WSJ: The Man Preparing for a Berkshire Hathaway Without Warren Buffett

[ValueMaven]

https://www.wsj.com/finance/greg-abel-berkshire-hathaway-executive-6b7d8988?mod=hp_lead_pos1

[fareastwarriors]

free link:

 

https://www.msn.com/en-us/money/other/the-man-preparing-for-a-berkshire-hathaway-without-warren-buffett/ar-AA1lW7qx

[yesman182]

I personally would like to know how long Greg wants to work. Does he really want to dedicate his life to carrying on warrens legacy. I am sure he is smart enjoys learning etc, but it seems like managing the day to day operations would get tiring. Maybe he makes himself chairman and gives more operational responsibility to others in time. 

[John Hjorth]

1 hour ago, yesman182 said:

... but it seems like managing the day to day operations would get tiring. ...

 

The day to day operations of the Berkshire subsidiaries are the responsibilities of the CEOs of the respective Berkshire subsidiaries. The management [on strategic / board level] of what capital is already invested in Berkshire subsidiaries will continue to be of imperative importance and the root of future Berkshire growth going forward.

 

-Merry Christmas!

Edited December 24, 2023 by John Hjorth

[yesman182]

Yes, but he plays a large role in the biggest issues, train derailments, lawsuits with pilot etc.  some may love it, but not sure if that is what I want to do in my 80’ if I have a few hundred million in the bank. I hope he does work for Berkshire into his 90’s and I hope he molds the job to match his life. Like Warren  promoting Greg and ajit and hiring Todd and Ted, that allowed Warren to focus on what he enjoyed the most. 

[schin]

12 hours ago, yesman182 said:

I personally would like to know how long Greg wants to work. Does he really want to dedicate his life to carrying on warrens legacy. I am sure he is smart enjoys learning etc, but it seems like managing the day to day operations would get tiring. Maybe he makes himself chairman and gives more operational responsibility to others in time. 

 

Good question - but, isn't Warren's method to be super decentralized. How much operational stuff does Greg need to do? They have a small HQ staff because they delegate stuff to the operating units.

 

Greg is pretty much just managing MidAmerica.... and once in the blue moon take a call when there is a capital crisis and involved Ted/Todd, if needed. 

 

I have nothing against Greg, but is he better than Jamie Dimon? Would Tim Cook feel comfortable calling him? Brian M. from BOA? He is really that much better than David Sokol? They're great operators... but, would people call Larry Culp or Greg Abel for business advice? 

 

I just haven't seen Greg in action... maybe, because MidAmerican has been so sheltered that we cannot see all this moves... but, MidAmerica as a stand-alone is not in the Fortune 50 -- that is the domain of his decisions right now.... at least, that's what I can tell.

[xo 1]

On 12/24/2023 at 11:21 PM, schin said:

 

Good question - but, isn't Warren's method to be super decentralized. How much operational stuff does Greg need to do? They have a small HQ staff because they delegate stuff to the operating units.

 

Greg is pretty much just managing MidAmerica.... and once in the blue moon take a call when there is a capital crisis and involved Ted/Todd, if needed. 

 

I have nothing against Greg, but is he better than Jamie Dimon? Would Tim Cook feel comfortable calling him? Brian M. from BOA? He is really that much better than David Sokol? They're great operators... but, would people call Larry Culp or Greg Abel for business advice? 

 

I just haven't seen Greg in action... maybe, because MidAmerican has been so sheltered that we cannot see all this moves... but, MidAmerica as a stand-alone is not in the Fortune 50 -- that is the domain of his decisions right now.... at least, that's what I can tell.

Thought-provoking questions, although I wonder if you are setting the bar too high.  If Abel is as good as Dimon, Cook, Brian M. that's more than you can ask for.  But as big a question to me is who is Greg's Charlie?  Structurally, I'm not sure Ajit is intended to play that role.  And to be fair, I don't think you can structure such a role into being.  Abel needs to find one or more talking partners.  Perhaps it is Todd or Ted or a combination of the three.   

[Munger_Disciple]

1 hour ago, xo 1 said:

Thought-provoking questions, although I wonder if you are setting the bar too high.  If Abel is as good as Dimon, Cook, Brian M. that's more than you can ask for.  But as big a question to me is who is Greg's Charlie?  Structurally, I'm not sure Ajit is intended to play that role.  And to be fair, I don't think you can structure such a role into being.  Abel needs to find one or more talking partners.  Perhaps it is Todd or Ted or a combination of the three.   

