The 1 Person Who Should Replace Warren Buffett

We asked five people who they would like to see step into Warren's shoes after he's gone.

Jun 28, 2014 at 2:00PM

G

As much as long-term shareholders would like him to, Warren Buffett isn't going to be atop Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) forever. The topic of Buffett's potential successor is nothing new, but who are these potential heirs and what could they mean for Berkshire Hathaway shareholders who aim to hold their position for decades to come.

To get a better idea of this talent pool, we asked five Berkshire-loving Fools who they would like to see step into Warren's shoes after he's gone.

Matt Koppenheffer: Don't take what I'm about to say the wrong way, but I think Matt Rose should run Berkshire because he's less critical to the success of the subsidiary he currently oversees (BNSF).

G

To be sure, BNSF, does not run itself. The success the railroad has seen, and the reason why Buffett was so high on it that he decided to buy the whole darn thing, has a lot to do with the smart management of Matt Rose. And Rose's managerial skill is a big part of the reason why I'd be happy seeing him run all of Berkshire.

But BNSF is a business that has an extremely strong moat -- via its huge rail network -- and has reinvestment requirements that speak for much of the capital that the business generates. This means that exceptional management can help, but isn't as critical as it is to other Berkshire businesses. For comparison, consider what happens if Ajit Jain -- another CEO front-runner -- is tapped. The conversation would then have to be how Ajit would be able to perform the duties of both the overall Berkshire CEO and the manager of the catastrophe and other large-risk insurance operations, because Ajit is a key piece of the puzzle in the latter businesses.

As a bonus notch for Rose: He runs an industrial-type business for Berkshire and those are increasingly the types of businesses that Buffett is looking at for his "elephant" acquisitions.

Patrick Morris: Warren Buffett and Berkshire Hathaway have a cadre of CEOs who would make for great replacements of Buffett. But if I had to pick one, I'd chose a dark horse in Brad Kinstler, who sits atop Buffett's dream business of See's Candy.

G

When he was named CEO of See's in 2005, it came after his previous position atop Cypress Insurance and Fechheimer's. And that's just the reason I'd select him: the wide range of leadership experience he's had, from his time running a candy, apparel, and insurance businesses.

Buffett almost never moves managers across industries, and Kinstler is a rare exception. Knowing Berkshire Hathaway is now a conglomerate made up of operating businesses, not just investments and insurance, his experiences will help him steer the ship.

After he was moved to Fechheimer's Buffett said, "Brad is hitting home runs in his new job, just as he always did at Cypress." And when discussing the record earnings See's had in 2011, he told us to, "credit Brad Kinstler for taking the company to new heights since he became CEO in 2006."

"Home runs" and "new heights" at a collection of business after first starting in insurance? Sounds like a perfect fit to be the next CEO of Berkshire Hathaway.

Jessica Alling: It's been said by The Fool before, Warren Buffett invests like a girl. Keeping that in mind, my choice for Buffett's replacement is someone that the Oracle already has extreme confidence in and who has benefited from his close attention over the past few years: Tracy Britt Cool.

As chairman to some of Berkshire Hathaway's subsidiaries, Cool has helped oversee many of Berkshire's smaller investments, allowing the Oracle to see to bigger issues, but her importance to Buffett's operations continues to increase. Cool has been noted for her level-head, which helps her manage the various fires that are bound the spring up now and then in such a sprawling company.

One distinct advantage comes straight from a Buffett observation: "She thinks like I would." So while Cool may think like a man, she invests like a woman and could serve as a great replacement for Buffett, when his time to move on comes.

Kingkarn Amjaroen: The most likely successor of Warren Buffett is Ajit Jain. Though those others are valid candidates, I think Warren Buffett will prefer someone with hands-on management experience, deep insurance business know-how and a successful investment record. 

Ajit Jain runs Berkshire Hathway's reinsurance division and can look back on decades of experience in the insurance business. Ajit Jain also seems to be held in high regard within Berkshire Hathaway and has now been working for Warren Buffett's conglomerate for almost 30 years. 

Insurance operations are at the core of Buffett's empire. Picking a seasoned insurance executive with a deep understanding of value investing and Berkshire Hathaway's corporate culture is the right move for Buffett to ensure a smooth transition.

Gates

Photo: World Economic Forum

Brendan Mathews: I'd like to see Bill Gates takeover for Warren Buffett as the next CEO of Berkshire Hathaway.

Not only is Gates extremely intelligent, widely admired and only 58 years-old, but he also has a deep respect for Warren Buffett's legacy and values of Berkshire Hathaway. Gates and Buffett have been close friends since 1991, and Gates has been on the board of Berkshire Hathaway since 2004.

And, Gates has more at stake than honoring his friend's legacy -- nearly half of his foundation's assets are invested in Berkshire Hathaway shares. I don't know if Gates is interested in the job, but he's the person that I'd pick to run the show after Warren. 

Warren Buffett isn't worried about his successor. But this scares him.
At the recent Berkshire Hathaway annual meeting, Warren Buffett admitted this emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

Jessica Alling and Kingkarn Amjaroen have no position in any stocks mentioned. Brendan MathewsMatt Koppenheffer, & Patrick Morris own shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers