Berkshire's top execs take shareholders' questions

AP News
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Posted: Apr 30, 2011 5:11 PM
Berkshire's top execs take shareholders' questions

Berkshire Hathaway chairman and CEO Warren Buffett and vice chairman Charlie Munger spent more than five hours Saturday answering questions from shareholders.

Here is a sample of their comments on a variety of topics:

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BUFFETT'S SUCCESSOR:

Berkshire shareholders may have a little clearer picture of who might one day replace Buffett as chief executive, even though Buffett still didn't name the internal candidates for the job.

The 80-year-old Buffett offered high praise to one of the Berkshire executives believed to be a leading contender for the job, after a former executive who was believed to be a top candidate, David Sokol, recently resigned.

Buffett says Ajit Jain, CEO of Berkshire Hathaway Reinsurance Group, puts Berkshire's interest ahead of his own to an extraordinary degree.

"I can't think of a single decision he has made that I could have made better," Buffett said.

Buffett said the best deal he's ever made was hiring Jain, who is one of the most rational thinkers he's ever met.

The other Berkshire managers believed to be on the short list are Matt Rose, CEO of BNSF railroad; Greg Abel, president and CEO of MidAmerican Energy; and Tony Nicely, chief executive of Geico.

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US DEBT:

Buffett said he thinks the political games Democrats and Republicans play every time Congress considers raising the country's debt ceiling are silly. He said the U.S. is never going to have a debt crisis as long as it continues to issue debt in its own currency.

"It's going to be a growing country, so we're going to have a growing debt capacity," Buffett said.

Munger said the debt ceiling debate makes him think that both political parties are competing to see which can be more stupid, and Munger says Democrats and Republicans keep topping each other.

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RAISING KIDS

Buffett said any wealthy person who raises their children to think they are special simply because of the womb they emerged from will be making a mistake.

"If you really are going to raise your kids to think others should do the work for them ... you will probably not get a good result," Buffett said.

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BANKING:

The banking business should improve, but Buffett said profitability will be worse than it was during the early 2000s because banks aren't allowed to take on as much risk.

"That's a good thing for society," he said.

Buffett said he believes Wells Fargo and US Bank are both good operations. Berkshire owns stock in both.

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BYD

Munger said he is still enthusiastic about Chinese car and battery maker BYD. Berkshire has owned 9.9 percent of it since 2008. BYD has stumbled with some of its expansion plans and had to delay plans to enter the North American market.

Munger says the only reason BYD got into trouble was because the company tried to double its automotive sales every year for six years in a row. It worked for the first five years, he said.

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DIVIDENDS AT BERKSHIRE

Buffett said Berkshire will pay a dividend if he and Munger can no longer find a better use for the $38 billion cash the company currently holds.

"Every dollar that's been invested in Berkshire has created much more than a dollar in market value," Buffett said.