Beyond Warren Buffet

No one gets to live forever, but sometimes, depending on who you are, there are legacies that are left behind that never die. The legendary investor, perhaps of all time, Warren Buffet, the Oracle of Omaha, will be one of those people.

It's tough to think about. The end of an era of sorts. The loss of certain new wisdoms that could be shared that will be missed in future times different from yesterday.

I can see it now. Something happens in the financial world, and someone will undoubtedly ask, "What would Warren do?" He's 94, and just last year his right-hand man, the also legendary Charlie Munger, died at the age of 99, just 33 days shy of his 100th birthday.

The fracture has begun in the future of Berkshire Hathaway, the company that Buffet and Munger headed for nearly 50 years together. You could see it in the recent May 4th annual shareholder's meeting. It was still a meeting chock full of wit and wisdom Berkshire has become known for. But it was also a rather somber affair with Buffet looking to his left several times throughout it, where his successor Greg Abel now sat in the seat long held by Charlie Munger.

In one poignant moment he even called Greg by Charlie's name turning over a question to him on energy.

The thing is, Warren Buffet, along with Charlie Munger of course, were and are the heart and soul of the company they built together, taking a virtually defunct old textile mill and turning it into a massive conglomerate that owns businesses across several industries.

Many of which are household names, mind you. Businesses such as Fruit of the Loom, Duracell, GEICO, Dairy Queen, BNSF Railway and countless others. Over the years Berkshire Hathaway also became major shareholders in other household names like Coca-Cola, Apple and others.

Abel has been well groomed to take the lead, as Buffet and Munger were always quick to inform shareholders of. They have said many times that the core values and beliefs that drove their decisions for the company will remain long after they are gone.

That may be mostly true. But still, the company after Warren Buffet is gone from this world will still be a different company. It will still bear the name Berkshire Hathaway of course, and perhaps the core values and beliefs will indeed remain. But the heart and soul will be different. And of course, future shareholder meetings will not have nearly the same draw as when Buffet and Munger sat at the table sharing their thoughts and wisdom on the financial world and the state of their business.

If Warren Buffet is not at the table at next year's meeting, will shareholders have the same enthusiasm to attend what has largely become an event unlike any other shareholder meeting ever was before it? Because that was part of the draw too. Not just that Berkshire is and has always been a great company that has handsomely rewarded investors—attending the shareholder's meeting is like going to a carnival chock full of fun things to do as well as being entertaining and full of useful information.

When Warren and Charlie would speak, it wasn't just Berkshire Hathaway investors' ears that were perked. The entire financial world intently listened too.

The fracture is that one half of the team is now absent. Greg Abel, while able (pardon the slight pun there), is still not either of the two men who he will ultimately replace. Will he be able to share new ideas and wisdoms in the same way Buffet and Munger could?

I think hardly so.

I am not saying that when Buffet is gone that the company dies along with him. I am simply saying that the heart and soul which made Berkshire Hathaway special in its own unique way does.

Berkshire Hathaway essentially is, for all intents and purposes, extensions of the two brilliant minds who ran it. It wasn't just their company or their business. It was not just a path to untold riches, although they did accomplish that. It was akin to being their child. It was a labor of love that they were deeply connected to, I think in ways that most CEOs could never be except perhaps for founders.

Even founders become disconnected in many ways. Jeff Bezos no longer leads Amazon. Steve Jobs was ousted from Apple. Bill Gates no longer runs Microsoft.

That was never the case, nor was it ever going to be when it came to Warren Buffet and Charlie Munger. But it was also their approach that felt unique. And I hate to be talking in past tense terms since Warren is still here. But again, he's 94 you know. It was their love of the business itself which always took priority over the money.

The purpose was to create value. The product of that just so happened to be money.

You can hardly find anyone who would chide either Buffet or Munger. They weren't ever seen as overly rich or greedy. They were simply two men in business who happened to be very rich. They spoke to not only their shareholders. Their words laid heavily on the regular folks as well. Their words were always inspiring and transcended their riches. And they often spoke for the people.

Warren Buffet's legacy will live on forever. That is undeniable. I hope that this year's meeting was not the final chapter in a very long and fascinating story. But we know the day will come when both chairs are ultimately lacking the brilliance we have all come to associate with Berkshire Hathaway, the company.

