypsum capacity, and when it comes back the management have been not only of use but have gotten more optimistic than they should have. It's a business where the supply has been significantly greater than the demand in a lot of years. You’ve seen housing starts since 2008-9 not come back anywhere near where people anticipated, so gypsum prices have not moved up dramatically. So just put that one down as not one of our brilliant ideas. Not a disaster.
