1998: Who is the next Warren Buffett?

AUDIENCE MEMBER: Hi. I’m Allan Maxwell. I live in the wonderful tropical island of O-maha. (Laughter)

WARREN BUFFETT: That’s right up there with Aksarben. That’s Nebraska spelled backwards. (Laughter)

AUDIENCE MEMBER: Everybody in this room’s got to be wondering the same question. Who, in your opinion, both of you, is the next Warren Buffett?

WARREN BUFFETT: Charlie? Who’s the next Charlie Munger? Well, let’s try that first. That’s a more difficult question. (Laughter)

CHARLIE MUNGER: There’s not much demand. (Laughter)

I don’t think there’s only one way to succeed in life, and our successors, in due time, may be different in many ways. And they may do better.

WARREN BUFFETT: Incidentally, we have a number of people in the company, some of whom are in this room today, and the ones you saw on that screen, who are leagues ahead of Charlie and me in various kinds of abilities.

I mean a lot of different talents. We’ve got a fellow in this room today who’s the best bridge player, probably, in the world. And Charlie and I could work night and day, and if he spent ten minutes a week working on it, he’d play better bridge than we would.

And there are all kinds of intellectual endeavors that, for some reason or another, one person’s a little bit better wired for than someone else.

And we have people running our businesses that if Charlie and I were put in charge of those businesses, we couldn’t do remotely as well as they do.

So there’s a lot of different talents. The two that we’re responsible for is, we have to be able to keep able people, who are already rich, motivated to keep working at things where they don’t need to do it for financial reasons. I mean it’s that simple.

And that’s a problem any of you could think about, and you’d probably be quite good at it if you gave it a little thought, because you’d figure out what would cause you to work if you were already rich and didn’t need the job. Why would you jump out of bed and be excited about going to work that day? And then we try to apply that to the people who work with us.

Secondly, we have to allocate capital. And these days we have to allocate a lot more capital than we had to allocate a decade ago.

That job is very tough at present. Sometimes it’s very easy. And it will be easy at times in the future and it’ll be difficult at times in the future. But there are other people that can allocate capital, and we have them in the company.

Charlie, you have any —?

CHARLIE MUNGER: No.