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Even the Next Buffett Doesn't Know Who the Next Buffett Is

Chris Nichols

Take the man who's generally viewed as the greatest investor of all time, a stock that goes for $120,000 a share, a company whose multifaceted businesses makes it one of the biggest corporations in the world, and you've got the beginnings of mystery.

The company here is Berkshire Hathaway (BRK-A), a Nebraska-based financial services, insurance and consumer goods firm run by a man who's always in the hunt for the title of the world's richest individual -- Warren Buffett. The mystery is exactly who will replace the 81-year-old as chief executive when he's no longer running the firm he has helmed since the 1960s. And it seems to be getting deeper by the day.

Plenty of people are tired of the whole guessing game. Plenty aren't. Buffett has a following that his shareholders would likely describe as loyal -- he has produced millionaires among his long-time investors. Those who don't entirely buy the story of the folksy but brilliant Midwestern investor who just happened upon $40 billion or so in personal wealth might describe it as cult-like.

Either way, questions have been around for years about who will one day take the baton from Buffett. Until a year ago, many Berkshire Hathaway observers thought it would be David Sokol, one of Buffett's executives. But then serious questions emerged about Sokol's share-buying in a company called Lubrizol, which Berkshire was in the process of acquiring, and he left the company under a cloud.

Buffett has previously said the company had a short list of his potential successors, and this weekend, when he released his annual letter to shareholders, he dropped another hint: The replacement has been identified. Take that, disbelievers.

Sort of. As it turns out, Buffett wasn't telling the rest of us who this person is, just that they existed. Even more curiously, Buffett followed up by saying that the person he has in mind also doesn't know who he or she is. One might contend this is the type of information shareholders would like to have. Or a future CEO. Maybe.

What gives? Journalist Heidi N. Moore offered this possibility in her take:

"Buffett doesn't want to just give the house away. He won't name his successor just yet. He has rejected the idea of having a 'crown prince' in place, for good reason: no sooner would that man be named, than the press, colleagues and investors would lay siege to him, comb his life for clues to his brilliance, ready to place their blind faith in all of his pronouncements. The crown prince may not be ready for that kind of attention -- and Buffett may not yet be ready to give it up."

The bottom line is this. Buffett isn't in any rush to give us the details. He's not in any rush to give his successor the details. So while it's unlikely, it could even be you -- assuming you have years of value-investing experience and interest in running a $200 billion company.