Could Iscar's 'Brillant' Israelis Handle Buffett's Empire?
A weekend report in the Wall Street Journal said that one of the richest men in America and one of the world's most successful investors, Warren Buffet, was considering naming two Israelis to run his Berkshire Hathaway investment firm. On the short list for the job, according to the WSJ, are the CFO and CEO of Iscar, Danny Goldman and Jacob Harpaz.
Last week, Buffett, 81, announced that he had stage 1 prostate cancer, and will undergo chemotherapy. Although his life is not in any danger right now – stage 1 is the mildest form of the disease – rumors have abounded that the senior investor was considering stepping down as head of Berkshire Hathaway due to his age and concern for his health.
The WSJ said that Goldman and Harpaz are 14th and 15th on the list of possible Buffett replacements. The newspaper based its assessment on the work of two firms that do textual analysis. The firms analyzed Buffett's newsletters and annual reports. Since 1977, the firms said, Buffett has written over 400,000 words, and the firms analyzed those words for indications on how Buffett feels about executives in Berkshire Hathaway or in companies he has bought – like Israel's Iscar, which Buffett paid some $4 billion to acquire 80% of in 2006, making it his largest acquisition ever.
Buffett said he purchased the company not only for its core metalworking business, but because it was well managed, calling its directors and managers “brilliant strategists and operators.”
According to the analysts, the frequency of superlatives like “excellent” and “brilliant” appear in close proximity and context to mention of the Israelis' names. Based on that analysis, Goldman is a leading contender, because Buffet mentions his name in a positive context the most times, with Harpaz not far behind. However, other factors play into the analysis to lower both Israelis' “scores.” The leading contender is said to be Ajit Jain, head of Berkshire Hathaway's reinsurance division.
It should be noted that Buffett has generally been generous in praise with many of his employees – even some who are no longer with the company, such as David Sokol, a senior executive who Buffett was said to be grooming to replace him, but who was found to have violated his boss's rules about insider trading last year.