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I think that the failures of Enron and WorldCom and other companies are partially failures of investors to recognize companies that are selling for a thousand times nothing, but chances are they may be worth only that.

In an era of endless innovation and constant disruption, what is any company really worth? How does a startup determine its valuation?

Buying only what you know can end in disaster. Just think about Enron's employees and business partners, the 'locals' who bought lots of its stock because they thought they were in the know.

I couldn't have predicted the business would be worth so much. I could see that we would have this sort of market share, but I didn't realise the numbers would be so large.

What Enron was doing, what caused investors to embrace it in a rapture of baffled awe, was hiding debt.

The collapse of Enron was devastating to tens of thousands of people and shook the public's confidence in corporate America.

In 2000, just before the first dot-com bubble burst, it cost a whopping $5 million to launch a tech startup.

I bought a company in the mid-'90s called Dexter Shoe and paid $400 million for it. And it went to zero. And I gave about $400 million worth of Berkshire stock, which is probably now worth $400 billion. But I've made lots of dumb decisions. That's part of the game.

I helped start a ceramics company called CPS Technologies. We took it public in 1987 at $12 a share. Three months later, there was this horrible cliff: Black Monday. Fidelity had bought 15 percent of our stock, and their algorithm caused them to dump it all onto the market that day. We dropped from $12 to $2.

Enron had already collapsed and filed for bankruptcy protection by the beginning of 2002. But despite complaints from short sellers that corporations had used accounting gimmickry to inflate their profits, many investors thought the crisis at Enron was an isolated case.