Warren Buffett
Times up
The Oracle of Omaha should look to the future and step aside at Berkshire Hathaway
May 8th 2021 | words 799
AT 90, WARREN BUFFETT continues to lead Berkshire Hathaway, wearing the three hats of chief executive, chairman and chief investment officer. For years, the question of whom the feted investor would anoint as his successor to run the giant conglomerate has been the subject of boardroom gossip. The world now knows the answer, though only because of a slip of the tongue by Mr Buffetts 97-year-old right-hand man, Charlie Munger, at the annual shareholders meeting on May 1st. That forced Mr Buffett to confirm that his heir apparent as chief executive is Greg Abel, 58, a trusted lieutenant who runs Berkshires non-insurance businesses.
fte (also fete) / feit /
verb [VN]
[usually passive] (formal) to welcome, praise or entertain sb publicly
anoint / nint /
verb
~ sb / sth (with sth) to put oil or water on sb's head as part of a religious ceremony
():
The priest anointed her with oil.
a slip of the 'pen / 'tongue
a small mistake in sth that you write or say
:
Did I call you Richard? Sorry, Robert, just a slip of the tongue.
,,
The cack-handed way in which the succession plan became public fits a bigger pattern. Berkshire is a huge public company, with a stockmarket value of $645bn and an army of devoted retail investors. It is, though, structured and run in much the way it was when Mr Buffett took it over in the 1960s. He has never hidden his reluctance to retire. He once joked that hell step down five years after he dies. However, Berkshire needs to make changes if it is to keep up with the timesand that includes having a new person at the top.
cack-handed / kk hndid /
adj.
(BrE, informal, disapproving)
a cack-handed person often drops or breaks things or does things badly
SYN
clumsy
denigrate / denigreit /
verb [VN]
(formal) to criticize sb / sth unfairly; to say sb / sth does not have any value or is not important
SYN
belittle :
I didn't intend to denigrate her achievements.
denigration / denigrein / noun [U]
That is not to denigrate Mr Buffett or his achievements. In his 56 years in charge, Berkshires total returns have been double those of the S&P 500 index. He can claim to be the greatest value-investor who ever lived. He has instilled an admirable trust-based culture at Berkshire. The dozens of fawning books he has inspired constitute their own genre of business publishing.
instil (BrE) (NAmE instill) / instil /
verb (-ll-) [VN]
~ sth (in / into sb) to gradually make sb feel, think or behave in a particular way over a period of time
,():
to instil confidence / discipline / fear into sb
//
fawn / fn /
verb [V]
~ (on / over sb) (disapproving) to try to please sb by praising them or paying them too much attention
Idiom
fawn on/over sb
to praise someone in a way that is false in order to get something from them or to make them like you
The photographers were fawning over Princess Diana, trying to get her to pose for the cameras.
genre
noun
(formal)a particular type or style of literature, art, film or music that you can recognize because of its special features
(),
However, cracks have started to appear. One is Berkshires financial performance, which has been mediocre over the past decade. Mr Buffett has made some costly mistakes, such as bad bets on airlines and Kraft Heinz, a consumer-goods giant. He has admitted to overpaying for acquisitions, including a big metal-parts-maker that later wrote off $11bn. Were it not for a valuable stake in Apple, the bottom line would have looked limper still. Suspicion is growing that Mr Buffett has lost his magic touch in allocating capital, perhaps because, like other star fund managers, he is too big to outperform the market by much.
mediocre / midiuk(r); NAmE -oukr /
adj.
(disapproving)not very good; of only average standard
:
a mediocre musician / talent / performance
//
I thought the play was only mediocre.
write sth off
1. (business ) to cancel a debt; to recognize that sth is a failure, has no value, etc.
,():
to write off a debt / an investment
/
limp / limp / adj.
1. lacking strength or energy
:
His hand went limp and the knife clattered to the ground.
,
She felt limp and exhausted.
,
2. not stiff or firm
:
The hat had become limp and shapeless.
limply adv.:
Her hair hung limply over her forehead.
outperform / autpfm; NAmE -prfrm /
verb [VN]
to achieve better results than sb / sth
(),
outperformance noun [U]
Berkshires governance needs rethinking, too. For all the autonomy its divisions enjoy, Mr Buffett still has to sign off on the big decisions. He has special shares with greatly enhanced voting power. The board is stacked with Friends of Warren; five of its 14 members are 89 or over. Berkshires failure to write or disclose its policies on investor priorities such as climate risk and diversity irks some shareholders, including big institutions like BlackRock. When investors called Buffett-style governance unique they used to mean it as a compliment. No longer.
irk / k; NAmE rk /
verb
(formal or literary)to annoy or irritate sb
:
[VN]
Her flippant tone irked him.
