Berkshire after Buffett

Katie Martin (0:06)

Pushkin. He's 94, he's pretty much universally loved in American finance circles, and he's probably the most famous investor in the world. No, I'm not talking about Rob Armstrong. He's nowhere near that nice. But about Warren Buffett, he's announced his retirement from Berkshire Hathaway, which is a textiles company he bought way back in the day in 1965, and turned into an insurance and investment giant. He's still going to be chairman. He's not going anywhere really, but day-to-day management is passing along. Now, he's not just an investor though. His annual shareholder meetings draw thousands of adoring fans from all over the world every year, all the way to Omaha. I can't be the only person looking on that from this side of the Atlantic and wondering how on earth this whole mythology took hold. So today on the show, we're asking, will we ever see the likes of Warren Buffett again? This is Unhedged, the markets and finance podcast from the Financial Times and Pushkin. I'm Katie Martin, a markets columnist at FT Towers in London, and I'm joined down the line from New York City by Rob from the Unhedged newsletter. And Rob, you're not quite 94 just yet, but do you think you're still going to be...

Rob Armstrong (1:28)

Admit to 94 I don't look a day over 84 Let me tell you this. I, along with your friends, Oliver Ralph and Eric Platt, did about a four-hour interview with old Warren about five years ago, maybe a little more now. And we didn't know it was going to be four hours, but he was like 89 then. And let me tell you, he wore us out. We thought we had to rush to get our questions in because we don't know, oh, you have to leave the great Mr. Warren's office now. You know, you got your half an hour, get out of there. We asked everything we could think of. And he was like, any more questions? You guys don't want to keep talking? You know, what's going on? It's been great. He's a tireless person.

Katie Martin (2:12)

Amazing.

Rob Armstrong (2:13)

Yeah. And I think this is something, a general observation I make about people who are extremely successful in business broadly, CEO types or whatever, is they do tend to have in common this kind of bottomless well of physical energy. Basically, the reason I am not a CEO is because I constantly need to have a nap. Right.

Katie Martin (2:35)

Yes. One of the reasons.

Rob Armstrong (2:40)

Like I could go to the board meeting, but I get a little sleepy.

Katie Martin (2:47)

Let's start at the beginning a little bit. Because I'm not saying Europeans have never heard of Warren Buffett, but I am saying we kind of don't get it. Like there's no equivalent. There's like maybe George Soros, who obviously bet against the Bank of England and won back in 1992 I saw him speak in Davos, darling, a few years ago and he was tearing strips out of Facebook in the way that only a billionaire who is all out of flips to give can do. It was great.

Rob Armstrong (3:23)

Yeah, indeed. Berkshire and Buffett are generally different from any other kind of animal we have.

Katie Martin (3:29)

Totally weird.

Rob Armstrong (3:30)

Totally weird. So here's this business that started out when Warren was quite a young man in Omaha, Nebraska. He comes from a good family in Omaha. His dad was in politics. He gathers together some money and starts a little investment fund. And Berkshire Hathaway is actually the name of a company he bought that turned out to be a terrible failure and an awful investment, which I think is a nice irony.

Katie Martin (3:56)

This is the textile company, right?

Rob Armstrong (3:57)

Yeah, it was like they made like rugs or something like this. And, you know, he loves to talk about how he never should have bought the business and his partner Charlie Munger tried to talk him out of it. But because, you know, it's kind of part of his mystique, like for some corporate reason, it was just easier for him to merge into Berkshire Hathaway. So the most successful financial conglomerate in the history of the world is named for the failed textile mill it used to be, which I kind of love.

Katie Martin (4:28)

How bizarre.

Rob Armstrong (4:29)

So now, you know, fast forward 60 years, and you have a very interesting animal, which is made up of a bunch of companies, mostly in two areas. On the one hand, insurance. So there's the massive Berkshire Insurance and Reinsurance Operations and Car Insurance and Property Casualty, the whole, you know, large range of insurance products. And then there's a bunch of what you might term unfairly, old economy businesses, utilities, energy companies, railways. And then there's loads of bits and bobs. A sneaker company, Seas Candies. I recommend to your British friends and neighbors, if you are ever in America and specifically San Francisco, Seas Candies, delicious, tiny business they've owned for a long time.