Would You Buy Berkshire Without Buffett?

In a recent Businessweek article, Warren Buffett stated that Berskire was well equipped for succession. Buffett appears to be preparing Berkshire investors for his departure. Buffett said that the majority of the time in directors meetings “ is spent talking about the succession question because it’s enormously important.” If Buffett was not at Berkshire Hathaway, would you still buy the stock?

I raised the issue of Why There Will Never Be Another Buffett in a previous post but never raised the question if Berskshire is still a good investment minus Buffett. I have owned shares of Berkshire Hathaway for years now. I do not own the Class A with its whopping six figure price tag! I bought the junior Class B  shares when they were only around $3,000 per share. Since than the stock has split and is under $100 per share now. The main reason for my owning the stock was my trust in the investing prowess of Warren Buffett.

Owning Berkshire was a way of feeling as if Warren Buffett was investing for me. I could benefit from his investing decisions and have the greatest investing mind managing my money. His performance over the years has been excellent and he has brought lots of wealth to his shareholders. With no Buffett at Berkshire, I would have to think long and hard about whether or not to hold onto Berkshire’s shares.

Would you buy shares of Berkshire Hathaway if Warren Buffett was not there?

Photo by: Ethan Bloch

Comments

  1. Buffett built a great collection of assets. Those assets will continue to be great even after Buffett leaves the company or passes on.

    The primary question is whether those assets are reasonably priced. The leadership of Buffett gives the stock a bit of a premium that I think will dissipate somewhat when he’s gone.

  2. avatar Mark says:

    So, you would continue to hold the stock.

  3. avatar Craig says:

    The companies are still good companies, right? The thing with Buffet is he buys companies he plans to keep because they are good in the first place. Those companies won’t change when he’s gone. P&G? GEICO?

    Maybe some years down the line of there are a few changes to who’s running things or if there are some sell0offs that are questionable, then maybe it would be good to sell.

    Heck, when he steps down it may be a good time to buy since some may panic and sell off.

  4. avatar Zed's dead says:

    As with most of the companies its a question about price. Of course i would buy Berkshire if the price was right.

  5. I’m not sure if I’d continue to hold or not. I haven’t looked into the stock all that closely, but it seems to be trading for a premium. The company is extremely safe and diversified and run by Buffett, so it’s worth a premium but how much? If I faced huge capital gains upon having to sell, then I might not, since I wouldn’t quite call it overvalued. Just not cheap.

    It’s not great to think about, but Craig might be right- a good buying opportunity might present itself when Buffett retires. I might wager that Berkshire should start paying dividends after Buffett leaves as well, because a company of that size won’t have many good places to allocate capital without Buffett there.

  6. Probably, b/c the managers have all been with him for decades!

Trackbacks

  1. [...] Buy Like Buffett asked an important question: Would you Buy Berkshire Without Buffett? [...]

Speak Your Mind

*