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3:50 p.m. EDT
The sixth and final question that Doug Kass asked Buffett was about why he chose his son Howard Buffett to become the executive chairman once Warren is gone. Kass pointed to Howard's lack of experience as a risk to the future of the company. Howard has never run a large diversified business; he has never made material stock investments or worked on a major acquisition.
Buffett explained that Howard was chosen to protect the future of the company. In the event that a mistake is made in who is chosen as CEO of the company, Howard's responsibility will be to right that situation. Howard's job would not be to run the business. Buffett noted that he believed it would be significantly unlikely that the wrong person would be chosen.
Also see:Buffett's Next 5 Years and Berkshire Hathaway for the Ages
Howard cares about the business and has a vested interest in protecting Berkshire and its culture. Buffett said of his son, "He has no illusions at all about running the business. He won't get paid for running the business."
There are plenty of mediocre CEOs running the companies that shouldn't be, and when they are in a chairman role, it's hard to change that situation. Buffett wants to make sure that doesn't happen to Berkshire.
Charlie chimed in at the end, saying that "the board owns a lot of stock -- we're not trying to screw it up for the shareholders."
3:09 p.m. EDT update
Doug told me at the lunch break that question No. 5 would be a doozy, and it was.
He point blank asked Buffett for $100 million to run a short fund for Berkshire. He pointed to the success Todd Combs, who (along with Ted Weschler) helps to manage investments for Berkshire, had with short selling prior to joining Berkshire. Kass was building the case that Combs was hired by Buffett on that success and it may be time for him to give short selling another shot.
Also see:Warren Buffett Walks Exhibit Hall
Buffett stuck to his guns against short selling and denied Kass the job. He informed Kass that Combs didn't get the job from his success as a short seller.
Buffett said, "I have identified companies in the past that were far overpriced and have identified many frauds."
That being said, Munger noted that "shorting is a game that doesn't appeal to us."
2:51 p.m. EDT
Doug Kass asked question No. 4: "Are you at the point now where the game interests you more than the score?"
To which Buffett replied, "I think you have to love something to do it well."
Buffett notes that the intensity is not manifest every minute but it is still there.
Warren goes on to argue that just because Berkshire is investing in a different way than it has in the past does not mean that the passion has been lost -- and to see things that way, he scolded Doug, is incorrect. He emphasized that his intensity level is equal to what it was 40 years ago and that he hopes to keep it going for at least 10 more years.
Also see:Berkshire Hathaway Shareholder Meeting: Live Blog
Kass mentions the near-forensic due diligence that Buffett did for his first investment in
American Express(AXP) and comments that recently Warren made an investment in Bank of America from his bathtub.
Buffett's response: "I don't have to learn it a second time," referring to getting a handle on American Express's business. He also cited Geico as helping him to understand multiple rounds of investment in American Express.
"The passion has not gone, I promise you," Buffett concluded.
12:33 p.m. EDT update