Forbes has a good column article by Martin T. Sosnoff, entitled Deals are Buffett’s Fountain of Youth. Sosnoff focused on Berkshire Hathaway today and made some sensible prediction on the company post-buffett.
Sosnoff looked into each reporting segment of Berkshire and came up with an estimate of $13 billion in operating earnings for the company. This earning, derived from insurance, railroads, manufacturing and service businesses, is subject to business cycles. That is $13 billion Berkshire has to deploy on an annual basis. Of course, the investment activities Buffett did during the financial crisis added to the cash that has to find a better return.
Sosnoff downplayed the importance of WEB’s stock picking prowess and his capability of making acquisition deals that worth $10 billion a piece. He went as far as stating that this is how Berkshire is going to be like in 10-years after Warren Buffett.
First on the equity portfolio, according to Sosnoff, about half of the $60 billion is tied to mega-holdings such as Coca-Cola, Wells Fargo, and American Express and WEB’s successor will not want to touch them because of tax implications.
Then on the mega deals and future of Berkshire post-Buffett, Sosnoff stated:
Read the full text.
Sosnoff looked into each reporting segment of Berkshire and came up with an estimate of $13 billion in operating earnings for the company. This earning, derived from insurance, railroads, manufacturing and service businesses, is subject to business cycles. That is $13 billion Berkshire has to deploy on an annual basis. Of course, the investment activities Buffett did during the financial crisis added to the cash that has to find a better return.
Sosnoff downplayed the importance of WEB’s stock picking prowess and his capability of making acquisition deals that worth $10 billion a piece. He went as far as stating that this is how Berkshire is going to be like in 10-years after Warren Buffett.
First on the equity portfolio, according to Sosnoff, about half of the $60 billion is tied to mega-holdings such as Coca-Cola, Wells Fargo, and American Express and WEB’s successor will not want to touch them because of tax implications.
Then on the mega deals and future of Berkshire post-Buffett, Sosnoff stated:
You want Buffett today not for stock picking prowess but for macro gambits that push around chess pieces with $10 billion price tags. Burlington Northern was symptomatic of Buffett’s fifth and closing act. He is going to buy huge operating enterprises that at least participate in the normalized growth of the economy.
This is how Buffett lives on 10 years after he dies. He rests embedded in the long term viability of the country like a bee frozen in a jar of amber honey. There are dozens of capable executives who can oversee operating companies, even a handful are savvy deal makers, but few can stand alone as creative macro thinkers.
Read the full text.
