
Warren Buffett’s Best Investment - jonbaer
https://www.gatesnotes.com/2017-Annual-Letter
======
hxta98596
It's hard not to be impressed by what the Gates Foundation is doing. I don't
think they get the full recognition they deserve sometimes, maybe because much
of their work is abroad in the poorest countries in the world.

Hard to fathom the number of people out there in the world thankful and who
owe their lives to the foundation choosing to help their community or their
cause.

With that said and not to diminish the good work. It is sad and eye-opening
more progress has not been made on these issues.

I think when you really look at the numbers, besides seeing the positive
trends one can also see how truly difficult, large and complex these problems
are. The foundation has $50 Billion dollars! And Bill can get pretty much any
world leader or other billionaire CEO to take his phone calls. Yet, sorry that
is not enough not even close. The foundation has to focus on very specific
issues and even then it hasn't "gotten to zero" where it wants to (though
Polio is close, down to 37 cases). Private foundations can only do so much,
the scale of these problems really requires the cooperation of governments.
I'm not sure what can be done on that or what that means, just a bit
breathtaking how governments can help people or really screw things up on a
scale nothing else even comes close to.

~~~
robocat
I wonder how much of this particular philanthropy is just giving back money
that those countries spent? I.e. Microsoft licences, or balance of trade with
the donor countries?

A kind of benevolent taxation?

~~~
ams6110
I'd be more fearful of corruption in those countries. This is where so much
foreign aid falls apart, it's siezed by the government, distributed to their
favored constituents, and never makes it to the people who really need it.

~~~
alykhalid
Bill gates talks about corruption in his 2014 annual letter (1). Search for
the word "corruption" if you don't want to the read the whole letter. TLDR:
Its manageable.

(1)[[http://www.gatesfoundation.org/Who-We-Are/Resources-and-
Medi...](http://www.gatesfoundation.org/Who-We-Are/Resources-and-Media/Annual-
Letters-List/Annual-Letter-2014)]

------
cs702
To Bill and Melinda Gates:

It was really uplifting to read this post.

Because of it, the world now looks a little brighter to me.

We're all surrounded by alarmist news every day and often lose sight of the
big picture.

PLEASE write a post like this one at least once a year :-)

~~~
antongribok
Not exactly the same, but they've done similar posts the last two years:

[https://www.gatesnotes.com/2016-Annual-
Letter](https://www.gatesnotes.com/2016-Annual-Letter)

[https://www.gatesnotes.com/2015-Annual-
Letter](https://www.gatesnotes.com/2015-Annual-Letter)

Also, the annual reports are quite interesting as well:

[http://www.gatesfoundation.org/Who-We-Are/Resources-and-
Medi...](http://www.gatesfoundation.org/Who-We-Are/Resources-and-Media/Annual-
Reports)

------
OliverJones
You don't need a Gates- or Buffett- sized pot of money to make a difference.
Sure, they can, and do, place massive orders at vaccine factories to get
economies of scale. That's how a dose of the pentavalent vaccine comes to cost
about the same as the CD that Windows used to arrive on. You probably can't
place a US$50M order at a pharma company. But that's OK.

You can find a local NGO or charity that promotes, I dunno, literacy or first-
generation college students or refugee settlement, or something. What matters
is that they do a good job and you're interested in their mission. You can
commit to supporting them with a regular cash gift. That kind of regular gift
lets a charity plan their work. (One-off gifts are good too, but they don't
have the planning benefit.)

But be careful: they may want you on their board of directors. :-)

~~~
derefr
Giving money to any charity is potentially better for the world than giving
money to _no_ charity. But part of the premise of this article—and of the
Gates Foundation—is that some charitable acts have much higher ROI (in lives
saved per dollar, or whatever other metric you might want to measure by) than
others, and you should focus on those if you want your money to go furthest in
doing good in the world.

This approach is usually known as "effective altruism" — there's a whole part
of the blogosphere hanging off that keyword. But conveniently, I can just link
to [http://www.givewell.org/charities/top-
charities](http://www.givewell.org/charities/top-charities) — this is a (very
well-researched) consensus list on which charities turn "dollars contributed"
into "good done in the world" most effectively.

Reasonably, the entries on GiveWell's list match pretty well with the strategy
of the Gates foundation (i.e. vaccines et al.) The differences in the Gates
Foundation's strategy mostly come down to the fact that economies of scale for
solutions work out differently when you have millions vs. billions of dollars.

Of course, you're allowed to disagree with the ranking criteria the EA people
use—maybe the global number of "quality-adjusted life-years" people get to
live isn't the #1 thing you care about optimizing.

But even if you disagree about the particular charities, EA—and the parent
post—still have an important point you should understand: no matter the
charity, _contributing money_ is almost always higher-ROI than _volunteering_.
(It might feel "lazy", but it's the principle of comparative advantage: the
person a charity could _hire_ for the money you can earn in time X at _your_
job, will almost certainly do more good for them than you'd do by volunteering
X hours of your own time.) And that "get the highest ROI for my charity
dollar" mindset is what's important, no matter what you're measuring ROI in
terms of.

