Warren Buffett plans for the future … and it doesn't involve bitcoin

Warren Buffett plans for the future … and it doesn't involve bitcoin

Famous billionaire investor Warren Buffett has told the world he would never invest in bitcoin or other cryptocurrencies.

Updated about 2 hours ago

"We'll never have a position in them," Mr Buffett, 87, said in an interview with CNBC.

Warren Buffett /CNBC.com

"I can say almost with certainty that cryptocurrencies will come to a bad end."

These remarks from the "Oracle of Omaha" came as he announced the appointment of two potential successors who may eventually replace him as CEO and chairman of Berkshire Hathaway.

Bitcoin's spectacular rise has created a divide on Wall Street about whether or not it is a legitimate financial instrument.

Since hitting its record price of $US19,343 ($24,655) in mid-December, bitcoin has fallen by more than 25 per cent.

It was trading at $US14,456 ($18,429) at 10:15am (AEDT), according to Coindesk.

Mr Buffet's views came a day after Kodak announced it would launch its own cryptocurrency KODAKCoin, which more than doubled the company's languishing share price.

Also on Wednesday, JPMorgan CEO Jamie Dimon, in an interview with Fox, backtracked from his earlier comments that bitcoin is a "fraud".

"I regret making them," Mr Dimon said.

But the high-profile investment banker said he still would not be interested in the cryptocurrency.

Bitcoin Price Weekly Analysis BTC USD/NewsBTC

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New blood in the company

Aside from restating his scepticism of cryptocurrencies, Mr Buffett appointed two new vice-chairmen to Berkshire Hathaway.

They are Gregory Abel (currently the chief executive of Berkshire Hathaway Energy) and Ajit Jain (Berkshire's reinsurance chief).

Mr Buffett said he was in "remarkably good health", and the move was not due to any looming concerns.

After that announcement, Berkshire's class A shares rose 1.3 per cent to $US308,350.

Its class 'B' shares rose 1.3 per cent, to $US205.61.

For years, Mr Buffett has said Berkshire had identified several internal CEO candidates who could replace him, but had refused to name them.

This move makes the succession plan clear for investors, said Andy Kilpatrick, who has followed Berkshire for years while writing and updating his book "Of Permanent Value: The Story of Warren Buffett".

"Now if something happens, they're right there," he said.

Mr Abel, who leads Berkshire Hathaway's utility unit, will now oversee all of the conglomerate's non-insurance business operations.

As for Mr Jain, he will oversee all of Berkshire's insurance operations, and currently serves as executive vice president of National Indemnity Co.

Buffett shot down the idea that Abel and Jain would share the CEO post once he was no longer running the company, saying there would only be one person in the position — but not saying who it would potentially be.

Berkshire owns more than 90 different companies in a variety of industries, including electric utilities, retail jewellers and insurance.

The conglomerate also holds major investments in companies such as Coca-Cola, Wells Fargo, American Express and Apple.

The company is extremely decentralised, with the subsidiaries largely running themselves on a daily basis.

Mr Buffett's primary role as CEO is to decide where to invest Berkshire's cash — either in its own companies, acquisitions or outside investments — and manage the executives who lead the subsidiaries.

Berkshire has grown to employ roughly 370,000 people, but only 25 of those work at the conglomerate's headquarters in Omaha, Nebraska.

AP/Reuters

http://www.abc.net.au/news/2018-01-11/warren-buffett-plans-for-the-future...and-it-doesn27t-involve-b/9319810

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