At Berkshire Hathaway’s annual meeting Saturday, Warren Buffett went into a bit more detail on how he plans to pick the person who will run Berkshire’s money when he’s gone. From the FT:
Speaking to 27,000 investors gathered in his native Omaha for Berkshire’s annual meeting on Saturday, the world’s second-richest man said he had received more than 600 applications since beginning the search for a chief investment officer in February.
“We are looking for one or more. I don’t think it’s impossible we could find three or four and . . . give them a chunk of money – $2bn, $3bn, $5bn – and have them manage it for some time,” he said in a six-hour session of questions and answers.
I’m curious as to just how long Buffett is planning to let this bake-off go on. Investing results over a six-month or one-year timespan are more or less meaningless–there’s just too much noise in the movements of the stock market to tell if they represent skill or luck. You could try to sift out some of that noise with risk-adjusted measures like alpha or the Sharpe ratio, but Buffett tends to think that kind of stuff is nonsense.
So his candidates would presumably have to manage their portfolios for years on end before Buffett could make an informed judgment as to who is best. Which makes me wonder who would be willing to put themselves through that for merely a shot at the top job. Oh, you would? Never mind.