What will happen to the price of BRK when Warren Buffett passes the torch?

[manaboutown]

He is now 93, I believe, and at some point he will need to relinquish control or pass away as Charlie Munger did.

Short term I expect BRK to take a hit. My concern is what will happen to the price of the stock long term?

Any thoughts and/or predictions?

[Arctic Fox]

He is now 93, I believe, and at some point he will need to relinquish control or pass away as Charlie Munger did.

Short term I expect BRK to take a hit. My concern is what will happen to the price of the stock long term?

Any thoughts and/or predictions?

What is the price of BRK as a % of its net assets per share?

[manaboutown]

What is the price of BRK as a % of its net assets per share?

BRK.A (Berkshire Hathaway) Equity-to-Asset (https://www.gurufocus.com/term/equity-to-asset/BRK.A)

[tophcfa]

Buffett will be a tough act to follow, but Apple did just fine after Steve Jobs and new retirees are still snapping up homes in the Villages after Harold Schwartz and Gary Morse. I would expect there is a “in Warren Buffett we trust” good will premium built into the stock price that might disappear, but only time will tell. There used to be a significant “in Elon Musk we trust” premium built in Tesla’s stock price, but gullible investors seem to be smartening up to that one.

[MrChip72]

Buffet has said that the people taking over after him and Munger are gone are smarter than them. I tend to believe him. From the sounds of his last speech earlier this month it seems like he might decide to retire before he dies first.

[manaboutown]

Buffet has said that the people taking over after him and Munger are gone are smarter than them. I tend to believe him. From the sounds of his last speech earlier this month it seems like he might decide to retire before he dies first.

I agree BRK has top flight investment and executive talent who are highly capable people. Yet it seems to me that some of the opportunities Buffett was offered and the deals he was able to unilaterally strike shooting from the hip so to speak may not be as possible after he is gone from BRK. Too, the sheer size of the company now makes it difficult to achieve huge gains on a single deal.

I first heard about Buffett in the 1970s after he had started buying into GEICO which had been my insurer. I was a young government employee living in the DC area during the late 1960s, loved muscle cars and GEICO offered great rates. I bought a few shares of BRK in the early 1980s and just held on to it.

8 Warren Buffett Deals That Won Big | The Motley Fool (https://www.fool.com/investing/2017/11/13/8-warren-buffett-deals-that-won-big.aspx)

[bragones]

Buffett has already named Greg Abel as his successor and he has attributed many past success stories to Greg so I suspect that what you get in the next few years of Warren's life is what you'll get after he passes and that will likely be just as stable and well performing as BRK's past. I do think the stock will take a short term hit though, as it did years ago when news of Warren having a colon issue surfaced.

[rsmurano]

It’s a crap shoot. There have been many businesses/fund managers that have taken big hits when their founders have left, retired or died. To name a few: Apple, Starbucks, and Disney. Tim Cook is no Steve Jobs! Apple failed miserably when Jobs was fired over 30 years ago and floundered for a long while after Steve’s death. When Richard Aster of Meridian Growth investment died, Morningstar advised to stay away. Same for Dave Williams.

This is 1 of the reasons to go with index funds since there is no active manager involved.

[MidWestIA]

BRK is a celebrity stock the millionaires who bought it years ago and people like me buy it to go to the stockholder meeting. Who will go when he's gone if they even have it as a weekend event like it has been. And it's been pretty flat for quite a while

[merrymini]

Like Jobs, Buffet is unique and not easy to replace, I would say irreplaceable. Others may suffice but would not have the same unique qualities that the originals created. Apple has not be innovative since the loss of Jobs and competitors have caught up not even to mention that the world has changed since then. These people ARE special and their success shows it.

[ron32162]

What will happen? I doubt you will find a Soothsayer on this site.

[lawgolfer]

He is now 93, I believe, and at some point he will need to relinquish control or pass away as Charlie Munger did.

Short term I expect BRK to take a hit. My concern is what will happen to the price of the stock long term?

Any thoughts and/or predictions?

It's an easy prediction that there will be a short term drop in the price of the stock; however, it will be very short. The value in Berkshire is crystal clear by looking at its holdings, which are much like an index fund. For example, the $170B held in cash isn't going to change in price when Buffett dies, nor will the market price of the Apple stock held by Berkshire. Any significant change will occur over the course of the following year or two following his death.

In the late 1980's, our law firm started making some money. One of my partners had been a broker with Shearson Lehman before going to law school. I was trying to "play" the stock market, with some success and many failures. He told me to stop and to just put everything I had into Berkshire. Oh how I wish I had taken his advice! It took 20 years of ups and downs before I wised up.

[Stu from NYC]

Berkshire has a huge amount of cash on hand and will be interesting to see how they use it

[manaboutown]

Berkshire has a huge amount of cash on hand and will be interesting to see how they use it

Yes. BRK bought a little Chubb, $7B, but may have $200B in cash in a few months. The market keeps getting pricier. Shiller PE Ratio is quite high, double its mean.

