It will be nothing like its present form after Buffett dies.

(Reuters) Berkshire Hathaway has a lot of equity: its book value is about $125 billion. And since equity is forever, it makes sense for Berkshire to have a very long time horizon when it comes to buying assets. But still:

Berkshire Hathaway Inc.'s Warren Buffett, who agreed to buy Burlington Northern Santa Fe Corp. in his biggest takeover, said the railroad's results in the next 100 years will justify a $26 billion bid that's "not a bargain."

"It's a good asset for Berkshire to own over the next century," Buffett said in an interview with Charlie Rose.

It's refreshing to see the 79-year-old Buffett taking such a long view. But the fact is that Berkshire Hathaway is not going to exist in anything like its present form in 100 years' time. It'll probably last no more than 10 years after Buffett dies before it's broken up into various component parts. And when he gives quotes like this to Charlie Rose, it seems as though he's somewhat in denial about what his legacy is really going to be.

The minute that Buffett dies, Berkshire becomes a large conglomerate, and will trade, like all conglomerates, at a discount to its sum-of-the-parts valuation. Sooner or later, Berkshire's CEO will be persuaded to monetize the difference, and the storied company will come to its natural end. That's no bad thing: it's intrinsic to the nature of capitalism, which Buffett loves. But it does mean that buying companies on a 100-year time horizon is somewhat unrealistic.

*Felix Salmon is a Reuters blogger.

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Thanks for your input Felix.........now get back to work before i spank you. another comment from the peanut gallery, who are totally incapable of replicating warren's success. its like a one legged man giving Usain Bolt tips on improving his speed over 100m always good for a laugh though. by jack on November 18 2009, 11:38 Find this comment inappropriate? Report it

@Jack reminds me of a caller to 5FM today asking Gareth why he is always criticising tax drivers. The caller went on to suggest that these guys are good to him, they take care of him and show concern about whether or not he will be able to cross the road . .more because he is blind. Gareth always in form gave him a stunning answer saying the reason he feels tax drivers are good people is because he can not see their driving. The moral of the story is shut up if you dont know what you are talking about. Felix needs to build his empire or pyramid and stop telling us the short comings of Warren Buffet's plan. He did not have you in mind when he did it.. . .less by Gambu on November 18 2009, 14:16 Find this comment inappropriate? Report it

Felix I am not sure how old you are but perhaps you need to read a bit more about Buffett He has certainly thought of what happens when he has gone and has been quoted on that subject at length. As a shareholder in Berkshire I have no doubt it will continue after he retires and with similar success as well. If you think he is incapable . .more of selecting a great successor then you need to read more Felix. His ability to select great managers is simply legendary Felix. . .less by Shareholder on November 18 2009, 15:39 Find this comment inappropriate? Report it

Wow! You guys really worship the guy Its not as if he's never made a mistake: just look at his recent history. And this would be a subjective mistake - even more likely. Cant anyone have an opinion anymore? by louis on November 18 2009, 18:06 Find this comment inappropriate? Report it

Buffett Who says Buffett is ready to kick the bucket.He looks as if he's got at least 20 years left in him. by Bruce on November 18 2009, 19:42 Find this comment inappropriate? Report it

@Bruce no if he continues to eat burgers and drink coke by nm on November 18 2009, 20:51 Find this comment inappropriate? Report it

Boetie,.....if you match this achievement And stop being an just another of the milions of critics shouting from the shithole peanut gallery....I'll listen. All these self proclaimed 'EXPERTS' in consulting, management etc.......bunch of bloody W******. by Lionel on November 19 2009, 19:11 Find this comment inappropriate? Report it

Berkshire Hath core business Well I would call it acquiring undervalued companies and see them given very good returns. That is all really. Now Buffet has been the one really picking these companies. Even with his intrinsic value methods for picking stocks you have to admit the . .more man is a shrewd investor with an amazing neck for finding the right company at the right time. None of the managers in his company have demonstrated the same abilities thus far. It appears Buffet has neither made nor discovered star investors, none like him in his art or science. This, in my view, will hold the company from growing in the same rate as it has done under Buffet. Berkshire will definetly benefit from Buffet's decisions for many years to come. But without a great, not just apt or good, leader it will fall from it's glory. . .less by Chuma Mgolodelwa on November 21 2009, 23:33 Find this comment inappropriate? Report it

Berkshire Hath core business Well I would call it acquiring undervalued companies and see them given very good returns. That is all really. Now Buffet has been the one really picking these companies. Even with his intrinsic value methods for picking stocks you have to admit the . .more man is a shrewd investor with an amazing knack for finding the right company at the right time. None of the managers in his company have demonstrated the same abilities thus far. It appears Buffet has neither made nor discovered star investors, none like him in his art or science. This, in my view, will hold the company from growing in the same rate as it has done under Buffet. Berkshire will definetly benefit from Buffet's decisions for many years to come. But without a great, not just apt or good, leader it will fall from it's glory. . .less by Chuma Mgolodelwa on November 21 2009, 23:40 Find this comment inappropriate? Report it

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