News Hour- Buffett: My successor is in the dark, too

Warren Buffett

REUTERS - Warren Buffett resisted pressure on Monday to identify his successor as chief executive officer of Berkshire Hathaway (BRKa.N), saying the person who has been chosen does not even know it himself.

In his annual investor letter on Saturday, Buffett said Berkshire's board had identified someone who will replace him as CEO when the 81-year-old investor eventually leaves the post.

But he did not identify that person in the letter, and in a CNBC interview on Monday, he rejected suggestions that he should. The public does not know who will be the next CEO of other major corporations, he said, and there is a disadvantage to having a "crown prince" in place.

"Well, we have four stocks that we have $45 billion invested in: American Express, Coca-Cola, Wells Fargo and IBM. Every one of those four companies ... has changed management since we bought our shares. I didn't have the faintest idea who the successor of management would be in any of those four, but we've put billions and billions of billions of dollars in there," Buffett said in an interview from the printing plant of the Omaha World-Herald, the hometown newspaper he bought late last year.

Buffett would say very little about the successor, other than that he is someone the board has had in mind for years and that the person does not know. He also said the heir apparent was likely to come from the ranks of dozens of chief executive officers at Berkshire operating companies.

One person not on the list, though, is David Sokol. Once one of Buffett's top lieutenants, and often assumed to be his heir apparent, Sokol left Berkshire last year amid a scandal over his stock trading while at the company.

The Sokol matter largely dropped from public attention in recent months, but Buffett said Monday that he assumed there is an ongoing investigation, as Berkshire has already paid more than $1.4 million in legal bills for Sokol.

Buffett added that securities regulators had not contacted him about the matter since last summer.

BUYING EUROPE

Buffett's comments on Saturday about succession helped to ease some shareholder concern about the future of the company. Buffett, who has been at the helm of Berkshire for 47 years, controls a conglomerate that employs more than 270,000 people worldwide in dozens of businesses ranging from railroads and electric utilities to ice cream and underwear.

In a wide-ranging interview, he also disclosed that he made one of his largest bets ever on Europe at the end of last year.

Buffett told CNBC he had put 175 million euros into each of eight European stocks at the end of last year, all companies that he said were undervalued and had clearly been affected by the sovereign debt crisis.

He did not identify the investments, though. His existing European investments run the gamut from retail to financial services.

A profoundly "buy American" investor, Buffett had just three European stocks among his 14 largest positions at the end of the year. Two of the three were in the red.

The only thing Buffett said he liked better than stocks was houses.

"It's a very attractive asset class right now," he said, adding he would be happy to buy thousands of houses and take out low-rate 30-year mortgages on them if there was an efficient way to manage such a portfolio.

Over the weekend Buffett made a point of emphasizing that housing was in a depression and that the U.S. economy would only really improve when the housing market did.

(Source- http://in.finance.yahoo.com)