~~~
OliverJones
Keep the old slogan in mind: the best is the enemy of the good. Even the Gates
Foundation had to try various things as they were getting started. So can you.
Don't overthink it.

------
woodandsteel
You know, we get a fair number of commenters here at HN who are cynical about
the world, who say everyone with any power is corrupt, things are getting
worse, and there is nothing you can do about it.

Whenever someone like that shows up, perhaps we can refer them to this letter.

~~~
mvp
I doubt that'll work. Once we develop a cynical view of the world, it's quite
easy to see the negative side of everything.

Just for example, take the biggest benefit claimed in the letter of 122
million children saved. It seems to suggest that it's because of their work.
Has nobody else anywhere , including those in the affected countries done
anything to save the children. Why do they or anybody think that all of this
can be attributed to to the Gates foundation!!

Moreover as the Gates foundation is focussing on childrens' lives, does it
make any sense for anybody with lesser resources than them to tackle this
problem? There is no chance of getting any recognition, as Gates foundation
will claim it and it will be hard to argue against as well.

These are not my views, I'm just saying that it's possible to have these
thoughts if you are cynical.

~~~
agilo
To your first point, if a cynic prefers to credit more than a single
foundation or individual for those gains, then that must be so benevolent of
them to think so well of a greater number of people. Let us all be cynics
then.

------
wyc
I truly applaud the efforts of the funds. I don't think I could come up with
any more noble endeavor, and I know there are some very capable people
throughout their organizations who are dedicated to spending the funds wisely
and impactfully.

However, is it fair to credit philanthropy as the sole cause of quality of
life improvements across the most destitute populations?

    
    
        It's a story about the stunning gains the poorest people in the world have made
        over the last 25 years. This incredible progress has been made possible not
        only by the generosity of Warren and other philanthropists, the charitable
        giving of individuals across the world, and the efforts of the poor on their
        own behalf, but also by the huge contributions made by donor nations, which
        account for the vast majority of global health and development funding.
    

I think there is a fair amount of evidence that suggests development funding
can have as much disastrous consequence as good. In his book The Great
Escape[1], Angus Deaton (Nobel Prize economist) describes how non-
interventionist economic development seems to have been the main driver of
better outcomes across the world, and not the flush pockets of westerners, as
convenient as that would be. Another book called The Road To Hell[2] provides
many examples where large charitable efforts regularly produce even worse
outcomes than no intervention at all. Is there some good evidence to suggest
that the money spent by the Gates Foundation and other charities were solely
responsible for the improved qualities of life across whole populations?

If you want to posit that their efforts have been invaluable in improving
access to medical services across the globe, you'll get no argument from me.
However, that's a small part of what makes up "stunning gains."

[1] [https://www.amazon.com/Great-Escape-Health-Origins-
Inequalit...](https://www.amazon.com/Great-Escape-Health-Origins-
Inequality/dp/0691165629)

[2] [https://www.amazon.com/Road-Hell-Michael-
Maren/dp/0743227867](https://www.amazon.com/Road-Hell-Michael-
Maren/dp/0743227867)

~~~
pvg
Even the quote you've pulled doesn't claim the outcomes are due _solely_ to
the efforts of charities. The Gates foundation has a strong focus on health
issues (just about everything listed in the report, for instance) and not the
sort of aid the books you mention are criticizing.

------
obilgic
I wish Bill or Warren would have run for presidency as an "outsider" instead
of Trump. I guess our only hope will be their successor Mark (Zuckerberg)

~~~
foxylad
Bill and Melinda are better where they are, because they are free from
political interference. Can you imagine the opposition they'd get from the GOP
for pushing contraception so centrally? And if they get into power, probably
from the democrats too, for not focusing on their favourite bandwagons.

OT: Can someone explain the GOP's strident opposition to funding
contraception, both domestically and in the US's foreign aid? Apart from the
obvious problems with unrestrained population growth, I'd have thought that
aversion to abortion would imply whole-hearted support for contraception.

~~~
vacri
There are a lot of Catholics on the conservative side of things, and
contraception has been verboten to Catholics since the early days ("sex is for
making babies, not fun" is the company line)

~~~
vkou
This is quite false. Catholics split the democrat/republican vote ~50/50\.
They voted for Gore, Bush, Obama, and Trump with small margins. [1]

They care about this question, but not very much. Evangelicals, on the other
hand overwhelmingly vote republican.

