Although he took a different route than Lindsay Lohan, Warren Buffett has been in the news a lot this week. The Oracle is no doubt used to the attention, but as his 80th birthday looms, two inevitable questions are getting closer to having an answer. We'll start there in our look at this week's ongoing financial stories. (Want to catch up on last week's news? Read Water Cooler Finance: Google Gains, Taxpayers Pay.)
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Billion Dollar Shoes to Fill
For years now, people have been wondering who will replace Warren Buffett. It's not likely to be Charlie Munger, as Buffett's long-time partner is 86 years old. Although this suggests that neither man intends to retire, it is probably time for them to start preparing possible successors.
The Wall Street Journal has reported that the two likeliest candidates are Li Lu and David Sokol. Sokol is a chairman for Berkshire's MidAmerican Energy Holdings and seems to take on a lot of the hard-cases within the Berkshire portfolio. He comes with strong management experience and a proven ability to watch costs - one of Buffett's favorite attributes in a manager.
Lu, on the other hand, is more of a value investor - scoping out possible deals for Buffett and Munger to pull the trigger on. The man comes with an incredible story - his parents were condemned to labor camps during China's cultural revolution, part of the Tiananmen Square uprising - as well as one exceptional investment in a Chinese company that turned $230 million into $1.5 billion in two years.
Who will Buffett pick? Hard to say, but the contrarian money is on splitting his post into two, giving Sokol the managerial side and Li the investment side. Only time will tell. (Learn more about powerful business partners in 5 Corporate Billionaire Duos.)
Bill Gate's might have set up boom boxes outside the windows of many of the world's richest people, playing the Red Hot Chili Peppers "Give It Away," because that's what they seem to be doing. Whether a call to action, a call for adoration or an attempt to shame those not on it, the Bill and Melinda Gates Foundation has provided a list of those who intend to give over half their wealth to charity.
Of course, Warren Buffett's pledge to the foundation was already well-known, but others, like Oracle founder Larry Ellison and former raider T. Boone Pickens, have joined the ranks.
A Russian drought has American farmers thinking about trying to get a second crop in to cash in on a shortage of wheat on the international markets. Russia has put a ban on exports, but it's not yet clear how much or how long of a squeeze this will put on supply.
Although wheat is definitely a commodity that is prone to yearly fluctuations, it is also a commodity that can be stock piled. If the shortage is expected to be a one-year situation, many of the bins may be raided to smooth over the price differences. If the near-term futures market can be relied on, expect to pay a bit more for your loaf of bread.
The man in charge of iPhone production, Mark Papermaster, has reportedly left the company over the issues with Apple's new smartphone. It's not clear whether this was directly related to the phone, a product that is wildly successful in spite of the problems, or a separate issue with the management.
In a much clearer exit, Hewlett-Packard's CEO, Mark Hurd (bad week for Marks) was fired last Friday for inappropriate expenses. The expenses reportedly revolve around the company paying a woman for unnecessary work during the same time as Hurd was in a relationship with her. The woman, Jodie Fisher (notable for appearing on a reality show and in R-rated movies), wrote a letter alleging sexual harassment while she was working a contract position for HP.
To add some irony to the intrigue, it's worth noting that Hurd took over at HP to clean up after the corporate spying scandal there in 2006. (Sometimes a CEO has to make a public statement to sort out a scandal. Find out whether it returns the company to profitability in Scandals That Bring The CEOs Out.)
Ending on a Good Note
Despite the food worries, there is one reason to feel pretty good heading into the last days of summer - BP's oil leak is capped and the relief wells are being drilled. This story has captivated, possibly horrified, much of the world. Now BP can finally move from frantically seeking a solution to cleaning up the consequences of its record-breaking spill. Hard work is still ahead, but we can all be forgiven a collective sigh of relief.