Warren Buffett, the 80-year-old billionaire investor and chairman and CEO of Berkshire Hathaway, who is on his maiden visit to India, spoke on a host of issues from investing in India to his succession plan. Excerpts:
What attracts you to India? Is it the size of the market?
This is a place where the market is growing, getting more prosperous by the day, where businesses are flourishing. This is a dream market. The number of people, the buying power that they are gaining, the ability to produce things is getting better every day... everything is getting better everyday.
What was holding you back all this while?
You have to find the right thing. Usually the businesses we would like to buy are not for sale.
Former RBI governor YV Reddy said we should not blindly believe in the efficiency of global financial market because it does not exist. Do you agree?
Yes, I agree with that. But that does not mean that I don't believe in the markets and follow market signals. Markets can get very inefficient, and capitalism and markets lead to excess, particularly if borrowed money is available. When people have very favourable experience in the markets, they tend to do things that eventually becomes stupid. Somebody said that there are the innovators, the imitators and then idiots. Sometimes they follow in that progression.
What would your advice be to Indian family-owned businesses?
There is nothing better than a family business when it works and there's nothing worse than a family business that doesn't work. When the family is producing talent in the next generation, where they work in harmony, it is wonderful. There is nothing like a family pulling together in that respect. On the other hand, sometimes the next generation does not have the same abilities. It is tough sometimes for people to recognise this. We are involved with some businesses where they are in the fourth generation, and they are wonderful businesses. I have seen other businesses fall apart when they get handed to the next generation. So, there is no 'one size fits all' answer.
What would your advice be to Indian family-owned businesses?
There is nothing better than a family business when it works and there's nothing worse than a family business that doesn't work. When the family is producing talent in the next generation, where they work in harmony, it is wonderful. There is nothing like a family pulling together in that respect. On the other hand, sometimes the next generation does not have the same abilities. It is tough sometimes for people to recognise this. We are involved with some businesses where they are in the fourth generation, and they are wonderful businesses. I have seen other businesses fall apart when they get handed to the next generation. So, there is no 'one size fits all' answer.
You are 80, you still tap-dance your way to work every morning, you have no plans to retire at this point of time. Don't you think a succession plan, clearly articulated to all your investors, would make them feel a lot more comfortable?
Well, we do have a succession plan. If something happens…if I died at night, the board of directors has somebody.
God forbid....
No no, it's going to happen some night and the next morning they know who will be in charge. Now, that may change five years from now because of age, or because somebody new joins us. So, it would not make sense to name that person today. It may be that three times out of four that person might leave us - or they might get sick themselves, who knows? So we have a clear succession plan at Berkshire Hathaway. We've just not announced the successor.