Catholics, in general, are the most liberal religious denomination in the US.

[http://www.pewresearch.org/fact-tank/2016/11/09/how-the-
fait...](http://www.pewresearch.org/fact-tank/2016/11/09/how-the-faithful-
voted-a-preliminary-2016-analysis/)

~~~
vacri
Looking more closely at your link, the white catholics were more likely to
vote for Trump than protestants were (higher than anyone except evangelicals),
and as I understand it, it's white catholics that are the most prominent in
congress.

Sorry, I meant politicians (as the parent referenced the GOP) rather than
laypeople.

~~~
vkou
Trump overwhelmingly won among white voters - with 58% of their vote. White
white catholics voted... Pretty much the same way as white non-catholics.

Comparing white catholics to all protestants is comparing apples to oranges.

Catholics are only slightly over-represented in congress, at 30% of Christians
in congress (While making up 24% of the Christian population in the US.) They
are also split 68/70 between democrat and republican. [1]

They may be prominent, but they aren't trying to turn the country into a
theocracy.

[1] [http://www.huffingtonpost.com/2015/01/05/congress-
religious-...](http://www.huffingtonpost.com/2015/01/05/congress-religious-
affiliation_n_6417074.html)

------
hans0l074
I was wondering today after reading this - what are the statistics on the next
stages of the lives of these children? Saving their lives is, undoubtedly, the
most important thing anyone can do. I think it's also important to see that
they continue to have good lives well into adulthood (perhaps even learning
about the frameworks that helped them survive as a baby?). In countries like
India (where I'm originally from), child mortality rates have improved, but
there seems to be this gravity well made of a mixture of superstition,
religion, illiteracy, caste-based nonsense that is difficult to escape from.
And this does not help translate this victory into winning the long-term war
on poverty.

------
perseusprime11
"All lives have equal value"

I hope one day all governments across the world operate with this principle.

Gates foundation is doing some amazing work. Looking forward to their
contribution in the coming years.

~~~
Retra
That's only true if you ignore the practicalities and only speak of life in
the abstract. Some people, through their deplorable deeds, have made their own
lives distinctly less valuable.

------
wallace_f
It is an envious position to be in where you can positively impact such an
incomprehensible number of human lives in the best of ways.

It's incredibly heart warming how many people have been saved by the Gates
Foundation. Although, the realist in me worries about the possibility that in
the long-run, civil liberties and human rights are also of importance to
humanity in saving human lives, and human dignity.

Without going into an argument about the relative importance, shouldn't at
least some significant portion be distributed towards solving the human and
civil rights, liberties, and justice abuses here in America?

After all, the reason Bill Gates and Buffet are in a position to be able to
help so many people is due the world they grew up in. The opportunities they
were given. A large part of that is individual human liberty. Had Gates lived
in another time, and been arbitrarily detained during one of his two arrests
for refusing to unlock his electronic devices, would he have encountered a
legal battle that derailed his entrepreneurship? If he was a minority, would
the police had treated him the same way? If he was abused by the police the
way Ian Murdock allegedly was, what would have happened to Gates? Would we
have lost the opportunity to save 122 million lives to date through the Gates
foundation?

~~~
cleansy
> Without going into an argument about the relative importance, shouldn't at
> least some significant portion be distributed towards solving the human and
> civil rights, liberties, and justice abuses here in America?

I would guess that a country with stable institutions, high GDP per capita
value, democracy and the highest absolute military spending this issue could
be addressed in the ballot box. In the richest democracies on earth fixing
these issues is a question of resource allocation. And plenty of organizations
are working towards that already.

~~~
wallace_f
> this issue could be addressed in the ballot box

I don't believe that is true. Recent history is especially illustrative of
this.

~~~
idiot_stick
> _Recent history is especially illustrative of this._

Are you referring to Trump's election?