 

 

Brian M made a huge mistake loading up on longer dated treasuries at BAC. So I don't think he belongs in that list. I think Abel is an excellent operating executive. I just don't know how he thinks about risk, capital allocation and avoiding left tail risks the future. I am relying on Warren & Charlie's judgment in this regard. It is like the scene in the Gladiator movie where senator Gracchus when introduced to Maximus by Lucilla says: "Marcus Aurelius trusted you. His daughter trusts you. I will trust you." I think Abel will work with Ajit, Todd & Ted on big issues and large acquisitions. I would also add that Ajit is the new Charlie; he is off the charts smart, no-nonsense, direct, doesn't sugarcoat the problems (for example at GEICO), to the point and crisp in his answers at the AGM. Very much reminds us of Charlie. Plus Ajit is the best risk manager on the planet; Greg will undoubtedly seek his counsel and benefit from his wisdom in making important decisions at Berkshire. 

 

So I would say to Abel: "Charlie Munger trusted you. Warren Buffett trusts you. I will trust you." 

 

https://www.google.com/search?q=gladiator+scene+gracchus+trusts+maximus&sca_esv=593843995&rlz=1C5CHFA_enUS1015US1015&ei=WkqLZdyzDaDKkPIPmfec-AU&ved=0ahUKEwjcyJy6iq6DAxUgJUQIHZk7B18Q4dUDCBA&uact=5&oq=gladiator+scene+gracchus+trusts+maximus&gs_lp=Egxnd3Mtd2l6LXNlcnAiJ2dsYWRpYXRvciBzY2VuZSBncmFjY2h1cyB0cnVzdHMgbWF4aW11czIFECEYoAEyBRAhGKABMgUQIRigATIFECEYnwUyBRAhGJ8FSMQiULcPWNUgcAF4AZABAJgBqQGgAYQLqgEEMTAuNLgBA8gBAPgBAcICChAAGEcY1gQYsAPCAgUQIRirAuIDBBgAIEGIBgGQBgg&sclient=gws-wiz-serp#fpstate=ive&vld=cid:fae2b5ee,vid:jQhMB8qzvX8,st:0 

 

Edited December 26, 2023 by Munger_Disciple

[schin]

1 hour ago, Munger_Disciple said:

 

 

Brian M made a huge mistake loading up on longer dated treasuries at BAC. So I don't think he belongs in that list. I think Abel is an excellent operating executive. I just don't know how he thinks about risk, capital allocation and avoiding left tail risks the future. I am relying on Warren & Charlie's judgment in this regard. It is like the scene in the Gladiator movie where senator Gracchus when introduced to Maximus by Lucilla says: "Marcus Aurelius trusted you. His daughter trusts you. I will trust you." I think Abel will work with Ajit, Todd & Ted on big issues and large acquisitions. I would also add that Ajit is the new Charlie; he is off the charts smart, no-nonsense, direct, doesn't sugarcoat the problems (for example at GEICO), to the point and crisp in his answers at the AGM. Very much reminds us of Charlie. Plus Ajit is the best risk manager on the planet; Greg will undoubtedly seek his counsel and benefit from his wisdom in making important decisions at Berkshire. 

 

So I would say to Abel: "Charlie Munger trusted you. Warren Buffett trusts you. I will trust you." 

 

https://www.google.com/search?q=gladiator+scene+gracchus+trusts+maximus&sca_esv=593843995&rlz=1C5CHFA_enUS1015US1015&ei=WkqLZdyzDaDKkPIPmfec-AU&ved=0ahUKEwjcyJy6iq6DAxUgJUQIHZk7B18Q4dUDCBA&uact=5&oq=gladiator+scene+gracchus+trusts+maximus&gs_lp=Egxnd3Mtd2l6LXNlcnAiJ2dsYWRpYXRvciBzY2VuZSBncmFjY2h1cyB0cnVzdHMgbWF4aW11czIFECEYoAEyBRAhGKABMgUQIRigATIFECEYnwUyBRAhGJ8FSMQiULcPWNUgcAF4AZABAJgBqQGgAYQLqgEEMTAuNLgBA8gBAPgBAcICChAAGEcY1gQYsAPCAgUQIRirAuIDBBgAIEGIBgGQBgg&sclient=gws-wiz-serp#fpstate=ive&vld=cid:fae2b5ee,vid:jQhMB8qzvX8,st:0 

 

 

I am hoping the long-dated treasuries is like Warren's investment in Dexter... It's happens, but it doesn't jeopardize the farm.... 

