Billionaire investor Warren Buffett told CNBC Monday that Berkshire Hathaway investment managers Ted Weschler and Todd Combs have trailed the S&P 500 by a “tiny bit” since each joined the company.
However, the Berkshire chairman and CEO points out that they’ve done better in the market then he has over the same periods of time. He said it’s a tough time to beat the S&P 500.
“Overall, they are a tiny bit behind the S&P, each, by almost the same margin,” Buffett told Becky Quick on “Squawk Box” from Omaha, Nebraska — where Berkshire is located — after Saturday’s release of the conglomerate’s annual shareholder letter. “They’ve done better than I have.”
Weschler and Combs now manage about $13 billion each.
Combs, a former hedge manager, came to Berkshire in 2010 after a three year search for someone to help manage the company’s massive portfolio of stocks. Weschler, also a former hedge fund manager, joined Berkshire two years later, after paying a combined $5.3 million to win the 2011 and 2010 auctions for an annual charity lunch with Buffett.
“The first few years, the each of them, … they got well ahead of the index and they got paid,” Buffett said, explaining their compensation is structured to be dependent on their performance. “It came in thirds. So it could be clawed back, two-thirds of it, if they missed the second year and so on.”
Seen as a must-read for investors, Buffett covered many topics in his letter including Berkshire’s $112 billion cash pile and what he wants to do with it, his first stock purchase, the dangers of too much debt, and what he sees as the biggest risks ahead.
Berkshire’s portfolio of stocks, including top holdings American Express, Apple, and Bank of America, was valued at nearly $173 billion at the end of 2018.
Monday’s interview with Buffett, 88, was conducted at Berkshire-owned Nebraska Furniture Mart.