Question No. 3 -- Does a Berkshire Breakup Make Sense?
I started by saying, "When you are gone, and we hope that's not for a long time." To which Warren quipped, "No one more than I!" I then prefaced the question by saying that in response to a previous question, Buffett suggested that, in time, Berkshire might be more centralized in terms of management strategy. Q: Warren, in the past, you have demonstrated a great respect for Dr. Henry Singleton, the founder and long-time CEO of the diversified conglomerate Teledyne ( TDY). You have written about Singleton: "Henry is a manager that all investors, CEOs, would-be CEOs and MBA students should study. In the end, he was 100% rational, and there are very few CEOs about whom I can make that statement." You have publicly stated that Singleton had the best operating and capital deployment record in American business. Prior to his death, he broke up Teledyne into three companies. Dr. Singleton told our mutual friend Lee Cooperman that he did it for a couple of reasons. There is one reason in particular I want to ask you about. According to Singleton, Teledyne was hard to manage for one CEO. What would you say about the Berkshire situation, given your company's greater complexity and the recent management issues over the past several years? And what is the advisability of restructuring Berkshire into separately traded companies organized along business lines? A: Both Charlie and Warren spent some time responding to both the history of Teledyne, Singleton's role and Berkshire's structure. Buffett underscored his confidence in his current management team at the divisional levels. "Breaking Berkshire into several companies," he said, "I am convinced would produce poorer results."
Question No. 4 -- Has Your Investment Process Become Less Intense?
Q: Mae West once said, "The score never interested me, only the game." Are you at that point now where the game interests you more than the score? But before you answer, let me explain why I asked. In the past, your research has been all-encompassing, whether measured in time devoted to selecting investments and acquisitions or in the intensity of analysis.