There was a notable absence of a familiar face in this year’s Berkshire Hathaway (BRK) annual general meeting (AGM); he was Charlie Munger, who passed away in late November last year. Seeing Warren Buffett sitting without Munger on stage looked a little weird, as the two investors, whose names were almost synonymous with the company they were (and still are) running, were seen as inseparable.
Realistically and morbidly speaking, everyone will get to meet their maker sooner or later; and this means Buffett will not be on the stage of the AGM forever. No doubt we would want him to continue (and earn us shareholders huge returns), but we knew this is impossible. Fortunately, succession planning was already in the works, with Greg Abel named as the successor to BRK.
Expectations
Successors are usually judged with the standards and achievements of their predecessors, and naturally they will feel the heat especially if the ones before them were greats. People would expect them to the same, if not, better than their upperstudies. We may be judgmental by comparing between the two, often for the worse as we prefer things that we were accustomed to.
The tendency to cling on to nostalgia is there, but it is important to know that change is the only constant around. We need to be realistic with our expectations; no matter how much the disciples learnt from their masters, there will always be a hint of difference or deviation between them. The important thing is whether that difference/discrepancy is for the better or for worse, and this must be determined not just within one or two investments over a few weeks or months, but rather over several investments over at least a few years.
Furthermore, expectations are varied from person to person, so on a same issue one could find it better while the other may find it worse. In this case, it is up to the individual investor to decide whether to stick around or to exit his/her investments.
Going back to BRK, would you think it is still a worthwhile company to invest in post-Buffett period? I would think so, at least for probably another two to three years or so. We need to give them a chance to prove themselves.
Disclosure
The Bedokian is vested in BRK.B.
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