 

Yes, it's hard trying to get around his head on risk, capital allocations etc. Even at prior AGMs, his answers were very operational and long-winded. It was boiled to the essence like Warren, Charlie, Jeff Bezos, Elon Musk, Jamie Dimon.... it's just lifeless and a bit corporate speak. 

 

I think Abel will work with Ajit, Todd, and Ted.. but, the thing about Warren... is he hates committees... even when he disagrees with Charlies -- Warren is his own man and makes his own decisions. David Sokol's at least brough Lukoil, I have not see any investments being presented by Abel.   It was a monarchy and now, upon Warren's death, it's now a committee/democracy with 4 cooks in the kitchen. 

 

Ajit has plenty of time to do his win-liners at the AGM, I hope he leans forward more.  I do not know who really runs GEICO -- Todd or Ajit -- but, it was terribly underinvested in the 1990s and 2000s. Someone missed that hugely and now they're playing catch up. Nobody fell on the sword for that. But, that GEICO thing is a major f up in my book. Talk to my premiums.

[Munger_Disciple]

15 minutes ago, schin said:

 

I am hoping the long-dated treasuries is like Warren's investment in Dexter... It's happens, but it doesn't jeopardize the farm.... 

 

Yes, it's hard trying to get around his head on risk, capital allocations etc. Even at prior AGMs, his answers were very operational and long-winded. It was boiled to the essence like Warren, Charlie, Jeff Bezos, Elon Musk, Jamie Dimon.... it's just lifeless and a bit corporate speak. 

 

I think Abel will work with Ajit, Todd, and Ted.. but, the thing about Warren... is he hates committees... even when he disagrees with Charlies -- Warren is his own man and makes his own decisions. David Sokol's at least brough Lukoil, I have not see any investments being presented by Abel.   It was a monarchy and now, upon Warren's death, it's now a committee/democracy with 4 cooks in the kitchen. 

 

Ajit has plenty of time to do his win-liners at the AGM, I hope he leans forward more.  I do not know who really runs GEICO -- Todd or Ajit -- but, it was terribly underinvested in the 1990s and 2000s. Someone missed that hugely and now they're playing catch up. Nobody fell on the sword for that. But, that GEICO thing is a major f up in my book. Talk to my premiums.

 

Well, no one can replace Warren including Greg. But I think he will do fine especially with Ajit as his consiglieri.  It won't be a decision by committee. Greg will seek advice from the three especially Ajit I think on big matters but at the end of the day, he will make the final decision. 

 

GEICO was a mess before Ajit took over all the insurance operations in 2018 and he put Todd in charge as CEO and is working with him to fix GEICO. I think Warren was blind-sided by his love for GEICO and ignored the festering problems until Ajit took over. This fiasco actually shows us that in important ways Ajit (and likely Greg) are better managers than Warren himself. So there is hope post-Buffett. 

Edited December 26, 2023 by Munger_Disciple

[villainx]

so the real question is preparing for post Ajit?

[Munger_Disciple]

1 hour ago, villainx said:

so the real question is preparing for post Ajit?

 

Hopefully we don't have to worry about that for a long, long time. 

[Thrifty3000]

I think Greg is the operations guy - following Dave Sokol’s hard core manage by objectives playbook. Basically, Greg is responsible for holding under-performers accountable for getting back on track.

 

Todd is one of the best business analysts on the planet. So he gets to review - and reject - hundreds of deal opportunities a year.
 

And Ajit is the insurance god.
 

I think we’re in good hands. 

[bargainman]

Makes me think of the 2 quotes...

 

When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.

 

“Go for a business that any idiot can run – because sooner or later any idiot probably is going to be running it.”

 

So which is BRK?

[villainx]

If you think textile is going to make a comeback…

[CassiusKing1]

9 hours ago, bargainman said:

Makes me think of the 2 quotes...

 

When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.

 

“Go for a business that any idiot can run – because sooner or later any idiot probably is going to be running it.”

 

So which is BRK?

