Buffett Falls Behind, Investors Concerned: Who Will Succeed Him?

Posted by - Monday, May 7th, 2012

Rumor has it that the individual Forbes credits as the world's third-wealthiest man is falling behind with company earnings.

This year marks the third consecutive year Warren Buffett's Berkshire Hathaway Inc. (BRK/A: US) has reported gains that fail to meet or extend beyond those of the S&P 500...

According to Bloomberg, Berkshire held an annual meeting on Saturday, May 5, in Omaha, Nebraska, noting Berkshire had fallen 2.4% below where the firm was at just one year ago on April 30, 2011. Meanwhile, the S&P 500 (SPX) has reported an advancement of 2.8 percent.

Calculating the results of the past three years proves the S&P climbed about 28 percent higher than Berkshire: S&P gains were right around 60 percent, while Berkshire's lagged at around 32 percent. 

Now Buffett is making an effort to convince Berkshire's numerous investors the company will succeed, assuring them the $200 billion company will continue to grow and thrive long after Buffett appoints a successor.

Consequently, Buffett's assistant, Carrie Kizer, announced shortly after Saturday's meeting that Buffett had decided against hosting a press conference on Sunday. He did, however, take questions from journalists regarding shareholders' questions...

The most prominent questions focused on the issue of Buffett's eventual successor. Shareholders appear increasingly concerned over the future of Berkshire in these uncertain economic times — especially with the eventuality of someone new taking over.

For the time being, Buffett said he is feeling great at 81 years old, and he loves what he's doing. There may be some time yet before someone takes over his role at Berkshire and the huge investment community surrounding the organization.

Buffett contends "when a transfer of responsibility is required, it will be seamless, and Berkshire's prospects will remain bright... we're not going to have an Arts Major in charge."

Buffett went on to emphasize the need for business schools to revamp their curricula so they were not merely teaching students “a lot of nonsense about investments.”

He also addressed specific investment questions during the session, paying little attention to responding to inquiries about making investments in China, and asserted that banks here in the United States are in a much better position than they were just a few years ago.

And regarding the infamous “Buffett Rule,this tidbit was found in the notes:

Minimum tax for the high earners...

When we are asking for shared sacrifice and given promises and we will have to cut back would make sure people with these huge incomes are taxed at a rate that they were taxed long ago. Exception in Obama proposal about charitable deductions.

Regarding the other infamous gold versus stocks debate, Buffett said Berkshire will do better than gold over the 50-year period — and he agreed with Jim Rogers's assertion that farmland will also outperform the yellow metal.

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