Well, some people's problems _were_ solved by the ballot box, and they got
their man elected. The fact that you disagree with the politics doesn't negate
the system working as intended.

~~~
wallace_f
Well, for instance, I supported clemency for Bradley Manning, and that Edward
Snowden should be honored as a patriot for risking his own welfare to stand up
for the people of America against illegal government abuses. I had no choice
in the election in that matter. I did have some hope with Bernie, but all of
the subversion against him by the DNC my hope was burned to shreds.

So there's an example of how, one of the most important issues, has no ability
to be addressed in the ballot box in recent history.

------
erikpukinskis
I appreciate these efforts, but my mind is drawn to a somewhat orthogonal set
of tactics.

When I see stats like $1 of vaccines releasing $44 of economic value, I think:
there is a market opportunity here.

The question I keep asking is: what would a hedge fund look like that was
making a bet that most people in poverty could produce the $44 if we invested
the $1? What kind of corporate structure would be needed to distribute the
resource AND reap part of the economic value?

Similar hedges can be made everywhere. If I believe black people are worth
more than their social status (and commensurate credit access) would
suggest.... how do I make that bet with cash?

You can answer "microfinance" but that's just phrasing the question in a
different way. The real issue is: how, exactly?

It's not an easy question to answer, but I think unlocking it is a trillion
dollar opportunity. You are essentially betting against the entire class of
employers. Seems stupid, but so did Michael Burry's bet against the entire
class of mortgage lenders.

~~~
imaginenore
It's not like there's a simple way to invest $1 and extract $44. That $44 is
diluted in the total GDP. There's also a quite low limit on how many people
you can vaccinate, even if you offer it for free.

This kind of thing is quite profitable for the government though, because they
get to collect that $44, even if it is diluted.

~~~
erikpukinskis
I don't need a simple way, I just need a way.

The way I am currently pursuing it is basically to build an agency (like a
Hollywood agency) for people in poverty and use automation to get economies of
scale so it can survive on many slices of small payouts. It's not simple, but
it's the only thing I can think of.

Arguably TaskRabbit and Uber are a version of this, but they target poor
working class people, not those in actual poverty.

Would be interested to hear other ideas. I don't expect any of them to be
simple.

------
FuNe
Interesting read:
[http://web.archive.org/web/20130912101039/http://www.commond...](http://web.archive.org/web/20130912101039/http://www.commondreams.org/views06/0823-26.htm)

------
WalterBright
Thank you, Bill, Melinda and Warren.

------
gadders
I see a lots of charts saying things are improving, which is great, but unless
I missed it I can't see the piece that says "We spent $xxx on initiative YYY
which caused this improvement."

~~~
allworknoplay
Yeah, nobody here appears to have paid attention, but in this piece Gates
fails to differentiate things the foundation has actually done from all the
major international public health accomplishments of the last 25 or so years
-- it's pretty out there when you think about it. The most specific claims
made were about the foundation's participation in groups addressing two of the
issues.

------
johnwheeler
One of the coolest things about this letter is it's presented in numbers--the
format Warren appreciates the most.

------
justinph
Ghostery identifies 10 trackers and uBlock shows 7 advertising scripts, which
seems like a lot for a page that you'd think shouldn't need advertising.

The page doesn't even display if you block some of these scripts. This is
terrible.

~~~
johnpowell
I get this...

[http://imgur.com/a/y7nmQ](http://imgur.com/a/y7nmQ)

~~~
aembleton
Yep, I just unblocked the whole site in uBlock. There is tracking but no
annoying adverts that I would want to block so I just let it through.

------
gtallen1187
This is amazing. Thank you Bill, Melinda, and Warren.

------
giarc
For anyone interested in why polio hasn't been eradicated, it is likely
related to the capture of Osama Bin Laden.

[https://www.theguardian.com/world/2011/jul/11/cia-fake-
vacci...](https://www.theguardian.com/world/2011/jul/11/cia-fake-vaccinations-
osama-bin-ladens-dna)

~~~
jeron
I highly doubt this is truly the reason

~~~
mattnumbe
"Over the weekend, relations were pummelled further when the US announced that
it would cut $800m (£500m) worth of military aid as punishment for Pakistan's
perceived lack of co-operation in the anti-terror fight." It might not be THE
reason, but I guess there would be less than the [1]20 cases of polio that
there are now in Pakistan if that $800m hadn't been cut.

[1] [http://www.endpolio.com.pk/polio-cases-district-
wise-2016](http://www.endpolio.com.pk/polio-cases-district-wise-2016)

------
sfblah
Rich people circle jerk. Yes I'm impressed but still.

------
chappi42
Nice <3

On the opposite number side, I hope they can help to find ways to reduce the
population growth. It is unsustainable, especially in Africa and Arabic
countries. (Pity one cannot just implement a China-like one child policy:))

~~~
dsjoerg
Here is the Hans Rosling video explaining why that's not a problem:
[https://www.gapminder.org/videos/will-saving-poor-
children-l...](https://www.gapminder.org/videos/will-saving-poor-children-
lead-to-overpopulation/)

~~~
harshreality
Seems like he's assuming changing one of these changes all: child mortality ==
poverty == lack of education == large families

High fertility rates, poverty, low education, lack of affordable birth
control, child mortality... these and other things cluster together. What's
causing what?

