Buffett's Ultimate Vote of Confidence in Berkshire Hathaway
Rolfe noted that it is not just Buffett whose wealth -- all slated for philanthropy -- will be in Berkshire stock for years to come, either. Berkshire chief operating officer Charlie Munger's family will also have the vast majority of its wealth in Berkshire stock. "The implication is that this is their grand investing plan and I think it is a tremendous vote of confidence for shareholders and Berkshire managers," Rolfe said.
Plenty of critics say Buffett talks out of both sides of his mouth. You can also make the case that his personal stake in Berkshire Hathaway can't override or mask serious questions about the company's growth potential and access to earnings drivers without him at the helm.
Remember when Buffett made his biggest acquisition ever, Burlington Northern railroad, and said it was an all-in wager on the U.S. economy? That statement doesn't just reflect a railroad bet that attracted some skeptics. The biggest Buffett all-in wager of all is the personal 98% wealth concentration in Berkshire Hathaway, the market's best single-stock proxy for the U.S. economy.
Skepticism, or at least a healthy dose of counter-logic about Buffett's wealth will, and should, persist.
"I think Buffett's concentration of wealth in Berkshire is part of the entire Buffett mystique, and is probably not comparable to other CEOs' estate planning. I'm sure that he has that level of confidence in Berkshire's long-term prospects, but even if he was only pretending to be that confident in retaining that much BRK stock, his lifestyle isn't really at risk," said Meyer Shields, analyst at Stifel.
In any event, as succession will remain at the top of the list among concerns of Berkshire shareholders, they can at least see that Buffett is keeping his money where his mouth is, and that's worth remembering.
If you believe in Buffett as being a shrewd investor, the fact that he still hasn't sold one share of his company and has no plans to do so, is an all-in wager by the best investor ever that at least merits an investing footnote.
-- Written by Eric Rosenbaum from New York.
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