Berkshire Hathaway’s Success Will Continue After Munger (and Buffett)

We
expect
this
to
continue
even
after
Buffett
no
longer
runs
the
show,
and
we
believe
Berkshire’s
culture
of
management
autonomy
and
entrepreneurship
has
to
a
large
degree
become
institutional.
That
said,
we
do
expect
the
managers
who
follow
in
Buffett
and
Munger’s
footsteps
to
work
with
a
slightly
different
opportunity
set,
gradually
evolving
Berkshire
from
a
reinvestment
machine
into
one
that
is
more
focused
on
returning
capital
to
shareholders,
which
is
what
we
would
come
to
expect
of
a
company
of
this
size
with
dwindling
investment
opportunities.

We
also
recognise
that,
eventually,
when
neither
man
is
running
the
business,
it
is
going
to
be
difficult
for
the
firm
to
replicate
some
of
the
advantages
that
come
with
having
an
investor
of
Buffett’s
caliber,
especially
with
Munger
at
his
side
for
all
these
years
enhancing
Buffett’s
talents.
That
said,
we’ve
long
believed
Berkshire
to
be
the
best
possible
example
of
what
a
decentralised
conglomerate
should
be:
a
judicious
allocator
of
capital,
incurring
minimal
costs
for
shareholders.
We
expect
those
aspects
of
the
business
to
continue
regardless
of
who
is
at
the
helm.

As
long
as
nothing
is
done
to
tamper
with
what
has
been
a
very
efficient
and
effective
operating
structure,
Berkshire
should
be
able
to
survive
the
departure
of
Buffett
and
Munger
in
the
long
run.
With
all
the
company’s
operating
businesses
managed
on
a
decentralised
basis,
pushing
responsibility
for
each
business
down
to
the
subsidiary
level
and
eliminating
the
need
for
layers
of
management
control,
the
next
set
of
managers
should
be
able
to
focus
on
stewardship
of
the
firm’s
portfolio
and
capital-allocation
decisions.

Key
Morningstar
Metrics
for
Berkshire
Hathaway