The companys lousy disclosure looks out of step with the times, too. Berkshire offers little beyond mandatory filings and the occasional press release. It does not hold analyst meetings or investor days; it does not even have a functioning investor-relations department. The closest thing to outside scrutiny it tolerates is the three hours of friendly shareholders questions, teed up by a genial reporter from CNBC, at the annual conclave.
lousy / lauzi /
adj. (informal) 1. very bad
SYN awful , terrible :
What lousy weather!
She felt lousy (= ill).
2. [only before noun] used to show that you feel annoyed or insulted because you do not think that sth is worth very much
(),:
All she bought me was this lousy T-shirt.
T
3. ~ with sth / sb (NAmE) having too much of sth or too many people
():
This place is lousy with tourists in August.
,
in / out of 'step (with sb / sth)
1. putting your feet on the ground in the right / wrong way, according to the rhythm of the music or the people you are moving with
()()()()
2. having ideas that are the same as or different from other people's
()():
She was out of step with her colleagues.
Idiom
out of step (with something)
1.not having the same ideas or beliefs as a group you are part of.
The governor's remarks show she is seriously out of step with voters.
2.not aware of something.
Many parents are surprisingly out of step with the reality of drugs in their children's lives.
Usage notes: often used as a criticism:
My dad's clothing store, once successful, is now dismissed as old and out of step.
scrutiny / skrutni /
noun [U]
(formal) careful and thorough examination
SYN inspection :
Her argument doesn't really stand up to scrutiny.
Foreign policy has come under close scrutiny recently.
,
The documents should be available for public scrutiny.
,
tee / ti /
verb (teed, teed) tee sth'up | tee 'up
to prepare to hit a golf ball by placing it on a tee
()
[golfing jargon]
to get (something) ready, to prepare (something).
genial / dinil /
adj.
friendly and cheerful
SYN affable :
a genial person
a genial smile
geniality / dinilti / noun [U] :
an atmosphere of warmth and geniality
genially / dinili /
adv.:
to smile genially
conclave / kkleiv; NAmE k- /
noun
(formal)a meeting to discuss sth in private; the people at this meeting
The company needs to start dealing with these deficiencies now, or face the increased risk of a dramasuch as an attempt by activist investors to break up Berkshire, or a regulatory rumblewhen Mr Buffett does eventually leave. There is no need to stoop to the box-ticking corporate conformity that he so loathes, an aversion reflected in his public criticism of the metrics and questionnaires wielded by ESG campaigners.
deficiency / difinsi /
noun (pl. -ies) ~ (in / of sth)
1. [U, C] the state of not having, or not having enough of, sth that is essential
SYN shortage :
Vitamin deficiency in the diet can cause illness.
a deficiency of Vitamin B
B
2. [C] a fault or a weakness in sth / sb that makes it or them less successful
:
deficiencies in the computer system
box-ticking
the fact of doing something just because there is a rule that says that you must do it:
-A lot of what the care home inspectors do is simply box ticking .
-Risk assessments are an essential part of ensuring health and safety . They are not just a box-ticking exercise .
loath (also less frequent loth) / lu; NAmE lou /
adj.
~ to do sth (formal) not willing to do sth
:
He was loath to admit his mistake.
aversion / vn; NAmE vrn /
noun [C, U]
~ (to sb / sth) a strong feeling of not liking sb / sth
:
a strong aversion
He had an aversion to getting up early.
wield / wild /
verb [VN]
1. to have and use power, authority, etc.
,,,():
She wields enormous power within the party.
2. to hold sth, ready to use it as a weapon or tool
,,()
SYN brandish :
He was wielding a large knife.
Get the job done, Warren
New blood and greater openness would be a good start. Naming a successor is a first step. The next should be to replenish the board with outside appointments. Investors must get the information they need to make informed decisions, including analysis of where the firm is creating value, and the tax and other synergies that justify keeping the conglomerate intact.
replenish / ripleni /
verb [VN]
~ sth (with sth) (formal) to make sth full again by replacing what has been used
SYN top up :
to replenish food and water supplies
Allow me to replenish your glass.
replenishment noun [U]
synergy / sindi; NAmE -rdi /
noun [U, C]
(pl. -ies) (technical ) the extra energy, power, success, etc. that is achieved by ten or more people or companies working together, instead of on their own
,()
intact / intkt /
adj. [not usually before noun]
complete and not damaged
SYN undamaged :
Most of the house remains intact even after two hundred years.
,
He emerged from the trial with his reputation intact.
,
The biggest question of all is when Mr Buffett should go. He may want to die at his desk, but the longer he stays, the more he risks becoming a liability. He said at this years AGM that bad leaders are the biggest risk companies face. Good leaders who stay too long are not far behind. Mr Buffett has had a wonderful run. But now that the succession is out in the open, it is time to move aside and let Mr Abel fix what isnt working.
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