OMAHA, Neb. – Thousands of faithful followers faced billionaire Warren Buffett on Saturday at the Berkshire Hathaway Inc. (BRK) annual meeting, learning about the company's latest acquisition but not getting much information about his chosen successor.
Buffett mentioned in his annual letter to shareholders in March that the company board had chosen the person who eventually will succeed him, but the company has not said who that might be.
Early in the six-hour gathering Buffett likes to call "Woodstock for capitalists," vice chairman Charlie Munger said shareholders should have much more important things to worry about than whether the company will struggle after Buffett is gone.
Munger told the crowd of about 24,000 people that Buffett has done such a great job of establishing the Berkshire's culture that there shouldn't be problems.
"Do you really think he's going to blow it when it comes time to pass it on?" Munger said.
Buffett, who has given no indication he plans to step down, said no formal training for the succession is necessary because the three Berkshire executives who he's said would be capable chief executives are already part of the company's culture. They already understand the importance of integrity, character and treating shareholders like partners, he said.
Buffett compared establishing Berkshire's culture to parenting because he and the other executives have to model behavior.
"A home has a culture. A business has a culture," Buffett said. "We try to do everything that is consistent with that."
Berkshire owns a diverse mix of more than 60 companies, including insurance, reinsurance, carpet, jewelry, furniture, restaurants and utility firms. And it has major investments in such companies as H&R Block Inc. (HRB), Anheuser-Busch Cos. (BUD) and Coca-Cola Co. (KO)
Shareholders who have grown to expect big gains from their investment in Berkshire were eager to hear more about its latest acquisition and about plans that Buffett might have for the $44.7 billion cash the company held at the end of the year.
Berkshire said Friday it was acquiring an 80 percent stake in privately held Iscar Metalworking Cos., which makes metal cutting tools. Buffett said Saturday that Berkshire is paying $4 billion for its 80 percent.
The Israeli company's chairman, Eitan Wertheimer, told the crowd that the deal started with a letter he wrote to Buffett in October and was completed after officials from the companies met.
"We had a very interesting lesson from Warren. We had an interesting lesson from Charlie," Wertheimer said. "And we survived both of them."
The meeting started with a traditional humorous movie, and its first segment was a cartoon spoof of "American Idol" called "Omaha Idol." The cartoon show hosted by Oprah Winfrey featured a competition to determine Berkshire's next acquisition, with rapper Snoop Dogg, Microsoft (MSFT) chairman Bill Gates and Vice President Dick Cheney making the finals of the competition.
Gates touted his latest invention: a firewall made out of asbestos. Cheney offered the weapons of mass destruction that he discovered on a hunting trip with Buffett and Munger, and in the cartoon Buffett recommended buying additional life insurance before going hunting with Cheney.
Based on a cartoon applause meter, the competition was won by Snoop Dogg's guard dog television designed to be placed in a home window.