Warren Buffett may have some contenders for his title, the "Oracle of Omaha"-and they may be within his own ranks. Todd Combs and Ted Weschler have been Berkshire Hathaway's (BRK.B) top pickers the past year, and Buffett's reasoning in putting the two men in such prominent positions is now becoming evident as their results are tallied: The pair beat Buffett's flagship holding company by 30 percent. A closer look at the two newcomers gives investors an inside look at Buffett's thinking as he builds his company for the coming years.
Like Buffett himself, Todd Coombs is not flashy. He's more comfortable spending a Sunday afternoon at the office in shorts and golf shirt, ferreting out the quality value investments that have made his reputation in the industry. A shrewd eye for avoiding stocks with downside risk, Coombs has been able to distinguish himself as strong candidate for the mantle of top investor in Buffet's company, Berkshire Hathaway (BRK.A).
In Ted Weschler, Buffett seems to have chosen a set of qualities reminiscent of himself at an earlier age. Weschler is unassuming but confident, with a profound understanding of the principles of value investing. Like Buffett, Weschler made a considerable amount of money for his own company, Peninsula Capital Advisors, keeping his company far from the Wall Street hustle. The two men have similar, cautious investment styles and eye for the long-term gains that have made Weschler so successful in his new role at Berkshire Hathaway.
Continued Excellence in 2014
As evidence of his full confidence in his new protégés, Buffet gave both Coombs and Weschler a $4 billion portion of Berkshire's assets to invest. The pair did not only match stockholders' expectations but were able to exceed them by almost a third-leading many firms to wonder if Buffett's choosing these men gives his company a contemporary edge on stock choices. Investors should note this decision could indicate a shrewd positioning for the turnover of his company soon.
What Should Investors Do With Berkshire Hathaway?
We believe Berkshire Hathaway will continue to be a great stock to own in 2014 and it remains a good choice as a core holding for growth portfolios.
Warren Buffett is clearly planning for the future for his shareholders by developing these great portfolio managers.