[Arctic Fox]

BRK.A (Berkshire Hathaway) Equity-to-Asset (https://www.gurufocus.com/term/equity-to-asset/BRK.A)

"BRK.A's Equity-to-Asset is ranked better than 88.66% of 494 companies in the Insurance industry: Industry Median: 0.24 vs BRK.A: 0.53"

On that basis, I would suspect any drop to be temporary

[Arctic Fox]

He is now 93, I believe, and at some point he will need to relinquish control or pass away as Charlie Munger did. Short term I expect BRK to take a hit. My concern is what will happen to the price of the stock long term? Any thoughts and/or predictions?

BRK's top five holdings account for 80% of the portfolio, so you could always sell BRK and reinvest (in the same %) in those five stocks.

[manaboutown]

BRK's top five holdings account for 80% of the portfolio, so you could always sell BRK and reinvest (in the same %) in those five stocks.

I would have to pay huge LTCG taxes as my BRK shares are all held in taxable accounts so that is not an option for me. I do separately hold a little AAPL, CVX and BAC but I did not get the deal on BAC Buffett did!

[jimjamuser]

He is now 93, I believe, and at some point he will need to relinquish control or pass away as Charlie Munger did.

Short term I expect BRK to take a hit. My concern is what will happen to the price of the stock long term?

Any thoughts and/or predictions?
No hit to stock right away because a lot of his portfolio is long term investments. He will also leave behind a crack staff. Possibly the stock could decrease long, long term, but i won't be alive to see it. Apple has NOT suffered greatly since the death of Steve Jobs.

[jimjamuser]

It’s a crap shoot. There have been many businesses/fund managers that have taken big hits when their founders have left, retired or died. To name a few: Apple, Starbucks, and Disney. Tim Cook is no Steve Jobs! Apple failed miserably when Jobs was fired over 30 years ago and floundered for a long while after Steve’s death. When Richard Aster of Meridian Growth investment died, Morningstar advised to stay away. Same for Dave Williams.

This is 1 of the reasons to go with index funds since there is no active manager involved.
Index funds are very good!

[Topspinmo]

He is now 93, I believe, and at some point he will need to relinquish control or pass away as Charlie Munger did.

Short term I expect BRK to take a hit. My concern is what will happen to the price of the stock long term?

Any thoughts and/or predictions?

Somebody will probably have to pay more taxes than their secretary.:pepper2:

[Topspinmo]

I would have to pay huge LTCG taxes as my BRK shares are all held in taxable accounts so that is not an option for me. I do separately hold a little AAPL, CVX and BAC but I did not get the deal on BAC Buffett did!

I guess you don’t have army of lawyers getting you out of paying taxes? :22yikes:

[CoachKandSportsguy]

Yes. BRK bought a little Chubb, $7B, but may have $200B in cash in a few months. The market keeps getting pricier. Shiller PE Ratio is quite high, double its mean.

A former hedge fund quant I follow officially pronounced the market in bubble territory as of Friday. . normalized interest rates, strong US dollar, hawribble commercial real estate market, authoritarian aggression in geopolitics hasn't produced normalized valuations. The market is being supported right now by the options market quant alpha strategies, the value insensitive index funds being bought every month by 401k/503b savers/investors along with a few technology FOMO momentum stocks. IYKYK

Investment thesis all work until they don't. . .

[Two Bills]

I often worry that I am not worried enough about financial markets, then I realize all my worries went away, when, 27 years ago, my wife and I cashed in anything connected to stocks, shares, and the ever fluctuating "Market," and went with cash.

Cash is very good for your health! :spoken:

[manaboutown]

I often worry that I am not worried enough about financial markets, then I realize all my worries went away, when, 27 years ago, my wife and I cashed in anything connected to stocks, shares, and the ever fluctuating "Market," and went with cash.

Cash is very good for your health! :spoken:

Well, I never had much of my net worth in the stock market and hence over the years paid little attention to it. I tend to look at buying a stock in a company as buying a piece of the business as does Buffett. I got lucky when I bought a little BRK back in the 1980s and never really paid much attention to it or my other holdings. I focused on real-estate investing and frankly still do as I do not trust the stock market. After selling a couple properties in the last two years due to the LLC members aging into their 80s and some passing away I put some sale proceeds into stocks but am keeping much of it in cash, T-biils and money market funds, at least for now.

[Two Bills]

Well, I never had much of my net worth in the stock market and hence over the years paid little attention to it. I tend to look at buying a stock in a company as buying a piece of the business as does Buffett. I got lucky when I bought a little BRK back in the 1980s and never really paid much attention to it or my other holdings. I focused on real-estate investing and frankly still do as I do not trust the stock market. After selling a couple properties in the last two years due to the LLC members aging into their 80s and some passing away I put some sale proceeds into stocks but am keeping much of it in cash, T-biils and money market funds, at least for now.

Yes indeed. Made a lot of our retirement funds from property whilst working.
Buy a dump, do it up, sell, repeat. Did all the work ourselves, so the only costs were materials.
We have some good inflation plus small interest cash funds here in the UK, all tax-free.
Nothing spectacular but steady. Last two years has been very good interest with all the inflation, which is still relatively high over here.