2010: How did the four potential candidates for Berkshire’s CIO position perform over 2008 and 2009?
BECKY QUICK: This is a question that has to do with the Berkshire succession plans. It comes from Craig Merrigan in Sprucegrove who asks, “How did the four potential candidates for Berkshire’s CIO position perform over the course of 2008 and 2009?
“Did any of the four employ leverage? And have any of the four now been excluded from consideration?”
WARREN BUFFETT: Yes, the answer to that is that, in 2008, I reported to you last year that they didn’t, I think we got a question like that last year, they did not distinguish themselves. 2009, they did pretty darn well.
It’s not — I would say that the four — it’s not the same four. I would say that none of them, Charlie, I believe you may use leverage at all. Do you think so?
CHARLIE MUNGER: Well, the one with which I’m most familiar made a little over 200 percent using leverage of zero.
WARREN BUFFETT: Well, that narrows it down. (Laughter)
The potential investment people, that list will be subject to more movement around than probably the CEO succession.
And it’s really far less urgent. If I die tonight, there will be a new CEO in place in Berkshire within 24 hours, and all the directors know who it would be, and they’re all comfortable with it.
And there should be somebody in place within 24 hours.
The investments, they don’t need anything done next week. I can go on vacation on investments. And we could go — we wouldn’t do it, or the directors wouldn’t do it, I won’t be there — but they could wait a month, they could wait two months.
I mean, the Coca-Cola isn’t going to go away, Procter & Gamble’s not going to go away, American Express. There’s no great need to be doing things day by day. We don’t do things day by day.
So they can be fairly leisurely in working out, probably in conjunction with a new CEO, who they would like to bring in, how they would like to compensate them, what the number might be.
That is not fixed in stone at all. The one thing I can tell you is that there are some very able people who would like very much, I think, to be managing money for Berkshire, and who would do a good job, and who are familiar to at least some of the directors. And that problem would get solved.
The CEO problem — which is not a problem — but the CEO question, you want an answer for right now and you want to be prepared to implement it, you know, the next day, although I did just have a physical. (Laughs) Came out fine. (Laughter)
Charlie? (Applause)
My doctor isn’t here today so I will tell you, it drives him nuts because I eat like I do and he can’t find anything wrong — (laughs) — and he wants to, believe me. (Laughter)
And with that —
CHARLIE MUNGER: Well I’m — (Laughter)
I am not the most optimistic of the two people up here. And — (laughter) — yet, I’m quite optimistic that the culture of Berkshire will last a long, long time and will outlast, greatly, the life of the founder. I think it’s going to work.
WARREN BUFFETT: I really think — I mean, we shouldn’t be getting into superlatives — but I think we have as strong a culture, and as distinctive a culture, in terms of managers, ownership, the whole works, of any really large company in the country.
And it’s taken a long time to develop, but it becomes self-reinforcing after a point. And we love it, and I think they’ll love it after I’m gone. (Applause)
Don’t clap there. (Laughter)