2011: What about Ajit impresses Buffett the most?

ANDREW ROSS SORKIN: This question comes from Matthew Palmer of North Andover, Massachusetts.

And he writes, “Mr. Buffett, you have praised [Berkshire Hathaway reinsurance chief] Ajit [Jain] as a possible successor. Since he may be in line as our next CEO, can you give us a concrete example of a policy that he’s written that’s impressed you, and can you talk a little about the way he thinks since we rarely get an opportunity to hear from him?”

WARREN BUFFETT: Yeah, Ajit is not exactly a publicity hound.

Ajit — (laughs) — he —

I can’t think of any decision he’s ever made that I think I could have made better.

And I’ve — I’m not privy to all of his transactions anymore. There just — there are lots of them that are not of huge size or of great interest, but he tells me about all the interesting things that come along and all the very big things that come along. And I would say this: you’d be better off voting with him than with me after listening to any proposition he brings up.

He is as rational a thinker as Charlie is, as anybody I’ve met. He loves what he does.

He’s creative. He’s very creative. We have moved into one area after another in reinsurance when people came in copying us in one area of business that we would be operating in. Ajit comes up with something else.

Lately we’ve been much more active in life reinsurance, but who knows tomorrow brings. I mean, if there happens to be a huge cat in the third quarter of this year or something of the sort, that might open up all kinds of opportunities in writing covers when — if capacity got strained.

But who knows what will happen. All I know is that Ajit’s mind works like a machine, you know, day after day. And he does love what he does, which is an important part of doing well at any activity.

And I really — I don’t know what his best deal was. I know what my best deal was, which was hiring him.

Charlie?

CHARLIE MUNGER: Yeah. Sir William Osler, who created a model medical school for the world, used to say that the secret of success in a field is getting very interested in it.

Well, Ajit is real interested in what he does. Many of you don’t know this, but every Thanksgiving, Ajit flies to London because they don’t have a Thanksgiving holiday. (Laughter)

WARREN BUFFETT: We give him Christmas off, though. (Laughter)

Ajit, we just — he — I say how invaluable he is, and I’m not exaggerating when we talk about him. He is — to an extraordinary degree, he thinks of Berkshire first.

Ajit, at various periods when insurance companies became popular for one reason or another, there was, you know, there was the big thing about Bermuda companies some few years ago, Ajit could have monetized himself to an incredible degree. Still could do it.

I mean, people would hand him a significant percentage of any company being formed with lots of money, so that immediately he could create, I would guess, in the hundreds of millions of wealth without lifting a finger, just by somebody putting up, you know, a couple billion dollars and saying you’ve got 20 percent of it or whatever it may be.

I mean, listen, he’s smart. He knows that, and it doesn’t cross his mind to do anything like that.

I mean, he — we have, in comp — he always thanks me for what I do at the end of the year, and I feel I’ve left off a zero, you know, when I get all through. (Laughs)

He’s just a remarkable human being. And we are very, very lucky that, I think, he has a lot of fun in what he does at Berkshire.

He’s got a cadre of about 30 people that work with him. There’s many more that are settling claims and doing that sort of thing on runoff business, but it’s — you won’t find anything like it, in my view, not only in the insurance world, but really in almost any part of the business world. (Applause)

WARREN BUFFETT: Let’s go —

CHARLIE MUNGER: You didn’t answer the question. Maybe you avoided it on purpose.

WARREN BUFFETT: Oh.

CHARLIE MUNGER: He said, what are our worst businesses?

WARREN BUFFETT: What are our worst businesses?

Well, generally speaking — and this is general — I have — well, made certain mistakes in going into smaller businesses that really never had the potential of becoming big.

But I would say overall, probably, I would call retailing — you know, Dexter was our worst business, but I’ve — the Furniture Mart, obviously, is a terrific operation. But we have not made — despite being in numerous retailing — quite a few — retailing business for quite a while, we have not created major earning power there.

Wouldn’t you agree on that, Charlie?

CHARLIE MUNGER: Yeah, but luckily it’s a small part of the operation.

WARREN BUFFETT: Yeah.

CHARLIE MUNGER: But you’re right. That’s been the hardest game for us. And, you know, if we were a little smarter we could have figured that out better. (Laughs)

WARREN BUFFETT: Well, if we were a little smarter we could have done a lot of things. (Laughs)

Of course, See’s is a retailing business, to some degree.

CHARLIE MUNGER: Yes.

WARREN BUFFETT: And we had enormous success there, so maybe we started thinking we were geniuses. We are like the duck on the pond when it was raining, and we thought we were rising in the world because of merit and it was just because it was raining. (Laughter)