Author Topic: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel  (Read 3643 times)

John Hjorth

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #10 on: January 10, 2018, 10:18:34 AM »
Good move.  It was overdue.  Munger is like 94 and Buffett is 87.  What's the probability that both will be around this time next year?

StubbleJumper,

Here is my morbid-bid on your ask: [and no, I don't think I'm stuttering]

Probability of 87 years old man to die this year ~ 12.48%
Probability of 93 years old man to die this year ~ 22.49%

Thus, probability of both Mr. Buffett and Mr. Munger being a live at 2018 year end = [100% - 12.48%] * [100% - 22.49%] = 67.8%

Life expectancy of Mr. Buffett: 5 years
Life expectancy of Mr. Munger: 3.2 years.

Source: For Mr. Buffett.For Mr. Munger.
”In the race of excellence … there is no finish line.”
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Charlie

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #11 on: January 10, 2018, 10:30:13 AM »
"Life expectancy of Mr. Buffett: 5 years
Life expectancy of Mr. Munger: 3.2 years."

The life expectancy of very rich investors could be a little bit higher, because of good prevention,
best medical care, using the best antidotes when ill and the "hard work" involved with investing.  ;)


Here is the CNBC transcript from today:

https://www.cnbc.com/2018/01/10/full-transcript-billionaire-investor-warren-buffett-speaks-with-cnbcs-becky-quick-on-squawk-box-today.html

StubbleJumper

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #12 on: January 10, 2018, 12:50:50 PM »
Good move.  It was overdue.  Munger is like 94 and Buffett is 87.  What's the probability that both will be around this time next year?

StubbleJumper,

Here is my morbid-bid on your ask: [and no, I don't think I'm stuttering]

Probability of 87 years old man to die this year ~ 12.48%
Probability of 93 years old man to die this year ~ 22.49%

Thus, probability of both Mr. Buffett and Mr. Munger being a live at 2018 year end = [100% - 12.48%] * [100% - 22.49%] = 67.8%

Life expectancy of Mr. Buffett: 5 years
Life expectancy of Mr. Munger: 3.2 years.

Source: For Mr. Buffett.For Mr. Munger.


Yep, 33% chance that one of them will make his way to the big reading room in the sky and about a 3% likelihood that both will be gone.  It's high time that a concrete succession move is made.  If only they would initiate a capital management plan to deal with the excessive cash....


SJ

John Hjorth

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #13 on: January 10, 2018, 02:06:35 PM »
There is a 98.98% probability that I'll repeat this morbid excersise here on CoBF in a year, StubbleJumper!

Charlie, I couldn't find statistics for billionaires only!

Furthermore, I think Statler & Waldorf will live on forever.
« Last Edit: January 10, 2018, 02:11:24 PM by John Hjorth »
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

kiwing100

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #14 on: January 10, 2018, 07:28:37 PM »

Abel's expertise and experience is managing existing non insurance operations.  Potentially using the cash generated from those operations to invest capital in future to make acquisitions of controlled businesses (particularly large infrastructure type businesses). Most likely he will be aided by Ted and Todd in capital allocation.

Jain's area of expertise is capital raising to further finance those acquisitions in the form of generating low cost float and managing and pricing the underwriting risk, and insurance business.


Dynamic

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #15 on: January 11, 2018, 12:33:55 AM »
https://www.cnbc.com/video/2018/01/10/warren-buffett-may-be-slowly-passing-the-baton-at-berkshire-hathaway.html

Yesterday's CNBC Squawk Box Buffett interview in full - just under an hour's viewing. Not too much of Joe and his bricks!

petec

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #16 on: January 11, 2018, 01:03:27 AM »

Yep, 33% chance that one of them will make his way to the big reading room in the sky and about a 3% likelihood that both will be gone.  It's high time that a concrete succession move is made.  If only they would initiate a capital management plan to deal with the excessive cash....

SJ

I'm not sure that's Buffett's style. I think he'd rather pick a successor who he trusted to make capital management decisions in the future, depending on the opportunities then. I agree with him. It's not rational to let the potential death of the CEO affect your capital allocation decisions at a time when there are few opportunities, if someone can take over who is competent and who will have better options in the future. I think that holds no matter how smart the outgoing management are.

LC

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #17 on: January 11, 2018, 01:19:38 AM »
Quote
I think he'd rather pick a successor who he trusted to make capital management decisions in the future

I don't think that person exists. I think it exists for certain vacuums (insurance, op biz, stock investments). If it were me (ha!), I would institute a dividend or repurchase program. Then, priority of capital goes Jain>Abel>T&T.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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ValueMaven

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #18 on: January 11, 2018, 02:57:10 AM »
brilliant move by our chairman

ps: JPM raised price target on the b's to $235

sincerely,
ValueMaven

longinvestor

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Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
« Reply #19 on: January 11, 2018, 05:58:02 AM »
The most rational thing to do. Appoint Munger Jr. first. Nothing can be more important than avoiding capital allocation mistakes by the next Chairman. Besides, the mother lode of capital allocation opportunities likely to present themselves will likely be in energy and insurance. There's a lot of idiot capital going into insurance as we speak. As Munger said, they are busy turning liquid capital to illiquid ones. Includes buybacks. Think of those as one-time / one-way decisions. Can't get those wrong, need a Munger to weigh in.
« Last Edit: January 11, 2018, 06:58:49 AM by longinvestor »