Roundtable: Warren Buffett or Steve Jobs?

Berkshire Hathaway's (NYSE: BRK-A  ) (NYSE: BRK-B  ) Warren Buffett is the greatest investor of our time; Apple's (Nasdaq: AAPL  ) Steve Jobs may just be the greatest innovator of our time.

But which one is more integral to the success of his company? I asked some of our top analysts. Here's what they had to say.

Matt Koppenheffer, Fool contributor
I'm going to go with Steve Jobs on this one. I have a tendency to dog Apple's stock -- mainly because of the valuation and the company's determined stance against dividends -- but the transformation that Apple has made from the late '90s to today is nothing short of incredible, and Jobs has been the driver of that turnaround. And when we talk about the magic that Jobs brings to the table, we can't forget the hugely successful Pixar -- now owned by Disney (NYSE: DIS  ) -- a company that Jobs nurtured to greatness after buying it from George Lucas back in 1986 .

This isn't to minimize the impact that Buffett has had on Berkshire Hathaway. To a large extent, Buffett is Berkshire Hathaway. However, it seems that in recent years, Buffett has been increasingly positioning Berkshire to be able to keep on keeping on once he's no longer at the helm. The massive acquisition of Burlington Northern Santa Fe last year is a perfect example -- it's a huge, stable operating company that will eat up a lot of capital in the form of capital expenses, in exchange for, as Buffett put it, "reasonable" returns.

And with a stock portfolio loaded down with major positions in Coca-Cola (NYSE: KO  ) , Procter & Gamble (NYSE: PG  ) , and Wal-Mart, it won't take an investor of Buffett's caliber to manage the company's investments.

Morgan Housel, Fool contributor
Jobs, for sure.

Jobs' role at Apple is the captain of a ship that reinvents itself every three years or so. If he were to die tomorrow, Apple could be ruptured fairly soon without its visionary. He's like Jordan was to the Bulls. A pillar of its success.

Berkshire doesn't need that kind of leader, because Buffett is just the buyer, not the operator and innovator, of its assets. He bought companies when they were tiny and undervalued, and now they're huge profit machines. These subsidiaries don't rely on Buffett in the slightest, and in fact he goes out of his way to leave them alone.

When Buffett dies, no one will stop drinking Coke or buying GEICO insurance. When Jobs dies, Apple may struggle to innovate in the future. (Wow, how did I turn this into such a mortal subject?) 

Tim Beyers, Fool contributor and Rule Breakers analyst
Are we seriously asking this question? We've never seen Berkshire run by anyone other than Buffett. Jobs, on the other hand, secretly went under the knife and then left Chief Operating Officer Tim Cook in charge of Apple for six months.

And not just any six months. Shortly after Jobs left for medical leave, Apple settled a dispute with IBM to allow chip guru Mark Papermaster join the company and manage the design team acquired with PA Semi. Today, the A4 processor -- which this team helped create -- is at the heart of both the iPad and the latest iPhone.

Could the capable team at Berkshire handle a similarly massive shift in focus without Buffett? Maybe, but we haven't seen the evidence the way we have with Apple.

Rick Munarriz, Fool contributor and Rule Breakers analyst
Berkshire Hathaway's shares will undoubtedly take a hit the day that Buffett moves on. No offense, Charlie Munger, but it's true. This is an investment company, and it's no different than buying into Biglari Holdings (NYSE: BH  ) for Sardar Biglari's vision, or snapping up a hot mutual fund on the strengths of its manager.

Apple, on the other hand, can survive without Jobs. It had no problem thriving last year during his health-related absence. There may never be another charismatic chieftain donning the black turtleneck, but Apple will continue to crank out cool products to the masses that will gladly pay a premium for them.

In short, I would be more worried about a brain transplant at Berkshire than a liver transplant at Apple.

Alex Dumortier, CFA, Fool contributor
Both of these men are iconic leaders, both founded the companies they preside over, and both are somewhat overrated in terms of their importance to their organization. However, I'm going with Steve Jobs, and here's why: In Berkshire Hathaway, Warren Buffett has built a robust portfolio of businesses in stable industries that are well-run by their own managements. Beyond that, his lasting contribution has been to foster a culture at Berkshire that will survive him.

The greatest challenge post-Buffett will be to try to reproduce Buffett's prowess at capital allocation, but even that is not perhaps as daunting as it appears: With the Burlington Northern deal, Buffett signaled that Berkshire is willing to acquire companies that earn lower, utility-like returns. Furthermore, we know that he is tracking a number of candidates to succeed him as chief investment officer.

Meanwhile, Steve Jobs' progeny, Apple, operates in an industry that is subject to disruptive shifts in technology and customer behavior. Indeed, Jobs is a true technology visionary who has been responsible for a few of those shifts himself. As I wrote recently, "there is no company today that exemplifies the promise of the Holy Grail of 'digital convergence' like Apple" -- and that is largely Jobs' doing. Unfortunately, his combination of vision and drive is exceptionally rare and more vital to Apple's continued success than Buffett's uncommon investing talent is to Berkshire.

Anand Chokkavelu, CFA, Fool Editor
This is a tough one.

Warren Buffett is his company. In fact, we frequently talk about Berkshire Hathaway's moves by saying "Warren Buffett bought x company." You can't separate the two.

