Warren Buffett, one of the most successful investors of all time, is still going strong at 93 years old. However, he is not unaware of his eventual mortality, saying “I feel good but fully realize I am playing in extra innings.”
Like any good CEO, he’s been thinking about his succession planning. Greg Abel, who runs Berkshire Hathaway‘s (NYSE:BRK) non-insurance business operations, is set to succeed Buffett as CEO when Buffett passes.
While some investors in Berkshire fear that the stock will sell off on that day, Buffett has a contrarian view.
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Buffett said that when he dies, he thinks “the stock would go up tomorrow.”
Chris Davis, a Berkshire board member and investment manager, explains that a price increase would be because of an attempted value-enhancing conglomerate breakup. He believes that “every activist and investment banker will argue that in a world without Warren and Charlie, Berkshire’s unorthodox structure shouldn’t persist.”
Buffett has consistently been vehemently opposed to breaking up Berkshire’s conglomerate structure.
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If history is a guide, Berkshire’s stock-picking team may have trouble replicating Buffett’s incredible track record. Todd Combs and Ted Weschler, who currently manage about 10% of Berkshire’s equity portfolio and are expected to eventually manage the entire portfolio, probably would’ve been better off investing in a market tracking index since joining the company.
While Buffett has not mentioned their performance since 2019, that year he did say that they lagged the market slightly since joining the company a decade prior.
Even Buffett hasn’t had the same success as his early years, with Berkshire almost exactly even to the S&P 500 over the past decade.
Regardless of Berkshire’s stock performance, the eventual death of one of the world’s brightest business and investing minds will be sad news for Berkshire shareholders and investors everywhere. As with his succession plan, his timeless lessons are designed to last.
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This article Warren Buffett Isn’t Worried About Berkshire After He Dies, Says ‘If I Die Tonight, I Think the Stock Would Go Up Tomorrow’ originally appeared on Benzinga.com
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