Charlie Named Name

Ned Isakoff: “You got me

blacklisted from Hop Sing’s?”

Delivery Man: “She named name!”

—Seinfeld,

“The Race”

Like Elaine Benes in that Seinfeld episode,

Charlie Munger named name.

Two names, in fact: Greg Abel and Ajit Jain.

Unlike Elaine Benes’s name-naming, however, the two

named by Munger have nothing to do with Communist agitation and the destruction

of capitalism as we know it—far from it.

Rather, they have everything to do with

Capitalist orthodoxy in its purest, most meritocratic form: who might succeed

Warren Buffett as CEO of Berkshire Hathaway under the scenario, as Munger puts

it, “Buffett left tomorrow.”

Here’s the direct quote from Munger’s comments

written for the 2014 Chairman’s Letter that hit Berkshire Hathaway’s web site

this morning (2015 being the 50th anniversary of Buffett’s takeover

of the company, both men wrote individual retrospectives on the last 50 years

and what the next 50 years might bring):

But, under this Buffett-soon-leaves

assumption, his successors would not be “of only moderate ability.” For instance, Ajit Jain and Greg Abel are

proven performers who would probably be under-described as “world-class.” “World-leading” would be the description I

would choose. In some important ways,

each is a better business executive than Buffett…

While Munger’s naming of names does not carry

the same penalty as in the Seinfeld episode—neither man will be banned from

ordering takeout at Hop Sing’s—it does carry far greater ramifications, because

the moment Munger’s comments appeared on Berkshire Hathaway’s web site this

morning, both men’s lives changed forever, for obvious reasons that we won’t

enumerate, since everybody else will be doing that starting, oh, now.

Instead, we encourage a careful reading of the

full Berkshire letter—including both Buffett and Munger’s insightful commentary

on what made Berkshire what it has become and where it might go—here.

Fortunately, our book on the topic of Munger’s

name-naming—“Warren Buffett’s Successor: Who it Is and Why it Matters,” (eBookson Investing, 2013)—was published well before Munger actually chose to name names, but

we don’t have to change a word of it.

Jeff

Matthews 

Author “Warren

Buffett’s Successor: Who it Is and Why it Matters””

(eBooks

on Investing, 2014) Available now at Amazon.com

The content contained in this blog represents only

the opinions of Mr. Matthews.  Mr.

Matthews also acts as an advisor and clients advised by Mr. Matthews may hold

either long or short positions in securities of various companies discussed in

the blog based upon Mr. Matthews’ recommendations. This commentary in no way

constitutes investment advice, and should never be relied on in making an

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