Investing Secrets From Warren Buffett

March 23, 2012 by staff 

Investing Secrets From Warren Buffett, Warren Buffett, the chief executive officer of Berkshire Hathaway Inc. since 1970, told shareholders that the board has decided on his eventual replacement.

Directors are “enthusiastic about my successor as CEO, an individual to whom they have had a great deal of exposure and whose managerial and human qualities they admire,” Buffett said on Saturday in his annual letter, without identifying the person. “When a transfer of responsibility is required, it will be seamless.”

Buffett, 81, is under pressure to demonstrate Berkshire is prepared for a transition. The stock trailed the Standard & Poor’s 500 Index last year as Buffett was pushed to apologise for his oversight of David Sokol, a former manager. Sokol, once considered a possible successor, left the company in April and was accused by Berkshire of violating its insider trading policies.

“After the Sokol disaster, he had to settle that issue,” said Jeff Matthews, a Berkshire shareholder and author of “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett.” It was “painfully obvious they needed to have that locked down.” Berkshire declined 4.7% last year, compared with little change in the S&P 500.

Berkshire relies on Buffett, also the chairman and head of investments, to oversee a $77 billion stock portfolio and operating units with more than 270,000 workers. He runs the firm from Omaha, Nebraska, with a staff of 24 people and consults with Vice-Chairman Charles Munger, 88, about investments. The quality of Berkshire’s businesses and managers will give the new CEO “a running start,” Buffett said.

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