Buffett admits to ‘some dumb things,’ hints at Indian heir

Berkshire Hathaway Records Worst Year In Its History; The Sage Of Omaha Says Economy Will Continue To Be In 'Shambles' In 2009

THIS could shake world business confidence more than a dozen corporate collapses or economic warnings. Warren Buffett's Berkshire Hathaway has recorded the worst year in its 44-year-old history, as the Sage of Omaha, in his globally anticipated annual letter, admitted he did 'some dumb things' in 2008. He also showered praise on his reinsurance head Ajit Jain, sparking off speculation that the Delhi-born IIT alumnus is reaching pole position to succeed the 78-year-old Mr Buffett. Mr Buffett has long said he has a succession plan in place, with three or four contenders, but has consistently refused to name one.
    "Ajit came to Berkshire in 1986. Very quickly, I realised that we had acquired an extraordinary talent. So I did the logical thing: I wrote his parents in New Delhi and asked if they had another one like him at home. Of course, I knew the answer before writing. There isn't anyone like Ajit," Mr Buffett said in his letter, commenting on the reinsurance business Mr Jain heads.
    Mr Jain and his 31-member team are also in charge of the newlyformed Berkshire Hathaway Assurance Company, set up early last year to insure state and municipal bond issues. Mr Buffett has consistently and openly praised Ajit Jain in his annual letter through the years.
    Berkshire Hathaway's net income for 2008 fell by 59% to $4.99 billion, and revenue fell by 8.8% to $118.2 billion. Among the mistakes Mr Buffett owned up to for the performance included a highly-priced investment in oil producer ConocoPhilips, and two Irish banks he did not name. Book value per share, the measure Berkshire uses, fell by 9.6% to $11.5 billion as Berkshire shares took a tumble.
    Mr Buffett also warned that the economy would continue to be in 'shambles' for the larger part of 2009, and even beyond, though he remained robustly optimistic about the future of America's economy. However, the Oracle of Investment disappointed investors and analysts around the world, as he did not give enough of his pithy and clear predictions about the near economic future. He weighed in on the side of government intervention, saying that otherwise the impact would have been 'cataclysmic'. He has said he will use the recession to shop for discount investments.
    sudeshna.sen@timesgroup.com 

THE SUCCESSOR? AJIT JAIN