1998: How would Berkshire fare without Buffett?

AUDIENCE MEMBER: Yes, hello to Mr. Munger and Mr. Buffett. My name is Jerry Gonzalez (PH) from Plantation. My question is, what are your recommendations for Berkshire Hathaway if Charlie Munger were in charge, or your third man in charge — your third man, which I think you said, is the CEO of GEICO, what are your recommendations?

WARREN BUFFETT: I missed that.

JERRY GONZALES: If Charlie Munger were to stay in charge fully, 100 percent, or your third man, the CEO of GEICO.

CHARLIE MUNGER: Well, in due course, this corporation will have a change in management. I’m afraid we have no way of fixing that. (Laughter) But we do not — apart from making sure we’ve got good options and having some system in place, we are not obsessing about future management yet.

WARREN BUFFETT: No. The directors —

CHARLIE MUNGER: Warren plans to live almost indefinitely.

WARREN BUFFETT: Absolutely. (Laughter) Although I must say, at my last birthday, somebody asked me how old I was. And I said, “Well, why don’t you just count the candles on the cake?” And he said he was driven back by the heat, so — (Laughter) But we’re not going to leave willingly.

And we do — the directors know who — they have a letter that says who we think should be the ones to succeed us at both the operating aspect and the investment allocation aspect. And those letters can change over time as we keep hanging around.

But I don’t worry about the fact that 99 percent-plus of my estate will be in Berkshire Hathaway stock or that a foundation will eventually receive that stock. So it doesn’t bother me in the least. I can’t think of a place I’d rather have it.

And that includes my appraisal of the managers that we have who can step in and do what Charlie and I do. And who knows, one of them may even understand technology. (Laughter)

CHARLIE MUNGER: I think this place would have very respectable prospects if the top 25 managers all dropped dead at once.

WARREN BUFFETT: Well, that’s not an experiment we intend to pursue. (Laughter)

CHARLIE MUNGER: No, but I see no reason to think it wouldn’t continue to do quite well.

WARREN BUFFETT: Right.

CHARLIE MUNGER: It’s been lovingly put together to have a certain margin of safety.

WARREN BUFFETT: Right. We actually — if we have a choice, it’s number three through 23, though — 25 — that we’re interested in. (Laughter)