Buffett wrote in his annual letter last year: “Ajit has created tens of billions of value for Berkshire shareholders. If there were ever to be another Ajit as well as you could swap me for him, don’t hesitate. Make the trade!”
although lately, Abel has been discussed as the most likely successor given his younger age as well as success in running the utility business.
“The most likely successor in our view, who Warren Buffett regularly praises, is usually Greg Abel,” J.P. Morgan analyst Sarah DeWitt wrote in a note about Berkshire in September. “Ajit Jain, who runs Berkshire Hathaway Reinsurance, is usually also believed by many to be a potential successor, although our sense is usually his age may preclude him.”
“We think Greg Abel would likely be a strong allocator of capital as well as the earning power of the underlying businesses would likely remain strong after Buffett,” DeWitt added.
Buffett has guided the sprawling conglomerate to a 20.8 percent compounded annual gain by 1965 through 2016, double the return of the S&P 500 over in which period.
To achieve in which market-beating return, Buffett has assembled a collection of cash-generating industrial as well as insurance businesses through acquisitions as well as in turn, invested in which cash to make astute large bets on public stocks.
Whoever takes over for Buffett will likely not retain in which full stock-picking role because Buffett brought in two hedge fund managers, Ted Weschler as well as Todd Combs, from the last decade to do more of the investing.
Berkshire’s B share class traded lower after the announcement as investors began to think again about the future of the company without the Oracle of Omaha in charge.
“The stock is usually likely to drop, perhaps substantially over an extended period when Warren Buffett steps down, although This particular could ultimately present a buying opportunity because the underlying fundamentals should continue to improve as well as the board could repurchase significant amounts of stock if the shares fell below 1.2x book value,” DeWitt’s note said.