BERKSHIRE TOO BIG?
Asked by invited "bear" Doug Kass if Berkshire has been paying too much for companies, growing too large, and becoming too much like an index fund that would be good for "widows and orphans," Buffett replied that Berkshire is buying good businesses while remaining disciplined about price.
"In terms of acquisitions we've made in the last five years, we think we've done pretty well."
Still, he conceded, "size does matter," and as the company has grown bigger there's "no question we can't do as well as in the past." He later added that he's convinced breaking Berkshire into smaller parts would produce poorer results.
Munger added that even though Berkshire has become very big, "We think we are going to do a bit better than the giants of the past" because "we have a better system."
Buffett joked that Kass hadn't convinced him to sell his Berkshire shares yet.
Later in the session, Kass asked why Berkshire had designated Warren Buffett's oldest son, Howard, to eventually become non-executive chairman aside from an "accident of birth," since he has no experience running a company or making investments.
Buffett replied that Howard wouldn't be actively running Berkshire, but would be there to safeguard the company's culture in the very unlikely event a "mistake" is made choosing the new CEO. "I know of nobody that will feel that responsibility more in terms of doing that job than my son Howard."