Meanwhile, Steve Jobs is a true visionary. As Matt pointed out earlier, he's the man behind both Pixar and Apple. Amazing. As for the argument that Jobs was out for six months and Apple did just fine, I dissent. You don't need Steve Jobs to roll out the latest version of the iPhone -- you need him to figure out what's next, and make that next truly awesome.

This matchup is pretty much a tie for me, but I'll go with Buffett on this principle: I bought shares of Berkshire Hathaway during the economic downturn because companies like Goldman Sachs and General Electric were throwing sweetheart deals at him that no one else could get. That reputation can't be replaced.

We're deadlocked 3 to 3 on Buffett vs. Jobs. Break the tie in the comments section below. Or go read our roundtable on whether Apple or Google is a better buy.

Berkshire Hathaway, Walt Disney, Coca-Cola, and Wal-Mart Stores are Motley Fool Inside Value choices. Apple, Berkshire Hathaway, and Walt Disney are Motley Fool Stock Advisor selections. Coca-Cola and Procter & Gamble are Motley Fool Income Investor recommendations. The Fool owns shares of Berkshire Hathaway, Biglari Holdings, Coca-Cola, and Procter & Gamble. Try any of our Foolish newsletters today, free for 30 days.

This roundtable article was compiled by Anand Chokkavelu, who owns shares of Berkshire Hathaway and Disney. The Motley Fool has a disclosure policy.


Read/Post Comments (9) | Recommend This Article (22)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 16, 2010, at 3:24 PM, andyzhu wrote:

    Mr Coke (a mediocre product - but a whole lot of sugar addicts - healthy combination;-) against Mr Apple (brillant and innovative). Value investors will certainly prefer proven cash gushing mediocrity, sorry certainty, over our visionary friend in the black turtleneck. My sympathy goes out to Mr Steve -brillant- Jobs.

  • Report this Comment On June 16, 2010, at 4:21 PM, edyboom223 wrote:

    Buffett wins. If Apple dies, then it's gone forever. Berkshire consists of various diversified companies, and the chances of them all disappearing at once are...less than slim. There's less downside with Berkshire. Also, they're raking in billions a year in dividends which will only be increasing over time by KO, PG, JNJ, and more. Billions...for sitting there and doing nothing!

  • Report this Comment On June 16, 2010, at 6:56 PM, irapm wrote:

    Integral to the success of his company? Zero doubt if the sentence is modified to include the words "continued growth".

    Steve Jobs is the innovative hare while Warren Buffet is the investing tortoise.

    I am happy investing with Apple but my kids are happier with Burlington Northern.

  • Report this Comment On June 16, 2010, at 8:02 PM, stockgeek54321 wrote:

    Lets ask this question. If you have $10,000 to invest and you decide to give it to Jobs or Buffett for the next 50 years, to whom would you give it to. No question it would be Buffett. His principles and ideas will certaintly survive the test of time. I think Job has done incredible things but he was lucky to around at the right place and the right time.

  • Report this Comment On June 16, 2010, at 11:56 PM, RipRagge wrote:

    I'm long AAPL. I have no holding in Berkshire Hathaway.

    Buffett is Berkshire Hathaway. When he passes, the magic of the company is gone.

    Apple's culture of innovation will survive Jobs for a while – not forever, but for a bit.

    The difference is slight, but Buffett is more clearly the most important to his company.

  • Report this Comment On June 17, 2010, at 11:26 AM, catoismymotor wrote:

    Chinaboy99 put it very well.

    I want to add is this: Let's pretend that today Steve and Warren are at the beginning of their careers, are in need of start up capital. Both come to you, a prospective angel investor, to give their pitch. Who would you be more likely to go with? I would be more inclined to put my money with Warren's start up because he represents less risk. Steve's products are innovative and shiny but as Morgan pointed out: Jobs' role at Apple is the captain of a ship that reinvents itself every three years or so. I do not want a company that needs to do that. It presents the possibility that 3.3 times a decade the company could fail, and fail big.

  • Report this Comment On June 17, 2010, at 12:14 PM, dddickey wrote:

    Buffett

  • Report this Comment On June 17, 2010, at 12:34 PM, stan8331 wrote:

    I think Berkshire is less dependent on Buffett at this point in time than Apple is on Jobs, because Berkshire is a more mature company and because Buffett is rarely involved in the business operations of its subsidiaries. Warren Buffett is a brilliant assembler - once Berkshire was built up into a massive company, there's now less for him to do on an ongoing basis.

    Apple rose from near-death to incredible heights in a relatively short period of time, and it was primarily Jobs' vision and innovation that made it happen. A LOT of companies make cell phones, but people in huge numbers willingly pay a large premium for the iPhone. It's not just marketing - folks like Apple's products because they're sexy and much more fun and easy to use than most competitors' offerings. If making products like that were easy, everyone would be doing it. Apple can survive without Jobs, but it's not at all clear whether they can maintain the same sort of rapid growth and innovation that we've seen over the past 15 years.

  • Report this Comment On June 17, 2010, at 12:45 PM, sagitarius84 wrote:

    I am all for Buffett. When Jobs left Apple in 1985, it went nowhere for 12 years and was almost extinct without him by 1997. As for Buffett his company is a diversified conglomerate, and his successors while not known to anyone else have been slected by the Oracle of Omaha himself..

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