Warren Buffett Talks About His Mysterious SuccessorInsight on the choice of his ultimate replacement, with Warren Buffett, Berkshire Hathaway chairman/CEO, who answers questions from viewers, including whether he thinks higher gas prices will derail an economic recovery.


for 200-plus years. it’s working well now in all well, they’re a minus but i don’t see them stopping things. i would rather have them a lot lower. of course we had them a lot lower when the panic hit. oil had been $147 a barrel prior to obama coming in and then when the panic hit, it hit everything and oil totally tanked. 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. does the price of oil make sense given that economic recovery or something people are too worried about what’s happening in the middle east or where you have speculators playing in the commodity market? i have no position in oil so i don’t really have a view. the one thing that’s extraordinary in oil which we’ve never seen and causes people to go broke, is you have $100 plus oil, $108 or whatever it was with $2.50 for natural gas. nothing like that has ever existed. the btu equivalent, people say that can’t happen. so people who 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. this is extraordinary. you would have said it couldn’t happen but that’s like saying long-term capital management that you couldn’t have 30-year treasuries for 30 basis-point spread. you want to be very careful. in your annual letter you said you had guessed wrong with where natural gas prices were heading and that was one of the issues. yeah, like a billion dollars worth plus. let’s get to some questions from viewers. we promised to bring some of those up and we were talking about berkshire. you had a lot of questions that came in both on twitter and our own e-mail of people asking more questions about that. one is from max rudolph who writes in while you are 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 of a board member becoming ceo. certainly we’ve got incredible business talent on the board, and they’re intimately familiar with berkshire. i think it’s unlikely that we would have somebody better in the position of ceo. if we’re on a plane trip and the plane went down, the board would not be a bad place to look. but that’s not going to happen. if the person that the board has chosen to be your successor, does he know that he’s been chos chosen? no. okay. 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 this in omaha? i would certainly hope so but i won’t be around to enforce it. maybe i will. i’ve left them all a ouiji board so they can stay in contact with me. i’ve threatened them in various ways. there’s every intention of the headquarters being in omaha 50 years, 100 years from now. it wouldn’t make sense for the ceo not to be located where the headquarters are. i think that’s a 99.9% answer yes. david lund from ogden, utah, writes in and points out when lou simpson retired his portfolio was liquidated. what will happen to your portfolio when you retire? well, i don’t know. that will be for somebody else to decide. what will happen is that todd and ted, who are already onboard now, will be managing the investments and they will be managing counting the cash $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 $1.75 billion. that will go up in 2012. i don’t know what they’re buying. they don’t have to check that with me. they could be each buying the same stock. i think in one case they’ve done that. it’s their baby. they are getting paid based on their results. it wouldn’t mean anything if i receives 80% of the performance compensation from his own investment results and 20% from his partners. he assumes if this is so they will help each other. can you elaborate? i’ve seen investment organizations where people are competing with each other. these fellows wouldn’t anyway. i do believe in having compensation systems to reinforce the values that we value and we certainly value cooperation among the people doing that sort of thing. performance is defined over a period of time. todd came onboard a year ago and did very well the first year. he didn’t come onboard until this year, but from this point forward they will participate with each other. andrew, you have a question as well? it’s on this topic. i’m curious if you imagine bringing on investment managers still. i recall you saying something to the effect of two to three to possibly more than that. do you feel there’s no more? i feel no need. i feel terrific with these two and they could easily handle the whole plate. it may well be that we find a thi third. i’m not thinking about that actively. if i thought it would add something to the picture, i wouldn’t hesitate to do it and todd and ted ted would not be surprised if i did it. i hope you are talking to me five years from now and it will be ten. they are terrific human beings. these are two fellows who were running, in effect, hedge funds. they were making more money than they could make with berkshire and getting an entirely different tax treatment. the money todd made last year, which was substantial, he would have made that same money if he’d have been running his hedge funneled and gone to work 0 at the same time in the morning, had a couple of assistants, the same people, reading the same reports, but he would have been taxed at less than half the rate he was taxed at because we pay it as ordinary income. he would have gotten it as long-term gain. doesn’t seem fair. seems crazy. gets us to the topic of tax policy. i know that’s a big can of

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