Over the past decade, Warren Buffett has been slowly taking a step back from his responsibilities at his company Berkshire Hathaway (BRK-A, BRK-B). Specifically, he hired two younger money managers, Todd Combs in 2010 and Ted Weschler in 2011, to eventually run Berkshire’s massive investment portfolio.
On Thursday, Buffett told CNBC that Berkshire had amassed a new position in Amazon (AMZN). And, he attributed the purchase to “one of the fellows in the office that manage money.” In other words, the decision was made by Combs or Weschler.
“I was surprised,” Smead Capital CEO Bill Smead said on Yahoo Finance’s The Final Round. “They've been a little more aggressive and a little bit more tech-oriented than Warren has.”
“I'm a shareholder. I deserve to know that.”
Buffett and his two deputies once made it a point to not discuss who’s responsible for specific bets made with Berkshire’s portfolio. And the two have generally stayed out of the spotlight. Now, we’re hearing more about their bets, but we still don’t see them in public much.
“He has not allowed his stockpickers to communicate with us,” Smead said. “I'm a shareholder. I deserve to know that.”
The market value of Berkshire’s investment portfolio was $172.5 billion as of the end of 2018, and the influence of Combs and Weschler has been felt. They’ve been credited with introducing Apple (AAPL) into the portfolio in 2016. As of the end of 2018, Apple was by far the largest holding in the portfolio, worth over $40.2 billion.
To be clear, Smead isn’t a Buffett-hater.
“Warren Buffett has been a generous teacher,” he said. “Without ever meeting him in person, he's a wonderful friend. He's taught me an immense amount about what I do, about our discipline.”
That said, Smead has lots of concerns.
“They own 21% of the DaVita Corporation (DVA),” he said. “Politicians are threatening to move everyone to Medicare. And 70% of their business in dialysis is Medicare already, but it's the lowest margin business they have. I want to hear from them what they want to do with their DaVita, and why they want to do it, because I'm a shareholder. I deserve to know that.”
Smead is confident that a shareholder will raise this question on Saturday during Berkshire Hathaway’s annual meeting.
[Click here for coverage of the 2019 Berkshire Hathaway Shareholders Meeting.]
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Sam Ro is managing editor at Yahoo Finance. Follow him on Twitter: @SamRo
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