WEB and CM giving advise to other CEOs?

[nickenumbers]

Do you think WEB and CM would offer their advise or input if they were solicited for it from a humble CEO?

 

I know that they don't want to be bothered with 100 CEOs asking 100 basic questions.  No.  But, if they were asked for their genuine opinion on something would they provide it.

 

I was thinking about it because GE is in quite a mess.  And the GE brand is iconic.  If I were the new CEO I would do everything under my power to save the brand and right the ship on behalf of all of the stakeholders and myself.  That might include a call to WEB and CM to get their thoughts and input.

 

 

On the back end of it, I have hear CM give the example a couple of times to people asking for input or advise.

 

One man came to Mozart and asked him how to write a symphony. Mozart replied, “You are too young to write a symphony.” The man said, “You were writing symphonies when you were 10 years of age, and I am 21.” Mozart said, “Yes, but I didn’t run around asking people how to do it.”

 

 

What do you all think?

[Guest longinvestor]

Even better would be if they seek advice and capital as the answer. Bring big questions

[longterminvestor]

WEB/CM don't give away anything for free - they run a business, not a charity.  WEB reimburses BRK for postage annually regarding his personal mail sent by the firm.  Why would they give free advice if they could wait until the humble CEO is begging them to buy the business for 60 cents on the dollar?

 

I believe WEB and CM’s first devotion is to the shareholders of BRK. Combined they own close to 40% of the firm ergo it’s their money more than most.  My theory is the 100 businesses who need help, financing, advice, or otherwise, are attracted to the shadow of integrity/character that BRK casts and if they can align - their (for example GE's current situation) sins can be washed away.  Goldman is another example of this.  There is a price for that shadow(washing of sins) and WEB/CM value the shadow more than anything which is great for us shareholders.  WEB/CM should be cold when discussing business but in my experience, that is needed when a deal is on the table.  No emotion, just business.  I don't believe the "Oracle from Omaha" or affable old men routine to be a ruse, it is genuine no doubt but the Solomon deal really changed how WEB/CM operate.  The Solomon deal was very close to ruining their reputation and now BRK knows how to navigate shark invested waters much better.  Reputational risk is a major factor in BRK's deal making and we entrust WEB/CM to evaluate ALL aspects on deals or ongoing business concerns.  WEB still has a rankle with how the insurance claims for 9/11 could have been avoided if they would have priced for Terrorism in the property reinsurance placement.  WEB advised on the risk and underwriters didn't price for it.  WEB thinks at such a high level it is scary. 

 

Soon enough we will entrust Ajit/Gregg/Todd/Ted with the deal making process.  They won't give anything away for free either, in my opinion.  I believe they have the character and business acumen to satisfy the shareholders ongoing concerns of running the existing businesses of BRK and do deals. For example, reportedly the Precision Cast deal came from Todd Combs - however WEB still wrote the check.  I'm like everyone else in the market asking what will happen post WEB/CM but that risk "is what it is" and believe the BOD has done everything they can to ensure the BRK will endure into perpetuity. 

 

And I will be reading the footnotes to see if Ajit/Gregg/Todd/Ted reimburse BRK for personal postage - if they do - then us shareholders have much to be thankful for.  The culture of BRK instilled by WEB/CM will have endured knowing nothing is free at BRK.

[Cardboard]

It is an interesting post Longterminvestor.

 

I think that you have put two arguments that clearly indicate that Berkshire post-Warren cannot be what it is today:

 

1- Such frugal mentality (of reimbursing postage for example) will not persist for long. A founder and a manager simply do not behave the same way or never have the same level of ownership. Some will continue for a while then it will drift.

 

2- "WEB advised on the risk and underwriters didn't price for it.  WEB thinks at such a high level it is scary."

While Ajit is good, he won't be there forever either. Moreover, WEB's investment brain, business acumen simply cannot be replicated, so it goes much further than insurance.

 

It will remain a very good business for quite a while but, the odds of something dumb or stupid happening will rise exponentially over time.

 

Cardboard

[Guest longinvestor]

The way Berkshire Hathaway of the future is being structured is to carve out smaller circles of competence. Abel and Jain are already fully aware of where their edges lie. They have not needed Buffett other than to nod. Todd and Ted arguably need  some more time to draw thicker lines. All that combined with meaningful buybacks will buy time of well over a decade to chart the future course, fortify the coc. Beyond that is anybody’s guess.

[SHDL]

I think Buffett once said during an interview or something that he met Steve Jobs at some point and that Jobs asked him what Apple should do with all the cash it now has but doesn’t really need.  Buffett replied by asking Jobs if he thinks AAPL is undervalued, and Jobs’ answer was “yes.”  Buffett’s advice was that, if so, Apple should buy back its stock.  Jobs didn’t do it. 

 

So you could say that Buffett did give advice to an outsider, at least on one occasion — and got ignored!

[nickenumbers]

After everyones thoughtful and interesting input I have run a Quantum Calculation on a NASA super computer and I have determined with a high level of precision that there is a:

 

• 93% likelihood that WEB/CM would- a. never receive the call, b. would not answer it if it were to happen, and c. if they were to be receive and answered the advise would not be given freely/without charge, AKA- "Go figure it out for yourself, that is what you are paid highly to do.  If it is too complicated/difficult for you, we will buy your problem from you at a price that we set."
   
  
• 7% chance of goodwill and free billion dollar advise given out Gratis
  

 

That is an interesting conclusion on capitalism also- the process is competitive and the outcomes can be [should be] absolute. 

[rb]

The other CEOs could just read the annual report it's pretty much all there.