Buffett seeks a 'New Buffett'
In annual report released Thursday, the world's greatest investor
says he's looking for an understudy - job-hoppers and
money-grubbers need not apply.
By Carol Loomis, Fortune editor at large
March 1 2007
NEW YORK (Fortune) -- Running what is in effect an ad for talent,
Berkshire Hathaway chairman Warren Buffett, 76, says in the
company's just-released annual report that he plans to hire a
younger person - or perhaps more than one - to understudy him in
managing Berkshire's investments.
Buffett hopes to find, he says, a candidate to "succeed me as
Berkshire's chief investment officer when the need for someone to
do that arises."
In the same section of the annual report, Buffett writes, "I feel
terrific and, according to all measurable indicators, am in
excellent health." Jesting about his infamous non-diet, he adds,
"It's amazing what Cherry Coke and hamburgers will do for a
fellow."
Buffett says the plan to hire an investment manager was discussed
fully at Berkshire's October board meeting and recognizes that the
company's succession plans on the investment side of its business
are not well-developed.
In contrast, he says, repeating a statement he has made previously,
Berkshire has three outstanding candidates - all much younger than
he - to replace him as CEO. The board, he writes, "knows exactly
who should take over if I should die tonight."
Picking the right person to hire on the investment side will not be
easy, Buffett says. "We need someone genetically programmed," he
specifies, "to avoid serious risks, including those never before
encountered." Other talents he will be looking for, he says, are
"independent thinking, emotional stability, and a keen
understanding of both human and institutional behavior."
Buffett adds that Berkshire will face a special problem in keeping
the person it hires. "Being able to list Berkshire on a resume," he
says, "would materially enhance the marketability of an investment
manager. We will need, therefore, to be sure we can retain our
choice, even though he or she could leave and make much more money
elsewhere."
Buffett mentions Lou Simpson, 70, who has managed the investments
of Berkshire subsidiary GEICO for more than 25 years and whom
Buffett sees as his investment backstop right now, as the type of
person Berkshire would hope to hire. Buffett says that though
Simpson "has earned large amounts," he could have left long ago for
a much more lucrative spot if "money alone had been the object."
Says Buffett: "We need to find a younger person or two made of the
same stuff."
Buffett says that he will be helped in his search for someone to
hire by Simpson and by Berkshire's vice-chairman, Charles Munger.
At the end of 2006, Berkshire had $61 billion in equity
investments; $28 billion in fixed-income securities; and cash
holdings of $43 billion.
-money.cnn.com / Fortune
