Nobody knows Berkshrie Hathway and Warren Buffett (and Charlie Munger) better than Whitney Tilson.
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Whitney has attended 26 consecutive Berkshire annual meetings and wrote a chapter of Poor Charlie’s Almanack, an homage to Munger.
(Whitney is also an amazing human being, raising roughly $3.5 million for Ukraine, setting up a COVID treatment camp in Central Park, and more charitable acts than I can relay in one article, or even a series.)
I spoke with Whitney outside the Omaha Hilton right after the 2023 Berkshire Hathaway annual meeting. We discussed how Whitney doesn’t worry about an activist campaign after Buffett passes and his A-shares – which have 10,000 times more per-share voting power than the more commonly held B-shares – eventually convert to B-shares and get donated.
Whitney agrees with me that once Buffett and Munger are gone, not only will the cachet of selling one’s business to Berkshire drop (selling to Berkshire brings enough intangible or semi-tangible benefits that managers may be willing to accept a lower price for the honor), but as Whitney added, many existing managers of Berkshire’s private portfolio (vs. Berkshire’s holdings in publicly traded equities) – being already past normal retirement age – may similarly choose to step aside.
Collectively, this would be a ding to Berkshire, if a ding of unknown proportion.
The other way to look at it is that it’s a measure of how much magic Warren and Charlie have created by virtue of their own reputations and personalities, versus persistent cultural factors at Berkshire or the swagger of Greg Abel, who helps these operating businesses.
All the same, Whitney – who would admit that he’s biased toward Berkshire – thinks Berkshire is a great long-term buy as a retirement stock, and will likely outperform the S&P 500 on a risk-adjusted basis – especially for investors who buy at the right times.
With the S&P 500 up roughly 7.5% year-to-date and Berkshire Hathaway up roughly 5.5% (as I type this), might now be one of those times? Watch my interview for more.
p.s. Remember that it’s also free to check out what a BBAE account can offer you!