This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Irreplaceable Warren Buffett Isn't Basis for Investing

NEW YORK ( TheStreet) -- Warren Buffett's revelation about his prostate cancer sent shares of Berkshire Hathaway down 1.3% on Wednesday, a deeper dip than the broad market but not exactly panic.

There's the deserved praise about Buffett's outsize role at Berkshire behind the share selling, and the market reaction gives some support to the most obvious case: He is irreplaceable .

Being irreplaceable, though, and all of the fears about succession and post-Buffett Berkshire Hathaway that come with it, does not preclude the stock from being a good trade.

This is what investors should focus on. It's not cruel, or disrespectful. In fact, for a man who has built what is viewed as the single greatest wealth machine of his generation by applying dispassionate investing logic, Buffett would advise you to focus on the value of the company.

Ask yourself this: If Buffett were to die tomorrow in a car or plane crash, would you be prepared to make the right investment decision? My point is that these little dribs and drabs that remind the market that succession is an issue at Berkshire Hathaway aren't preparing the investor very well to answer the fundamental question, and these headlines won't be going away.

Between now and the last succession headline -- the day the name in the envelope known only to the Berkshire board is revealed -- there are plenty of questions an investor needs to consider.

The name that will ultimately be selected from the Buffett successor short list -- a popular topic today -- isn't among the important questions. The investor won't know until they know who Buffett's successor is anyway, and when they do know, it won't matter: Bet that Berkshire shares will sell off no matter who is named Buffett's replacement and prepare a strategy for that day.

So let's run through the issues that you need consider today, but also needed to consider yesterday, the day before that, a year ago, and will need to keep in the back of your mind tomorrow and the day after that.

Critics say the Berkshire Hathaway succession plan is secretive and being secretive really responsible for the headline selling. The reality of whether or not sticking with Berkshire makes sense comes down to a few simple points:

You either trust Buffett and the board on succession or you don't -- and you won't be getting a better answer -- so you shouldn't own the stock if this paralyzes you.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BRK.A $190,520.00 0.00%
BRK.B $126.58 0.00%
AAPL $94.27 0.00%
FB $101.00 0.00%
GOOG $684.12 0.00%


Chart of I:DJI
DOW 15,914.74 -99.64 -0.62%
S&P 500 1,851.86 -0.35 -0.02%
NASDAQ 4,283.5920 +14.8290 0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs