Wednesday, April 1, 2015

Berkshire Hathaway: Who Should Replace Warren Buffett?

This article was first published by Seeking Alpha on March 2, 2015.

By Sarfaraz A. Khan

Warren Buffett, one of the world's greatest investors who built Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) from nothing into one of the world's biggest conglomerates with more than 80 businesses and a $117 billion stock portfolio has recently released his highly anticipated letter to the shareholders along with his company's fourth quarter results.

In the letter, which marks Buffett's 50-years at the helm, the Oracle of Omaha laid out the company's plans for the future. Buffett continues to look for acquisition opportunities, which have been one of the key driving engines for Berkshire Hathaway. Last year, Berkshire Hathaway spent nearly $8 billion on making 31 acquisitions. But the company hasn't purchased an "elephant" since 2013 when it acquired half of H.J. Heinz (NYSE:HNZ) for $12.25 billion. With more than $63 billion of cash reserves, Berkshire Hathaway has ample resources to make another major acquisition while maintaining significant cash cushion.

As always, Buffett's focus will be on investing in American companies, despite showing greater interest abroad, particularly in Germany where Buffett has recently agreed to acquire a motorcycle equipment retailer for $452 million and has shown his interest in buying more German companies in the future.

Buffett also said that Berkshire Hathaway is now a "sprawling conglomerate, constantly trying to sprawl further." Those investors who purchased a single Berkshire Hathaway share about five decades ago at $11 and kept it would have seen phenomenal returns, with a single share priced at $221,180 when the markets closed on Friday. However, the next fifty years ….. read full articleat Seeking Alpha.