However, Buffett did address a challenge that his successor may face and talked about the way his successor will approach the job.
One of the first questions of the day was about whether his successor will be able to make the same kind of deals he has, such as the $8 billion Berkshire invested in preferred shares of Goldman Sachs Group Inc. (NOK) and General Electric Co. (GE) during the crisis of 2008. Goldman and GE both wanted Buffett's stamp of approval along with Berkshire's money.
"I don't think that every deal I have made could be makeable by a successor," Buffett said.But Buffett said his successor will still be able to make big deals because Berkshire has nearly $40 billion in cash on hand and is willing to invest large amounts quickly. Buffett said deals like the ones with Goldman and GE haven't been as important to Berkshire as investing in Coca-Cola Co. (KO) or IBM (IBM) stock or buying entire businesses such as Iscar metalworking and Burlington Northern. His eventual successor will maintain the company's culture and continue to let key managers run Berkshire subsidiaries with little interference, Buffett said. He's known for his hands-off, decentralized management style. "You do not need to worry about my successor," he said. Shareholder John Zerngast, of Olathe, Kan., said the stock market might be uneasy about Buffett's age and that of 88-year-old Charlie Munger, but it shouldn't be because of how much Berkshire's 80-odd subsidiaries and investments are worth. "I don't worry about Warren and Charlie because the underlying value is there," Zerngast said. Besides all the companies Berkshire owns outright, it has major investments in such companies as Coca-Cola Co., IBM and Wells Fargo & Co. (WFC). On Friday, Berkshire said its first-quarter profit more than doubled to $3.2 billion from last year's $1.5 billion because this year's results weren't hurt by major disaster losses in Berkshire's insurance units. Buffett says the growth in the stock's book value -- the company's assets minus liabilities -- has outpaced the Standard & Poor's 500 index in all but eight years since 1965 while delivering a compounded annual return of almost 20%. In recent years, Buffett has repeatedly warned investors not to expect that type of return in the future because Berkshire's size makes it nearly impossible to keep growing at that rate.
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