Neither.  Most of what is in Berkshire right now are great businesses, AND Greg Abel and crew are FAR from idiots.

 

Most of what Warren and Charlie did was read all day and wait for a fat pitch.  The obvious.  I'm certain that this crew can do the same.  Their biggest error would be to try to do too much.  Berkshire is built to run itself, Greg just needs to be patient and wait for the no brainer.

[Whensthepaintdry?]

It’s weird there is so much doubt in Greg and team. Or maybe I just have blind faith. Buffett has said that he has handled the operating businesses far better than he ever had. Greg has been allocating good chunks of capital at BHE. Berkshire’s Apple investment first came from Ted or Tod. If anything maybe we will see better results than the last 10 years. Not to be negative, but it’s not like Buffett has hit it out of the park other than Apple in the recent past. Maybe the rest of the team has been operating with a hand tied behind their back. 

Edited December 28, 2023 by Whensthepaintdry?

[Eldad]

On 12/28/2023 at 8:14 AM, Whensthepaintdry? said:

It’s weird there is so much doubt in Greg and team. Or maybe I just have blind faith. Buffett has said that he has handled the operating businesses far better than he ever had. Greg has been allocating good chunks of capital at BHE. Berkshire’s Apple investment first came from Ted or Tod. If anything maybe we will see better results than the last 10 years. Not to be negative, but it’s not like Buffett has hit it out of the park other than Apple in the recent past. Maybe the rest of the team has been operating with a hand tied behind their back. 

I would feel better about Ted or Todd taking over honestly. Greg reminds me of Charlie description of a bad ceo (tall, leader, ex-president of his fraternity). I am sure he is very smart and abel, but in my opinion you need a out of the box thinker, philosopher type like Charlie to be anything better than average. Warren was the whiz kid, but Charlie was soooo important IMO. 

I have been telling myself for years that I don’t know crap and Charlie and Warren do and I just have to trust them. 

[Munger_Disciple]

43 minutes ago, Eldad said:

I would feel better about Ted or Todd taking over honestly. Greg reminds me of Charlie description of a bad ceo (tall, leader, ex-president of his fraternity). I am sure he is very smart and abel, but in my opinion you need a out of the box thinker, philosopher type like Charlie to be anything better than average. Warren was the whiz kid, but Charlie was soooo important IMO. 

I have been telling myself for years that I don’t know crap and Charlie and Warren do and I just have to trust them. 

 

Do you really think Warren is going to blow one of the most important decisions of his life? I don't think so. Also you have a very competent owner oriented board as a check on new CEO.

Edited January 18 by Munger_Disciple

[Eldad]

13 minutes ago, Munger_Disciple said:

 

Do you really think Warren is going to blow one of the most important decisions of his life? I don't think so. Also you have a very competent owner oriented board as a check on new CEO.

No I don’t. That’s why I hold lots of BRK.
 

Greg is just odd to me. But better than a BS artist that tries to pretend he is the next W and C I guess. 

[Blugolds]

48 minutes ago, Eldad said:

I would feel better about Ted or Todd taking over honestly. Greg reminds me of Charlie description of a bad ceo (tall, leader, ex-president of his fraternity). I am sure he is very smart and abel, but in my opinion you need a out of the box thinker, philosopher type like Charlie to be anything better than average. Warren was the whiz kid, but Charlie was soooo important IMO. 

I have been telling myself for years that I don’t know crap and Charlie and Warren do and I just have to trust them. 

 

You have two of the best investment minds in history with Warren and Charlie, who had their pick of probably anyone in the world to choose as CEO and they picked Greg, to me that says a lot. Also, I happen to like Gregs personality, he's not overly flashy, mostly low profile, coaches his kids hockey team, seen around town regularly, he comes across as an average guy, majority of his net worth in BRK and has the same values as WB and CM. You cant replace the ultimate duo, but I think they made a good choice. Also he's probably one of the best in the world in terms of energy knowledge and heading BHE I think that is the area with the most potential moving forward for BRK investment with satisfactory returns, especially if the push for more green energy continues going forward. 

 

I dont think BRK will have stellar returns going forward, but I think they will be satisfactory, and even if there arent adequate elephants available, coasting would be fine too, protect the base, target that 7-10% return and plump it up with buybacks when opportunity presents, I dont think he has to be a genius to do well. I do believe that Omaha considers shareholders as partners, and Warren certainly values the relationship and trust from many of the families who initially invested with him and still hold the majority of their family wealth in BRK, I dont believe he would squander that with poor succession planning. 