If you found a genie and wished for an end to kids dying in Africa, with no
intervention in any other parameters, how much do you really think that would
change the fertility rate? They're not having lots of kids just to have lots
of kids, right? There's some other underlying motivation or cause. Either the
kids are accidents, or there's a reason — perhaps an economic motivation — to
have lots of kids? What underlying reason for high fertility rates is going to
be addressed by stopping kids from dying?

~~~
willvarfar
The harsh reality is that Hans spent his life trying to educate people and get
them draw conclusions from data instead of repeating their prejudices.

~~~
chappi42
Sorry, but the harsh reality is that data (models) not always work. Especially
for complex things. Remember 'The Limits to Growth'?

His videos are certainly well made. Motion Charts let you visualize/see
numbers nicely and help popularize certain insights. But don't be too hasty
with conclusions. Much didn't work in the past. Or was know already but
knowledge alone doesn't mean that it can be implemented.

------
toastednz
I find Gates' lack of focus on environmental issues disheartening. I know he
does invest in clean energy and feels strongly about climate change, but this
doesn't really do anything to prevent deforestation NOW. I know that bringing
people out of poverty may have a side-effect of improving some environmental
parameters, but it also makes whole swathes of people start demanding more
meat, more palm oil, more cars, more disposable goods. The big international
benefactors don't seem that interested in rainforest biodiversity.

~~~
downandout
So some trees are more important than saving 122 million children? I know I'm
going to get all the nasty replies that it's a larger issue than just a few
trees, that without trees there won't be people, etc. But comments like these
are the reason that people dismiss environmentalists as nutjobs that care more
about trees than people.

~~~
orbifold
Climate change is not just about trees, but about the massive loss of
biodiversity that goes along with rapid climate change.

Sure most of Europe will be covered in pine trees, but at the same time a lot
of species, essentially all that are not able to migrate with the same speed
that the climate changes in their habitat will die out.

This article for example claims that 1/2 of the known species have died out
within this century and 1/6 will die out if nothing is done about climate
change:

[https://www.theguardian.com/environment/2015/apr/30/one-
in-s...](https://www.theguardian.com/environment/2015/apr/30/one-in-six-of-
worlds-species-faces-extinction-due-to-climate-change-study)

~~~
downandout
Again, you completely missed the point. Bill Gates is one man with a certain
amount of resources. He chose to go after a huge problem with known solutions:
hundreds of millions of poverty-induced, completely preventable, childhood
deaths. Climate change may be another worthy cause, but no one has any
business criticizing him for not choosing that particular one over saving a
massive number of children because they might cause some additional demand for
palm oil.

Find a billionaire that is doing nothing for the world and criticize them for
not doing something about climate change. Bill Gates is busy doing great
things for humanity.

~~~
toastednz
I think Bill Gates would agree that when you control the philanthropic funds
of the 2 richest people on earth then you have some obligation to spend the
money in proportion to the importance of the issues being addressed.

I won't argue the relative merits of the marginal value of a human life vs.
mass extinction of species because I'm sure we both have different values
underlying our respective views and will never convince each other of
anything.

~~~
downandout
_I won 't argue the relative merits of the marginal value of a human life vs.
mass extinction of species_

We aren't going anywhere anytime soon, and when we do, it likely won't be from
the effects of _preventable_ climate change. We may in fact have another ice
age sometime in the next several million years - but no amount of money,
protests, cutting back on emissions, carbon taxes, or other measures will stop
it. Dinosaurs had an ice age, and as far as we know they didn't have cars.

~~~
orbifold
This is precisely not about the survival of the human species, we are doing
_fine_ and humans are the most likely to be able to adapt to rapidly changing
climate and collapse of biodiversity. The issue is that the biodiversity will
recover only slowly (in the order of 10 million years) and probably won't
completely because we have left very few natural habitats anyways.

Humans have completely bypassed all the usual regulatory mechanisms that
balance the populations of all the other species and caused mass extinction
simply by reproducing well beyond what a natural ecosystem could sustain. Even
the ice age set in way slower than how fast we are currently changing the
temperature on earth.

As much as I understand that most people have an anthropocentric outlook,
especially the >30% religious fundamentalists in the US, I feel like we should
value overall biodiversity over pure human survival. Most of the programs the
Gates foundation are probably helpful in the long run for this as well. Lower
infant mortality, better access to birth control and reducing poverty will
hopefully result in slowed down population growth.