And the company will never be the same when that day comes. Nor will the world be, I think.

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Berkshire Hathaway: A Great Company I Can't Buy

What's not to love and admire about Warren Buffet, affectionately known as The Oracle of Omaha? A man who has been well known in the investment community as the guru of gurus—few people in the investment world fail to perk their ears up when the man speaks.

I listen too, and quite intently.

Several times I have considered buying shares of the company he runs, Berkshire Hathaway, which owns many well-known and profitable businesses like Geico Insurance, See's Candies, Dairy Queen, Pilot Flying J and many others. The company also has major controlling interests in several other businesses like Coca-Cola and others.

It's a pretty long list with lots of familiar names.

And when it comes to diversification, a key element to consider in any successful portfolio, Berkshire Hathaway is as diversified as a company can be, investing in businesses from retail to insurance to logistics, pipelines, rail roads, real estate, and banking. 

Add to that, thanks to the investing genius of Warren Buffet and his sidekick who is just as brilliant as Buffet is, Charlie Munger, it is easy to say it's not only a great company to own. It's extremely well run and profitable as well, having offered investors impressive returns over the years.

So, what's my issue?

For me it's simply that the company is too closely connected to Warren Buffet himself. He's a man who is one unto himself. There have been few like him before, and once he's gone, I am not sure there will be another quite like him.

When it comes to the company he runs, he's the main attraction. His words matter. Investors trust in his judgement. His annual meetings draw in huge crowds of people who want to enjoy the experience and hear what The Oracle of Omaha has to say. 

His annual meetings aren't just about what's happening in the markets, or with the business, or even what his outlook of the economy happens to be. It's an event, done convention style with lots of fun and entertainment thrown in the mix—it's a shareholder's meeting unlike any other.

It's an experience and moment not unlike going to see The Rolling Stones or Metallica. You're going to want to tell your friends. You're going to want to share what happened there.

While Warren Buffet seems healthy and going strong, he's 93. Charlie Munger is 99 and will turn 100 in January. And again, Warren Buffet essentially is Berkshire Hathaway. The man and the company are nearly inseparable when you think of them.

The reality is that no one lives forever. Not even The Oracle. He will pass, as will Munger, and while there is a well-planned successor in place in Gregory Abel, one wonders, despite his being a protégé of sorts, who has been vigorously vetted and groomed for the position to take over the reins when Buffet's gone, whether he has the same intellect and character that Buffet has gifted us with over many decades.

There is no doubt that Berkshire Hathaway will exist long after Warren Buffet and Charlie Munger are no longer with us. But can one expect some changes under Abel? I think that's obvious. And what about Abel's successor? Who takes over if Abel dies or simply decides he doesn't want to do it? What does his succession plan look like? And how careful will his selection be compared to Buffet's?

Think The Tonight Show with Johnny Carson. There was something about that show that just made it Johnny's, even though to be fair, he wasn't the original host of the show. But also, to be fair, Jack Paar was no Johnny Carson. Carson made that show. And no one after him, even Jay Leno, could quite capture the same love and admiration nor audience that Carson could. 

Berkshire Hathaway wasn't always Warren Buffet either. Warren Buffet made the company.

When Johnny Carson bid his farewell and drew himself behind the curtains for the final time, the show may have gone on. But it was not at all the same show, and never has been since.

I think of Berkshire Hathaway this way post Buffet. The company will remain and will probably still be a great company. It may bear the same name. But it will never be the Berkshire Hathaway that makes it so appealing as an investment today.

In other words, will it be the Berkshire Hathaway we know today with Abel in charge where investors will be as excited about it? Will Abel's words have the same interest and appeal as when Buffet speaks?

I don't think so.

And for that reason, while I love and admire Warren Buffet and love and admire the company he built, it's a tough sell for me to buy shares because what you are buying is essentially Warren Buffet when you buy the stock.

And he's on short time.

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©2023 by Jim Bauer. All rights reserved.

Cartoon generated by AI. Caption by Jim Bauer. ©2023 by Jim Bauer. All rights reserved.