With regards to other banks -- and knowing what warning signs to look for -- Buffett pointed to WaMu, the bankrupt holding company of what was Washington Mutual Bank and once the largest U.S. savings and loan company. U.S. regulators seized the bank Sept. 25, 2008, and its deposits were sold to JPMorgan.
"There were a lot of signs that they were doing things that a highly leveraged institution shouldn't be doing. Some of those big institutions did some stupid things. I would say most of them," he said.
Buffett noted, again, that "Wells has the best competitive position out of the largest banks in the country."
As far as investors doing their homework and looking for the "warning signs," he said, "the information is there. It was pretty clear what was going to happen with Fannie and Freddie. The government was telling them for months to go out and raise more capital. You take one look at them, and you could see they were in trouble."
As for who would replace him as CEO, Buffett -- who is 78 -- said, "If I were to drop dead tonight, someone is in place to take over."
He said there are already candidates lined up as possible successors.
Buffett addressed other sectors of the economy during the meeting.
On residential real estate and where it's headed, Buffett is optimistic that there is evidence of more stability and improvement.
"We don't know what real estate will do; it's hard to tell. But I will tell you this, from what I'm seeing, in the last few months, we've seen a real pick-up in activity [in medium- to lower-priced homes]. We haven't seen a bounce back in price. But it looks as if -- based on our real estate brokerage data -- we see something close to stability at these much reduced prices."
He added, "We create 1.3 million households a year. Fewer in a recession. But if you create 2 million starts annually, you're gonna be in trouble, and that's what we did -- created over capacity. So we have to absorb excess supply. We are eating up excess inventory now."
According to Buffett, there are three choices:
"One, blow up 1.3 million homes; two, start creating more children and force them to marry sooner; three, or just slow building and wait for demand to balance out with supply."
The Berkshire executives were also asked about the future of U.S. healthcare and the Obama administration's current ambitions to make reforms.
"I believe that eventually something like Europe['s healthcare] will come to course, and although I'm a Republican, I'm not horrified by that," Munger said. "But personally I wish they would put it off for a year and work on current economic crises."
When asked what long-term effects the economic crisis will have on the nation, Buffett focused on a more subdued and conservative consumer.
"By change in consumer behavior, I think the experience of the last few years will last for a while," he said. "For years, the government has been pushing Americans to save more. Ironic, now that they are, the government doesn't like it."
Buffett went on to say that shopping and retail will look significantly different. "Retailers will be struggling the most, the shopping center business will continue to [take] a very tough hit. I wouldn't look for any quick relief for retail services."