1994: What will happen to Berkshire if something happens to Buffett?

AUDIENCE MEMBER: Mr. Buffett, my name is Arthur Coleus (PH) from Canton, Massachusetts.

And I’d like to know how you’d respond to the question that my associates ask me when they say that Berkshire Hathaway has been a good investment up to now, but what happens to your investment if, God forbid, something happens to Mr. Warren Buffett?

WARREN BUFFETT: Well, I’m glad you didn’t say Charlie Munger. (Laughter)

No, there — Berkshire will do just fine. We’ve got a wonderful group of businesses.

I’ve told you the two things I do in life. And, in terms of the managers we have, you have to come in and really want to mess it up, I would think. And we don’t have anybody like that, in terms of succession plans at Berkshire.

And then there’s the question of allocation of capital. And, you could do worse than just adding it to some of the positions that we already had.

The ownership is — if I die tonight, the ownership structure does not change. So, you’ve the same large block of stock that has every interest in having good successor management as I would.

I mean, there’s no — there would be no greater interest. And it is not a complicated business. I mean, you ought to worry more about, if you own Microsoft, about Bill Gates, I think, or something of the sort.

But, this place is, you know, we’ve got a group down here that are running these. You didn’t see me out at Borsheims selling any jewelry the other day. I mean, that’s somebody else’s job. So, I — it is not — it’s not very complicated.

Incidentally, I think I’m in pretty good health. I mean this stuff (Coca-Cola) will do wonders for you if you’ll just try it. (Laughter)

Charlie, do you want to add anything as the —?

CHARLIE MUNGER: Yeah. I think the prospects of Berkshire would be diminished — obviously diminished — if Warren were to drop off tomorrow morning. But it would still be one hell of a company and I think it would still do quite well.

I used to do legal work, when I was young, for Charlie Skouras. I heard him once say, my business, which was movie theaters like this one, was off 25 percent last year, and last year was off 25 percent from the year before, and that was off 25 percent from the year before, and then he pounded the table and he’d say, “But it’s still one hell of a business.”

WARREN BUFFETT: It’s not a formula we want to test, incidentally.

CHARLIE MUNGER: No, no. (Laughter)

WARREN BUFFETT: It is one hell of a business that we’ve got here. I mean — and if you saw what happened at Berkshire headquarters, you would not worry as much. There’s very little going on there that contributes to things. (Laughter)

We’re, right now, at our peak of activity. This is it.