Warren Buffett & Charlie Munger - Succession Announcement: Greg Abel & Ajit Jain Named Vice Chairmen

Greg Abel (55) named Vice Chairman running all non-insurance operations. Ajit Jain (66) named Vice Chairman running all insurance operations. Both named to board. Could have happened 5 years ago. Directors jumped at suggestion. Transition may last long or happen soon if needed.

No competition between them - know and like each other well. Each has complementary specialty. Roughly equal businesses: insurance has 100B+ float and 100B+ net worth. Directors know succession plan for tomorrow but not 4 years out. Will be one CEO who organizes as he wants.

Buffett in remarkably good health. Physical things slipped from low base but feels terrific. Loves job, can't wait to go to office. At office every Saturday in town. If any health issues would tell shareholders immediately. Running Berkshire exactly like 10 years ago. Made job one notch better.

US government like silent stockholder with 35% of earnings, now 21%. Shareholders went from 65% to 79% ownership - more than 20% earning power increase. 21% rate not baked in. Berkshire got $37B book value increase from deferred tax liabilities. As Berkshire rep would vote for it but would have had different bill personally.

Stocks not richly valued relative to interest rates. Not bubble territory. Interest rates act like gravity on valuations - 15% in 1982 pulled down all assets. Bond at 2% = 50x earnings that can't grow. Government wants 2% inflation so doesn't pay to save. S&P earning mid-teens - 15% bond vs 2.6% makes equities clear choice.

Buffett almost certain cryptocurrencies will come to bad ending. Would buy 5-year puts on every one but never short. Won't own, won't short, will never have position. Gets in enough trouble with things he knows - why bet on things he doesn't. Munger: appreciator of holding nose and going elsewhere. Buying because went up not good reason.

Charlie Munger turned 94, admits not many good years left but good at reality recognition. Estimates Warren has 7+ more good years. Greg and Ajit do some things better than Warren. Two most qualified people on earth for promotion. Three vice chairmen peculiar but Berkshire always looked peculiar.

Munger unabashed appreciator of Berkshire's tax reduction. More likely to vote for it than Warren. Points to India - poor nation with zero capital gains and dividend taxes. Economy may grow better being friendly to investors. People sure it won't work shouldn't be so sure. Hard to predict economic effects.

Munger sees bubbles in both bitcoin and venture capital. VC has too much money chasing deals. Always different bubbles and excesses at different times. 2000 could have burned $50B and gotten same results. Buying because went up not good reason. Markets have momentum that takes over during bubbles leading to bad endings.

National debt up 1000x since Buffett born, real GDP per capita up 6x. Who would have guessed 20 years zero real rates and printing money with low inflation. Economics not physics - formulas change. Can't make money listening to economists. Young Buffett said debt threatened future - was way off. Hard to be dogmatic in economics.