A Post-Buffett Berkshire Is Omaha Focus After Munger’s Passing

(Bloomberg) -- Berkshire Hathaway Inc.’s annual meeting on Saturday gave shareholders a glimpse of how the conglomerate will operate without Charlie Munger, who died last year at 99. Then came the questions: How will it operate without Warren Buffett?

With the billionaire investor turning 94 this year and Munger’s death in November, succession at Berkshire has become an increasingly pressing matter for shareholders, even after Buffett named his successor in Greg Abel in 2021. But for anyone speculating that Munger’s passing might have hastened Buffett’s retirement, he had this to say as he concluded the Saturday event: “Not only do I hope you come next year, but I hope I come next year.” 

Buffett and Munger transformed Berkshire from a failing textile mill into a behemoth spanning industries including insurance, energy and railroads churning out billions in earnings — including $11.2 billion in the first quarter — and amassing a vast cash pile that hit a record $189 billion at the end of March. In an economy overshadowed by elevated inflation and uncertainty over rate cuts, shareholders who’ve gotten used to Berkshire’s investing success were eager to know how this could continue without Buffett, who has been at the helm for decades. 

What would the culture at Berkshire be like under Abel, one asked, as the vice chairman for the company’s non-insurance operations joined Buffett on stage to field questions. Would Abel take over the portfolio of stocks Buffett has been managing, came another question.

“That decision will be made when I’m not around,” Buffett answered — joking that he may try and haunt those who do it differently to him. “I would leave the capital allocation to Greg. He understands businesses extremely well, and if you understand businesses, you understand common stocks.”

Abel’s more than two-decade track record at the conglomerate includes high-profile dealmaking and overseeing its sprawling non-insurance businesses, from the BNSF railroad to Dairy Queen. But Buffett’s aphorisms and stature as the Oracle of Omaha have earned him a reputation as the avuncular face of capitalism, and secured him a following that Abel may find hard to replicate.

Chris Bloomstran, who is president at Semper Augustus Investments Group, didn’t seem concerned. Abel is a phenomenal leader who will be “a great capital allocator,” he said ahead of the meeting at the Gabelli Funds Annual Omaha Value Investor conference on Friday.

“There’s no other Warren Buffett,” he said. “Fortunately they have a wonderful board.”

It was inevitable that Munger’s absence would loom large over the meeting, where he held court on stage alongside Buffett for decades, entertaining crowds with his witticisms and — at times scathing — quips. On the sidelines of Saturday’s event, investors were clear there will never be another Buffett or Munger. However competent their successors, the pair brought an authenticity and charisma that would be hard to replace.

Munger Tributes

On Saturday, Buffett extolled Munger’s love of learning, his ability to navigate a path out of failures, his investing acumen and wisdom. He’s never seen someone peaking at 99, Buffett said.  

“He went everywhere with his mind, and therefore he was not only interested in the world at 99, but the world was interested in him,” Buffett said. At one point, Buffett mistakenly referred to Berkshire vice chairman Greg Abel as “Charlie” as he directed a question to him.

As succession repeatedly came up, Buffett kept invoking leadership changes at Apple, one of his favorite companies — even though he sold some of its shares in the first quarter. He noted the strong leadership of Chief Executive Officer Tim Cook, who took over for Steve Jobs.

Read More: Charles Munger, Who Built Berkshire With Buffett, Dies at 99

Munger died in November just months shy of his 100th birthday, prompting an outpouring of tributes praising his depth of knowledge, witticisms and investing acumen. A lawyer by training, Munger helped Buffett, who was seven years his junior, craft a philosophy of investing in companies for the long term. 

“I think he gave us all permission to tell the honest truth when we can,” John Rogers, who is co-chief executive officer at Ariel Investments, said at the Gabelli event. “And that’s the thing I think I take away from Charlie the most.”

Read More: A Master of One-Liners: Munger on Politics, Life and Crypto

Under their management, Berkshire averaged an annual gain of 20% from 1965 through 2022 — roughly twice the pace of the S&P 500 Index. Decades of compounded returns made the pair billionaires and folk heroes to adoring investors.

“I think Charlie would be the first to say that if Berkshire was harmed by his departure, they weren’t doing their jobs,” Adam Mead, who wrote ,” said.

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