BECKY: Let’s get back to some of our questions with Warren Buffett this morning. Warren, Joe just mentioned that national average on oil prices climbing to $3.69. Do you worry that higher oil prices, higher prices at the pump could cut off any sort of economic rebound here in the United States?
BUFFETT: Well, they’re a minus, but I don’t see them stopping things. I mean, you know, I’d rather have them a lot lower. Of course, we had them a lot lower when the — when the panic hit. I mean, oil had been $147 a barrel, you know, prior to Obama coming in.
BUFFETT: And then, when the panic hit, it hit everything. And then oil totally tanked. But, no, I do not think it will derail what’s been going on now for almost three years, two and a half years. We’ve had a steady recovery.
BECKY: Does the price of oil make since given that economic recovery? Or is this something where people are just a little too worried about what’s happening in the Middle East? Or is this a situation where you have speculators playing in the commodities markets again?
BUFFETT: You know, I’ve got no position in oil, so I don’t— I don’t really have a view. The one thing that’s extraordinary in oil, which we’ve never seen and which has probably caused some people to go broke, is you have this— you have 100-plus dollar oil, $108 oil the other day, whatever it was, with $2.50 for natural gas.
BUFFETT: Nothing like that’s ever existed, and I mean, the BTU equivalent, you know, people say that can’t happen. So people that have gone long natural gas and short oil are really feeling the pain. I wouldn’t be surprised if even the unwinding of some of those positions could cause some of what goes on in both markets, but this is— this is extraordinary. I mean, and you would’ve said it couldn’t happen, but that’s like saying before long-term capital management, you know, you couldn’t have had 30-year Treasurys and 29 1/2-year Treasurys with 30 basis point spread. You never— you want to be very careful in markets saying something can’t happen.
BECKY: In your annual letter, you actually said that you had guessed wrong on where natural gas prices were going to be headed and that was one of the issues that you wish you had done.
BUFFETT: Did I ever? Yeah. Yeah. Like a billion dollars worth plus.
BECKY: Let’s get to some questions from viewers. We promised to bring some of those up, and we were just talking about succession at Berkshire. You had a lot of questions that came in both on Twitter and on our own email of people asking more questions about that. One’s from Max Rudolph who writes in that while you’re very careful generally about how you write your annual report, nowhere has it ever said that the CEO that you have in mind is an internal candidate. It seems to leave open the possibility that a board member could become CEO. Can you comment on that?
BUFFETT: Well, that would not be impossible. I mean, it— I don’t think it’s going to be the case, but certainly we’ve got incredible business talent on the board, and they’re intimately familiar with Berkshire. I think it’s very, very unlikely that we wouldn’t have somebody better for the position as a CEO of one of our companies, but if we’re on a— I was going to say a train trip, but I’ll say a plane trip and the plane went down, we had all of our managers on there, the board would not be a bad place to look. But that isn’t going to happen.
BECKY: OK. Another question comes in from Ed Polli in Bridgeport, Ohio, who wants to know if the person that the board has chosen to be your successor, does he know that he’s been chosen?
BECKY: OK. Jeff Webb writes in from Washington and he says, “Will it be necessary for the next Berkshire CEO to reside in Omaha. And will the annual shareholder meeting remain in Omaha after” you leave?
BUFFETT: Well, that’s a good question. I would certainly hope so, but I won’t be around to enforce it. I— well, maybe I will. I’ve left them all a Ouija board so they can stay in contact with me. I’ve threatened them in various ways. But I would say that there’s every intention of the headquarters of Berkshire being in Omaha 50 years, 100 years from now and that— and it wouldn’t make sense for the CEO not to be located where the headquarters are. So I think that’s a 99.9 percent answer, yes.
BECKY: All right. David Lund from Ogden, Utah, writes in and points out that when Lou Simpson retired, his portfolio was liquidated.
BECKY: What will happen to your portfolio when you retire?
BUFFETT: Well, I don’t know. I mean, that will be for somebody else to decide. But what will happen is that Todd Combs and Ted Weschler, who are already on board now, will be managing the investments, and they will be managing counting the cash. They’ll be managing $160 billion, and they’re totally capable of doing that. My guess is that they would like some of the things we own very well, but it will be their call. They each, as I mentioned in the annual report, they’re managing about 1 3/4 billion now, although that number will go up during 2012. I don’t know what they’re buying. They don’t have to check that with me. They can be buying— each buying the same stock. I think in one case, they’ve done that. But it’s their baby. I mean, I— they are getting paid based on their results and it wouldn’t mean anything if I— if I were second-guessing them or they had to get approved by me. So they will buy stocks, and I will find out about it later, even though they work in the same office. And when I’m not there, they will just be managing a whole lot more money, and they’re totally capable of doing that.
BECKY: They each have a few billion dollars right now?
BUFFETT: Right now. But that will go— that will even go up during this year.
BECKY: OK. Control room, I’d like to go to number 108, this is a question that came in from Gary Watkins in Atlanta, Georgia. Since you bring up Todd Combs and Ted Weschler, he writes in and says when you’re talking about them, you say each of them receives 80 percent of his performance compensation from his own investment results and 20 percent from his partner’s. He assumes that this is so they will help each other. Can you elaborate?
BUFFETT: Yeah. Well, that’s— the point