Hints at Warren Buffett’s Succession

Warren E. Buffett released his annual letter to shareholders on Saturday, expounding on business, reflecting on his 50 years assembling one of the world’s largest companies and adding to the growing tome of folk wisdom that has made him the rare beloved billionaire.

In it, he repeated previous statements that the Berkshire board had identified his successor as chief executive, but again did not reveal that person’s identity.

“Both the board and I believe we now have the right person to succeed me as C.E.O. – a successor ready to assume the job the day after I die or step down,” Mr. Buffett wrote. “In certain important respects, this person will do a better job than I am doing.”

But Berkshire’s vice chairman, Charlie Munger, writing in a separate letter to mark Mr. Buffett’s 50th year at the helm of Berkshire Hathaway, suggested that one of two men was most likely to get the job.

”The bad news is that Berkshire’s long-term gains – measured by percentages, not by dollars – cannot be dramatic and will not come close to those achieved in the past 50 year,” he wrote. “The numbers have become too big. I think Berkshire will outperform the average American company, but our advantage, if any, won’t be great.”

They weren’t that bad, though. Last year, once again, Berkshire Hathaway shares surpassed the Standard & Poor’s 500-stock index, rising 27 percent in 2014 compared with a gain of 13.7 percent for the S.&P.

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The New York Times