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

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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).

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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.

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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.

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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. 

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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.

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