Berkshire Hathaway After Buffett
So the Berkshire Hathaway Annual Report is out. Only a fool would dare to question Buffett’s genius… so lets get on with the foolishness…
I find it a little curious to see Buffett highlight his disinterest in investing in businesses without “an enduring ‘moat’ that protects excellent returns on invested capital” and comment that “if a business requires a superstar to produce great results, the business itself cannot be deemed great”.
In terms of Berkshire Hathaway’s minority-share investments few would question that Buffett is this superstar, but what about the many businesses it owns? With bungled acquisitions so common these days, BH is a wonder because it handles acquisitions so successfully, usually keeping the original management onboard, motivated and happy.
E-government in Dubai is surprisingly effective due to the eagerness of heads of department to impress Sheikh Mohammed bin Rashid Al-Maktoumand and be showered with his praise.
The reason the second half the BH annual letter is usually so dull is because it isn’t written for anyone other than BH’s managers. This is where they get the chance to bathe in the praise they seek.
But when the charismatic, idolized Sheikh passes and a lesser - whose praise is not sought - takes over, what happens?