Matthews said insurance is clearly still the riskiest part of Berkshire's business, so Buffett, and whoever follows him, must understand it.
"If you do a bad job at the railroad, your earnings might get hurt, but the railroad is not going away. If you do a bad job in insurance, your whole company can go away," Matthews said.
Berkshire plans to split Buffett's job into three parts once he is gone. The next CEO will run Berkshire, but two other men hired by Buffett in recent years will oversee investment. Buffett wants his eldest son to succeed him as chairman.
As a result of the shift in Berkshire's business mix, the company's earnings should become less volatile over time, and it will increasingly be driven by the results of its operating companies, like Iscar tools and Acme brick.
But who knows how the mix of companies might change if Buffett finds a way to use the roughly $41 billion cash Berkshire has on hand for another big acquisition.
"At any moment, he could buy some other insurance thing and that could look big again," Kilpatrick said.
Besides insurance and manufacturing, Berkshire's subsidiaries include clothing, furniture, ice cream, private jet and jewelry companies. It also has major investments in such companies as Coca-Cola Co., IBM and Wells Fargo & Co.
Berkshire Hathaway Inc.: www.berkshirehathaway.com
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