1 Thing I wish Warren Buffett had said

What didn’t Buffett say?

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During the multi-hour question-and-answer session during the Berkshire Hathaway  (NYSE:BRK-A) (NYSE: BRK-B) annual meeting, there was plenty that Warren Buffett and his partner-in-crime Charlie Munger said. But what didn’t Buffett say?

To find out, I rounded up the group of Fools who attended the Berkshire meeting this year and asked them exactly that. So, Fools, what do you wish Warren had said?

John Divine: Every Berkshire investor with a head on their shoulders wishes, to one extent or another, that Buffett had given some idea about who his successor will be. Inevitably, the issue came up — that tends to happen when a legendary octogenarian is the active CEO of the fifth-largest publicly traded company on the globe. The Oracle himself even acknowledged that it was the No. 1 issue facing the company.

But not only did Buffett refuse to name his future replacement, he teased the crowd about it! He had virtually every one of the more than 30,000 attendees wishing they were one of the lucky 13 on the board of directors, who, Buffett nonchalantly informed them, all knew and agreed on exactly who the next head should be.

Asked whether the next CEO would be Berkshire’s in-house insurance savant Ajit Jain, Buffett coyly replied that he wouldn’t start guessing with the As. He didn’t know if the Bs would be such a great place to start either, he said. This, of course, caused investors to rack their brains for the remainder of the meeting in an alphabetical fit of anxiety.

Scott Phillips: Warren Buffett is very generous with his time. When you’re worth more than US$50 billion, you’re entitled to live life your own way. Yet Buffett appears regularly on CNBC and takes questions from shareholders, journalists, and analysts at the Berkshire Hathaway annual meeting for almost six hours every year.

But despite the 50% stake in a joint venture to buy H. J. Heinz (NYSE: HNZ), which was announced recently, Berkshire’s cash pile is building up again. I was hoping to hear Buffett say, “We’ve just bagged another “elephant.”

He’s used the hunting metaphor previously to suggest Berkshire needs to purchase very large companies these days to put its money to work. Particularly in the wake of the Heinz deal, and the suggestion that Buffett overpaid, the next big deal will allow investors to see if there’s a trend.

It’s clear that Berkshire isn’t getting the cut-price deals of its early years under Buffett’s control, but Buffett and Charlie Munger insist that Heinz fits the “great company at a fair price” mantra. The next deal will either reinforce or undermine that assertion — and if there’s a trend toward lower returns, investors may start to worry.

Brendan Mathews: Warren Buffett has claimed that he could make 50% per year if he was running US$1 million.

During the annual meeting, a shareholder asked him, if that was the case, where would he focus his efforts. Warren replied with a very vague response. He said he’d focus on “small things, small discrepancies, certain situations…” And that’s about all he said.

Naturally, this disappointed me, as I have less than US$1 million in my personal account, and I’d certainly like to earn 50%. It would’ve been outstanding if Warren had provided just a little more direction beyond smaller investments. Is he suggesting unlisted stocks, micro-cap turnarounds, spinoffs, demutualisations, net-nets, deep value, or something else entirely?

I don’t need a detailed map to El Dorado, but a few clues or suggestions would’ve been great. And, aside from the potential financial value of more specific advice, it would’ve been very interesting. Warren is a master investor, and to me, it’s the most fun to hear his insights on investing. It’s not that I don’t enjoy him talking about quantitative easing, taxes, gender equality, etc., but it would’ve been great to get to talk about investing in more depth and in more specific terms.

Michael Olsen, CFA: Though I found designated bear Doug Kass’ request for a US$100 million short portfolio funded by Berkshire capital neither particularly insightful or useful, his question on breaking up Berkshire was spot on. In short, he asked whether Buffett — as Henry Singleton at Teledyne — would split Berkshire into several operating companies when he passed the baton. In as many words, Buffett said “no.”

Here’s what I wish Buffett said: “We, or my successor, are willing to consider it.” Not that it’s necessary, good, or it should happen. But that, as a matter of capital allocation, open-mindedness, and maximising shareholder value, they’d consider the possibility. Berkshire is a truly extraordinary, oxymoronic entity — the smoothly functioning, decentralised conglomerate. In the scope of organisational and business history, these occurrences are rare. Likewise, one might argue that right now, Berkshire does not suffer the oft-cited conglomerate discount, on account of Buffett’s investor cache.

But whenever his successor(s) take(s) the reins, neither of the above are certain. Management might be less fluid. Returns may suffer. And to the extent the market takes a skeptical view, a conglomerate discount may arise. To reiterate: I’m not saying that I think a spinoff is necessarily the right decision, I am saying it warrants contemplation.

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A version of this article, written by Matt Koppenheffer, originally appeared on fool.com.

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