This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Irreplaceable Warren Buffett Isn't Basis for Investing

Stocks in this article: BRK.A BRK.B

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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,903.16 +98.36 0.55%
S&P 500 2,070.19 -0.46 -0.02%
NASDAQ 4,764.6990 -0.6810 -0.01%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs