Tuesday, March 06, 2007
Warren Buffett's Replacement
Still wondering how Warren Buffett's going to pick his replacement at Berkshire Hathaway?
Despite this headline from TheStreet.com (Stockpickr: Seeking Buffett's Apprentice), he's probably not going to pull a Donald Trump by getting a bunch of photogenic twentysomethings to compete on challenges, with the winners sleeping on Buffett's couch and the losing team sleeping in the parking lot at Gorat's.
But maybe he should.
Personally, I think Buffett should aim even younger. No way the #2 billionaire in the world doesn't have a team of doctors making giving him at least another 20 to 25 years left to live. That's just about enough time to turn a street urchin into a world-class investor. He could put "golden tickets" inside of chocolate bar wrappers to find a random sample of youngsters, and then take the finalists inside of the Berkshire Hathaway factory. In turn, all but one of the children would be eliminated from consideration, say, by suggesting that executive compensation should be tied to company performance instead of personal performance, which would cause a bunch of Geico lizards to break into song. The last kid standing will get a full education in the Graham and Dodd school of value investing and eventually run the business when Buffett flies off in his great glass elevator.
That's the way I see it happening.
Despite this headline from TheStreet.com (Stockpickr: Seeking Buffett's Apprentice), he's probably not going to pull a Donald Trump by getting a bunch of photogenic twentysomethings to compete on challenges, with the winners sleeping on Buffett's couch and the losing team sleeping in the parking lot at Gorat's.
But maybe he should.
Personally, I think Buffett should aim even younger. No way the #2 billionaire in the world doesn't have a team of doctors making giving him at least another 20 to 25 years left to live. That's just about enough time to turn a street urchin into a world-class investor. He could put "golden tickets" inside of chocolate bar wrappers to find a random sample of youngsters, and then take the finalists inside of the Berkshire Hathaway factory. In turn, all but one of the children would be eliminated from consideration, say, by suggesting that executive compensation should be tied to company performance instead of personal performance, which would cause a bunch of Geico lizards to break into song. The last kid standing will get a full education in the Graham and Dodd school of value investing and eventually run the business when Buffett flies off in his great glass elevator.
That's the way I see it happening.
Labels: finance, insurance, wall street
Monday, March 05, 2007
From Boom to Bust to Boom
Here's a nice pairing of articles from the New York Times. The first is about the collapse of the latest boom market, and another about the start of what might be the next boom market.
Just as the technology boom of the late 1990s turned twenty-something programmers into dot-com billionaires, and leveraged buyouts a decade earlier turned Wall Street bankers into Masters of the Universe, the explosive growth in subprime lending turned mortgage bankers and brokers into multimillionaires seemingly overnight.Party's over. Where's the next one? How about insuring coastal areas?
...
Weakening home prices and rising default rates have rocked the subprime business.
As most big insurers are cutting back coverage in Florida and other coastal states after a string of catastrophic hurricanes, Mr. Buchmueller has started a company offering policies that hardly anyone else wants to sell — and at as little as half the going rates.Buchmueller only insures homes worth over $1 million, cherry-picking homes in the market that should hold up better in a storm. Shouldn't be long before others follow the lead.
...[And] recent start-ups have been structured to yield high profits as quickly as possible.
Labels: finance, insurance, mortgage, wall street
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