[xo 1]

12 hours ago, Blugolds11 said:

 

You have two of the best investment minds in history with Warren and Charlie, who had their pick of probably anyone in the world to choose as CEO and they picked Greg, to me that says a lot. Also, I happen to like Gregs personality, he's not overly flashy, mostly low profile, coaches his kids hockey team, seen around town regularly, he comes across as an average guy, majority of his net worth in BRK and has the same values as WB and CM. You cant replace the ultimate duo, but I think they made a good choice. Also he's probably one of the best in the world in terms of energy knowledge and heading BHE I think that is the area with the most potential moving forward for BRK investment with satisfactory returns, especially if the push for more green energy continues going forward. 

 

I dont think BRK will have stellar returns going forward, but I think they will be satisfactory, and even if there arent adequate elephants available, coasting would be fine too, protect the base, target that 7-10% return and plump it up with buybacks when opportunity presents, I dont think he has to be a genius to do well. I do believe that Omaha considers shareholders as partners, and Warren certainly values the relationship and trust from many of the families who initially invested with him and still hold the majority of their family wealth in BRK, I dont believe he would squander that with poor succession planning. 

I share your view on Greg.  At the high end of range of outcomes, he turns out to be a Tim Cook.  WEB extols his operational prowess; who am I to argue?  Maybe he can optimize operations on the existing businesses and expand the moats.  At the mid-range, perhaps Abel won't be able pull the trigger on elephants, so he shifts to returning cash flow to investors through share buybacks and perhaps dividends.  At the low-end, he can't stop firing at over-priced elephants, fails to reinvest in the great businesses, and squanders billions in cash.  Nothing we've heard about Abel suggests he will fall prey to taking huge swings at stupid targets.  And I'd like to believe that Ajit, Ted and Todd will have the sway to prevent Greg from making huge mistakes if I'm wrong about that.  

 

But I can certainly envision a Berkshire where the mid-range is the reality you've portrayed.  Indeed, I'm not sure we haven't been living in that world for the past decade, where playing around with small, cheap, borrowed yen on the Japanese stock market is the most exciting transaction pursued.  The test will be whether Abel is able to identify the huge opportunities presented in a dislocated market and, much harder, has the courage to bring out the buckets to act on those opportunities aggressively.  

[scorpioncapital]

"Olson said he is confident Abel is a match for the CEO job. “He’s no Warren Buffett,” Olson said. “But neither is anyone else.”"

 

Have you noticed how Nadella at Microsoft looks like a much balder version of Gates? No idea where he found the guy but his mannerisms, grin, and talk its almost like he's some futuristic clone of Gates! )

 

[schin]

9 hours ago, scorpioncapital said:

"Olson said he is confident Abel is a match for the CEO job. “He’s no Warren Buffett,” Olson said. “But neither is anyone else.”"

 

Have you noticed how Nadella at Microsoft looks like a much balder version of Gates? No idea where he found the guy but his mannerisms, grin, and talk its almost like he's some futuristic clone of Gates! )

 

 

Microsoft under Ballmer was terrible. Nadella is the real deal was at Microsoft with Gates and Ballmer...Just talent in hiding.

 

I do not believe Apple has found another Steve Jobs or Steve W. actually... Tim Cook is an operations genius, but not a great creative genius. Does anyone know who spearhead the 3-D goggles coming out? Is he/she Jony Ives' 2.0?

 

But, Abel might be a Tim Cook where he keeps the operations going. If someone needs a big deal, will he be the one they call? It might be Jamie Dimon. Maybe, Tom Gayner?

 

I'm not sure if the AGM will be less popular... and people might gravitate toward Markel's meeting.. Or an Ackman meeting.. or Fairfax for all I know.

[DooDiligence]

9 hours ago, schin said:

 

But, Abel might be a Tim Cook where he keeps the operations going. If someone needs a big deal, will he be the one they call? It might be Jamie Dimon. Maybe, Tom Gayner?

 

I'm not sure if the AGM will be less popular... and people might gravitate toward Markel's meeting.. Or an Ackman meeting.. or Fairfax for all I know.

 

Who will be

the next

American Idol?

Edited January 24 by DooDiligence