The 'job of a lifetime' for Warren Buffett's son; Some thoughts on Apple, Google, and the new weight-loss drugs; A quick update on the latest in my mayoral campaign
1) I'll confess that I can often be less than objective when it comes to anything related to Berkshire Hathaway (BRK-B) CEO Warren Buffett...
As regular readers know, he has been my hero and mentor ever since my college buddy Bill Ackman gave me the best piece of investing advice I've ever received in 1996 (I still remember his exact words): "Go read everything Warren Buffett has ever written... and you can stop there."
Of course, I didn't stop there... But I've been to the past 26 Berkshire annual meetings, and Buffett has had more of an influence on my life than anyone other than my parents and the world's most patient and forgiving woman: my wife Susan (fun fact: my wife and my mother are both "Susan Tilson," though my mom goes by "Suzi").
So I greatly enjoyed this in-depth Wall Street Journal article about Buffett's son, Howie, who will become Berkshire's nonexecutive chairman when his father passes: Warren Buffett Prepares His Middle Child for the Job of a Lifetime. Though I have never met Howie, I've heard great things about him from many different people.
While both father and son acknowledge that Howie doesn't have traditional qualifications for a job at one of the world's largest companies, his job isn't to run the company but rather to maintain Berkshire's unique culture. As the WSJ article notes:
Just what is the culture that Howie Buffett is meant to protect? Berkshire is known for buying business and keeping them, giving managers latitude to operate, holding plenty of cash.
Howie Buffett defines it this way: "The culture is to keep things simple, to do what you need to do but don't do a lot of things you don't need to do, treat people fairly, respect your managers, respect your shareholders. Tell them the bad news upfront, be honest," he said. "It's not rocket science."
A lot of Berkshire shouldn't change, Howie Buffett says: The headquarters, for example, isn't going anywhere. ("It will never move from Omaha, Nebraska.") Berkshire should continue holding annual meetings at which the leadership takes questions at length from shareholders. ("One hundred percent, absolutely. I just hope I can do it and Greg [Abel] can do it for eight hours like he does.")
When asked detailed questions about Berkshire's future, Howie was noncommittal – as he should be, since I expect his father will still be running the company for at least a few more years:
Asked whether the company should consider paying a dividend, he laughed and said: "That's a trick question... There's no way that I can answer that question because I don't know."
On spinning off a subsidiary company, he said it would be hard to judge such an idea without knowing the circumstances. "It's not traditionally what Berkshire's done so there'd have to be a pretty good reason to do something different... It is part of the culture, you buy something and you keep it."
I continue to believe that Berkshire after Buffett will be in good hands with Greg Abel, Ajit Jain, and Howie.
2) Speaking of Buffett, businessman and WSJ columnist Andy Kessler cast some shade on his Berkshire's largest holding, Apple (AAPL), in his latest column: My Festering Questions for 2025. Excerpt:
Is something rotten at Apple? There is little growth. Earnings per share are basically flat since 2021 even with stock buybacks lowering share count. Estimates suggest iPhone unit sales are back where they were in 2015, while iPad unit sales have declined by almost half since 2013. The Apple Vision Pro augmented-reality headsets are a bust. Remember, growth stocks are highly valued on, well, growth.
Apple is also behind in artificial intelligence. Siri, like Amazon's Alexa, could have won the AI chatbot battle but is now a reminder of what could have been. A conversational Siri isn't expected until the spring of 2026. Every year, Google pays Apple around $20 billion to be the default search engine on iPhones, iPads and Macs. That could go away with the Justice Department's antitrust remedies for Google. Yet Apple stock is near record highs. Sure, many companies aren't trading on real-world fundamentals – I'm looking at you, Tesla – but they will.
Creative Planning's Charlie Bilello also raised questions about Apple's valuation in this chart that I included in Friday's e-mail:
I think Buffett agrees, which is why he has been aggressively selling down Berkshire's position in Apple (which I discussed in my November 4 e-mail).
3) Kessler also had a couple other observations in his column that I wanted to comment on...
I disagree with him about Google, and I continue to love the stock of its parent company Alphabet (GOOGL). Excerpt:
Is Google threatened? The good news is Google may save $20 billion a year in Apple payments. But Google's problems are more structural: AI search could easily eat into Google's almost $200 billion worldwide search revenue and its 90% market share. Softening the blow, Google does include verbiage from its own Gemini AI on top of its web search results. Still, this is a big change.
I still use Google exclusively for search and appreciate the AI results at the top. And Alphabet's other businesses like YouTube are booming.
On the other hand, I agree with Kessler 100% on the revolutionary new weight-loss drugs:
Will Ozempic pay for itself? GLP-1 drugs look to be the new aspirin. It's hard to find diseases they don't affect. So far, they've helped treat type 2 diabetes, obesity, stroke, heart attack, sleep apnea, kidney disease and substance addiction. And there are hints these drugs may reduce the risks of colorectal, pancreatic and endometrial cancer. Wow. In December, a preliminary Cornell College of Business paper reported that GLP-1-using households spend 6% less on groceries within six months, while spending on chips, sweet bakery goods and cookies dropped up to 11%. These drugs are still expensive, and saving on Pringles won't pay for them, not yet. But they'll surely change long-term healthcare spending.
Roughly 42% of adult Americans are obese (about 9% severely so) and another roughly 31% are overweight. This is a crisis that is severely impacting the health and quality of life of nearly three-fourths of Americans.
These new drugs are having impacts that are nothing short of miraculous. More than a dozen of my good friends are on them – one of whom has lost more than 100 pounds and is a new man.
As such, I believe the U.S. government should negotiate hard with the manufacturers to get the price down – and then make these drugs widely available to any American who is overweight. I think the up-front cost will be more than offset by long-term savings, and there's nothing that would more quickly improve the quality of life of tens of millions of Americans.
4) To wrap up today, I'll share a quick update from my personal life with my campaign for mayor of New York City – since many of my readers have been asking about it...
Today is the big public launch! As such, I have a new two-minute campaign video (you can see it here on social platform X)... and I did a 26-minute interview yesterday with CBS and a five-minute one this morning with CNN.
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.