Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) held its annual meeting in Omaha over the weekend. Vice Chairman Charlie Munger made a surprise revelation that Greg Abel would be the next CEO of the firm after Warren Buffett.
Greg Abel named as next CEO of Berkshire
Munger responded to a question about whether Berkshire Hathaway would eventually become too complex to manage. Although he didn't come right out and say that Abel would be the next CEO, he did say something that led most, including CNBC, to assume that he would be.
Munger said Abel would " keep the culture" at Berkshire Hathaway, adding that its decentralized nature would go beyond Buffett's and Abel's tenure. Berkshire watchers have long wondered who would take over the reins of the conglomerate after Buffett retires. The remark signaled to many that the CEO post would go to Vice Chairman Greg Abel, who heads up all the company's noninsurance operations.
CNBC confirmed that the view was an accurate one. Buffett said Berkshire's directors agreed that if something were to happen to him "tonight, it would be Greg who'd take over tomorrow morning." He praised Abel and Vice Chairman Ajit Jain, who heads up the conglomerate's insurance operations. Buffett also said that if anything happened to Abel, then Jain would be the one to take over.
Abel and Jain long seen as in the running for the CEO job
According to CNBC, both Abel and Jain had long been seen as being in the running for the top post at Berkshire Hathaway since being promoted to vice chairman in 2018. Buffett said age is a key factor for the board in determining who will be the next CEO. Abel is 59, while Jain is 69.
For more than 15 years, Berkshire investors and watchers have been wondering who would take over the conglomerate after Buffett is gone. It was long expected that David Sokol, who heads up Berkshire Hathaway Energy and NetJets, would succeed Buffett. However, he left Berkshire in 2011 after it was revealed that he had taken a $10 million stake in Lubrizol not long before recommending that the firm buy the chemical company.
Other highlights from Berkshire's annual meeting
During the annual meeting, Buffett reiterated comments he had made before about investors not gambling on stocks. He advised investors not to think buying stocks is a quick way to make a profit and said it could be difficult to pick long-term winners.
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For example, Buffett said there were over 2,000 car companies in 1903, and almost all of them failed even though cars have changed the country. He explained that there is much more to picking stocks than just choosing a winning industry.
Buffett also said that most investors would do better owning an S&P 500 index fund instead of buying individual stocks. He added that most of the novice investors who drove up the stock price of GameStop and other heavily shorted stocks earlier this year are basically gambling. Buffett also believes that Robinhood and other stock trading platforms that let investors buy and sell stocks free are encouraging gambling.