Berkshire After Buffett: Former Hedge Fund Manager On Why It Can Channel Apple's Post-Jobs Growth

Zinger Key Points
  • Berkshire may not go downhill even after Buffett and Munger give up their leadership role at the company, Whitney Tilson says.
  • He says that the duo has created an incredibly powerful flywheel that will help the company to continue to outperform.

Earlier this monthWarren Buffett and Charlie Munger hosted Berkshire Hathaway‘s BRK BRK annual shareholder meeting in Omaha, Nebraska. The nonagenarian investment legends showcased their sharp wit and investment prowess, leaving ardent fans and Berkshire shareholders pondering the inevitable question: “What’s next after Buffett?”

Tilson’s Take: In his daily newsletter, former hedge fund manager Whitney Tilson addressed some of these concerns. 

The topic arose during a conversation with James Early, Chief Investment Officer of BBAE, who pondered the longevity of Buffett and Munger. 

Tilson shrugged off the remark as too pessimistic. "If you simply plug in his age (92 years, 8 months) and gender into the Social Security Administration's website, it says the average American make of his age will live another 3.5 years," he said.

The ex-hedge fund manager also said Buffett isn't an average American. "He's in excellent health, receives great medical care, loves his work, is surrounded by his loving friends and family, etc," he said.

See Also: A Guide To Value Investing

Buffett vs Jobs: Drawing a parallel to Apple’s transition after Steve Jobs, Early raised the question of how Berkshire would fare without Buffett. He raised the point about Jobs leaving Tim Cook with a massive organic tailwind while arguing that Berkshire is a stable, slow-grower whose future depends on superior capital allocation.

Tilson, however, said Berkshire was not a tech business and highlighted the powerful flywheel effect that Buffett and Munger have created, expressing confidence in Berkshire’s ability to outperform even after their departure. 

Tilson also expressed faith in Ajit Jain, who heads Berkshire’s insurance business, emphasizing the likelihood of his living and working well into his 90s. 

Currently 71, Jain is poised to carry on the legacy. Tilson underscored the dedication of Buffett and Munger to Berkshire’s continued success, even beyond their own tenures.

Last month, Buffett’s chosen successor, Greg Abel, acknowledged that things would not be the same at Berkshire when the legendary investor leaves.

Price Action: Berkshire’s Class A shares closed the session on Wednesday with a 0.40% increase, reaching $500,600, according to Benzinga Pro data. 

Read Next: Tesla’s Path To Warren Buffett’s Portfolio: How Much Should Stock Drop To Get Berkshire’s Attention?

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