Growing Up Buffett (Ep. 32)
Who will succeed Warren Buffett as CEO of Berkshire Hathaway?
That’s still up in the air, but we can tell you the two people who won’t be running Berkshire:
2. Peter Buffett, Warren’s son.
Peter Buffett, at 53, is the youngest of three Buffett kids, and he’s the star of our latest Freakonomics Radio podcast, “Growing Up Buffett.” (you can download/subscribe at iTunes, get the RSS feed, listen live via on the media player at the top, or read the transcript here) He’s a musician, author, and philanthropist, and we spoke to him for an upcoming hour-long radio program called “The Church of Scionology.” It’s about family business, and takes a hard look at what happens when the scion of a family takes over upon the founder’s departure. We mine the academic literature on the topic and talk to people around the world about the ins and outs of family business.
There’s no such scioniology happening in the Buffett family, however, and Peter talks candidly (and interestingly) about how he and his brother and sister (all of whom are at least part-time philanthropists) gradually figured out what their father was all about, and then considered whether the family business was right for them. Excerpts from the podcast:
DUBNER: Talk to me for a minute about your degree of interest in Berkshire growing up.
BUFFETT: Well, you know, growing up we really didn’t know what my dad did. It was quite mysterious. He read a lot, which he still does. And I will say if you walk in the house today you will see the same thing that I saw in 1965. He’s just this consistent human being in spades. It was incredible. But we didn’t know what he did. In fact, when my sister filled out a form, I think in fourth or fifth grade, about what our parents did, she put “security analysis,” and it was assumed that what he did was check alarm systems. So to a kid it was like “what do all the numbers on the page mean? And what exactly is the New York Stock Exchange and buying and selling and all that?” So we really didn’t know.
DUBNER: Now, at some point you figured it out. I’m guessing that may have been gradual. Tell me about that.
BUFFETT: It was very gradual. People will ask me “what was it like growing up in this household?” “When did you realize that your father had amassed all this wealth?” And the answer is that I was probably about 25.
Peter Buffett did briefly entertain following his father into the investing world but decided he was more interested in music. His father, he says, supported this decision and never pressured Peter or his siblings to do something they weren’t passionate about.
BUFFETT: Well, you know, my dad talks about the “ovarian lottery.” This idea that you’re, you know, born into these circumstances that you can’t, at least as far as I’m concerned, you can’t control when you’re on the other side of being born. And so I think there’s a version of that that holds true in this. You know, the odds of having a son or daughter that are as passionate, and excited and driven as the founder of a business was, or even the person that took it over—whatever that might be, whatever passion and drive was there in that person—the odds of that being in the next generation, I think are incredibly small. But I think that if the child is truly passionate about it and lives and breathes the same thing, absolutely. But again, what are the odds?
I have to say, it’s nice to hear a grown man talk so admiringly about his father. FWIW, here’s Peter (on piano), Warren (on ukulele), and Akon (on beats) working through “Ain’t She Sweet.”