Long read: Tom Gayner: «Warren Buffett and Charlie Munger Laid Out the Playbook»

Berkshire remains Gaynor’s largest holding and here’s why he thinks Berskhire will continue to do well in a post-Buffett and Munger world:

“I think it can, and for many reasons. One of which is they have laid out the playbook about how you should run Berkshire. So Greg Abel, the next CEO, does not need to make this up from day one. The path has been set and that will be true for Greg’s team and those who follow them, for I think a generation or two to come.”

Emphasising on how great institutions outlasts their founders and go beyond key men:

When asked “Buffett said that Greg Abel will make decisions on how to allocate capital. Then we have Ted Weschler and Todd Combs. Will this be the team that makes the investment decisions?

You’ve named the senior people who will carry that responsibility at this point. And there are people that will assist them. Greg Abel will have the ultimate say. Now there’s a difference between making the capital allocation decisions and having the ultimate say. At Markel, with decisions up to a certain size and scale, typically our managers just tell the people they report to what they have been doing. Once it gets above a certain size and scale, they would want the person they report to to be on board with that and be a valuable council. It might be my job to say yes or no, but it would be an exaggeration to say that I made that capital allocation decision. My team and I together made that capital allocation decision. I think the same dynamic will exist at Berkshire.”

On Weschler and Combs’ contrasting styles and the importance of that in a team:

“I think you brought up a very good point about Ted’s style and ways of doing things. And about Todd being the opposite. It reminds me of my partner Mike Heaton, who is the COO of Markel. We complement each other very nicely. I do like to spend time with people, and Mike accuses me of falling in love with people and then being a little overenthusiastic. But I recognize that I have that problem. So when Mike tells me not to be so sure about something, I listen to him. What matters is that you have a team where different people have different roles that fit their strengths.”

He gives an insight into his investment philosophy as he discusses his holdings in Novo Nordisk and Brookfield, for which we strongly recommend reading the whole interview. What stands out is how often he is happy to acknowledge what he doesn’t know. He underpins that philosophy with a quote:

“It is a quote from my friend Chad Rowe, who was a great teacher to me. He passed recently. Chad said that investing is a business where you either look a lot smarter or dumber than you really are at any given point in time. And I think some of the great mistakes are made by people who think they’re smarter than they really are.”

And how does he deal with the unknown with the example of his Google shareholding:

“How do you deal with the risk that more people might leave Google Search and use ChatGPT for search instead?

By diversifying our investments. It’s a risk. We deal with it by admitting that we do not know, so we have other bets too.”