Warren Buffett on Saturday gave the most extensive comments to date about the future of Berkshire Hathaway Inc after he is gone, saying he still expects the conglomerate to be a partner of choice for distressed companies.
Buffett, 82, also defended his plan to install his son, Howard, who has little investing experience, as non-executive chairman, saying the younger man’s role would be to ensure that Berkshire had the right chief executive officer in place.
During the financial crisis and its immediate aftermath, Berkshire helped prop up a number of companies, among them blue-chips such as General Electric Co and Goldman Sachs. Buffett’s investments were viewed by many shareholders as a seal of approval from one of the world’s most respected businessmen.
Short-seller Doug Kass, invited by Buffett to Berkshire’s annual meeting on Saturday to offer contrarian points of view, asked whether a successor would have the same heft. Buffett said it would not matter.
“Berkshire is the 800 number when there is really some panic in the markets and people really need significant capital,” Buffett said.
“If you come to a day when the Dow [Jones] has fallen 1,000 points a day for a few days and the tide has gone out and you find some naked swimmers, those naked swimmers ... will call Berkshire,” he added.
Whoever ultimately takes over Berkshire will run a conglomerate that employs more than 280,000 people in dozens of businesses worldwide, covering everything from ice cream to insurance and retail to railroads.
Kass later asked what qualified Howard Buffett, a 58-year-old farmer and philanthropist, to step in as Berkshire’s non-executive chairman when his father is gone. The elder Buffett insisted his son was ideal for the task at hand.
“He has no illusions at all of running the business. He won’t get paid for running the business,” Warren Buffett said. “He’ll only have to think about whether the board ... needs to change the CEO.”
As in the past, Buffett talked about his successor as chief executive officer without actually identifying him. Speculation usually focuses on a small group of top Berkshire executives, among them insurance boss Ajit Jain and railroad leader Matt Rose.
Berkshire’s breadth means that its performance is seen as a barometer for the broader economy.
On Saturday, Buffett said he still stands by the actions taken by the US Federal Reserve to stimulate the economy, even as he cautioned that the program could be “very inflationary.”
“This is like watching a good movie, and I do not know the end,” he said. “We have benefited significantly, and the country has benefited significantly, by what the Fed has done.”
The annual meeting opened, as it does every year, with a video montage. This year’s included a duet between Buffett and singer Jon Bon Jovi and a take-off on the TV series Breaking Bad.
Some of the best comedy, though, usually comes in the verbal sparring between Buffett and vice chairman Charlie Munger over the course of the day. The two are close — they shared an oversize box of peanut brittle during the meeting — but Munger’s acerbic tongue pops out from time to time.
“I come to see Charlie Munger needle Warren Buffett — only he can,” said Sherman Silber, a doctor and shareholder.