Warren Buffett, who has vowed to not leave his fortune to his children, has chosen his farmer son Howard to succeed him as Chairman of Berkshire Hathaway. It will be Howard's job to watch over the culture of the company, but not the investment strategy. That will most definitely be left to someone with investing experience and a college degree, both of which Howard cannot claim.
But what Howard does have going for him is the fact the he is the only one of Warren's three children to ever serve on the board of Berkshire Hathaway. Plus, he's a savvy business man in his own right, having done fairly well for himself in the agribusiness industry.
"You worry that somebody will be in charge of Berkshire that uses it as their own sandbox in some way," Warren Buffett told Leslie Stahl on Sunday's edition of 60 Minutes. "The odds of that happening are very, very, very low, but having Howard there adds just one extra layer of protection."
This news comes less than a year after David Sokol's resignation from the company for unethical behavior. Sokol, a former Berkshire executive and widely believed to replace Warren as the investing guru of Berkshire, bought shares in Lubrizol knowing Berkshire might buy the company. (See: Berkshire Finds David Sokol's Conduct Violated Company Policies)
Josh Brown, author of The Reformed Broker blog and vice president of investments at FusionIQ, joined The Daily Ticker's Aaron Task to discus the senior Buffett's decision and whether it truly makes sense for shareholders. (Disclosure: Brown and all his clients currently own Berkshire Hathaway Class B Shares.)
"No one is going to fill Warren's shoes. [So] what you need at Berkshire is someone that is going to be a caretaker; somebody that understands why the company has gotten to where it has gotten," says Brown, who is of the opinion that Howard Buffet is the perfect person to do just that. "This is a legacy that can [only] be continued by someone who is unassuming…and has bigger things on his mind than self-enrichment."
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