Warren Buffett’s priorities
- January 21st, 2011
Warren Buffett is leaving the board of the Washington Post Company (WPO). He continues to own a nearly 19% stake in the company and he states that he has no intentions of selling those shares. The ostensible reason for leaving the board has to do with the time commitment. This underlies the notion that Buffett is focusing more on transforming Berkshire Hathaway (BRKB) into a company that can thrive in his absence. This point was driven home in his interview with Bethany McLean in the February 2011 edition of Vanity Fair (still summary-only). In that article McLean writes:
The real point about Burlington is that it is a capstone in the transformation of Berkshire. Indeed, today’s Berkshire Hathaway bears about as little resemblance to a hedge fund as General Electric does. [p. 114]
That underlies the fact that Buffett is focused on the really long term, not the next year or so. Buffett states:
There is no end point for Berkshire Hathaway. The important thing is not this year or next year, but where Berkshire is 20 years after I die. Not taking care of Berkshire would be like not have a will-cubed. [p. 110]
It therefore makes sense to view Berkshire’s moves going forward through this lens. If Buffett’s priorities are to create an ‘idiot-proof’ company expect more bench building, acquisitions and a lot less action on the stock front.
In the meantime a few more Buffett-related links:
Add Greg Abel to the list of contenders to “replace” Buffett. (Fortune)
Former Buffett employee Louis Simpson is hanging out a money management shingle. (Bloomberg)
Update: A commenter wonders if Buffett is trying to disassociate himself from the Washington Post due to its for-profit education arm. Joe Weisenthal at Money Game makes the same point. This reputational risk could be playing a role in Buffett’s decision. However if Buffett thought it was a mortal threat to the company, despite his very low tax basis, he would likely be looking for a way to reduce his economic interest in WPO. At this point there is no indication that is happening.
Abnormal Returns is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. If you click on my Amazon.com links and buy anything, even something other than the product advertised, I earn a small commission, yet you don't pay any extra. Thank you for your support.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Abnormal Returns has over its seven-year life become a fixture in the financial blogosphere. Over thousands of posts we have striven to bring the best of the financial blogosphere to readers. In that time the idea of a “forecast-free investment blog” remains as useful as it did six years ago. More »
- Friday links: stop doing things
- Simplify your investing to avoid ‘opportunities for failure’
- Thursday links: having it both ways
- Wednesday links: two gigantic bubbles
- Tuesday links: anomalies have no soul
- Monday links: hindsight hinderances
- What books Abnormal Returns readers purchased in November 2013
- Sunday links: high yield dichotomy
- Top clicks this week on Abnormal Returns
- Saturday links: grateful children