The Trial Balance is CFO.com’s weekly preview of stories, stats and events to help you prepare.
Part 1 — Bill Ackman says Berkshire Hathaway’s next CEO will be a better “operator”
Bill Ackman, CEO of Pershing Square Capital Management, shared his thoughts on Berkshire Hathaway’s future performance. Like Buffett in his recent letter to shareholders, Ackman praised Greg Abel, Buffett’s successor, for his ability to continue the company’s success but criticized Buffett’s approach. He added that Abel’s leadership will be different and likely more hands-on than his predecessor’s.
“Now you’re going to have more of an operator in charge of Berkshire, and I think there’s a lot of value that can be created at Berkshire with better operations,” he said on the World According to Boyar podcast last week.
He highlighted one of Berkshire’s businesses, the Burlington Northern railroad, in particular, and criticized its efficiency in comparison to its competitors. “It’s probably the least efficiently operated of all the railroads,” Ackman said. “I think Buffett is sort of reluctant in any way to get involved in fixing companies. He has CEOs he probably should’ve replaced years ago.”
He also criticized the 94-year-old chairman for his complacency before the pandemic. “He dismissed my concerns, and when the proverbial sh-t hit the fan,” Ackman said. “I thought Buffett would be taking advantage of this amazing opportunity to buy stocks, [but] he was frozen.”
Ackman said Buffett’s indecisiveness and conservative philosophy, though once effective, have hampered his decision-making approach in modern markets. He also noted that he understands why Buffett hasn’t changed his ways and why Berkshire continues to operate with a conservative approach to decision making. “[Buffett] sort of has this price discipline where if it trades for more than 10 times operating income, no matter how good the business, he won’t buy it, and that’s worked really well for him for 60, 70 years, [so] why should he change?”
Throughout the podcast, Ackman referred to his company’s goals as becoming “a modern Berkshire Hathaway,” while emphasizing his wish to update his philosophies. “My long-term ambition has always been to have a better record than Buffett,” he said.
Part 2 — This week
Here’s a list of important market events slated for the week ahead.
Monday, March 3
- S&P final U.S. manufacturing PMI, Feb.
- ISM manufacturing, Feb.
- Auto sales, Feb.
Tuesday, March 4 — None scheduled
Wednesday, March 5
- ADP employment, Feb.
- S&P final U.S. services PMI, Feb.
- ISM services, Feb.
- Fed Beige Book
Thursday, March 6
- Initial jobless claims, week of March 1
- U.S. productivity (final), Q4
- U.S. trade deficit, Jan.
- Wholesale inventories, Jan.
Friday, March 7
- U.S. jobs report, Feb.
- U.S. unemployment rate, Feb.
- U.S. hourly wages, Feb.
Part 3 — CFOs on earnings, JMAN Group Q&A, Generation West Virginia’s financial plan
This week, CFO.com will have a February update for the CFO Earnings Dispatch (3/4), a new edition of the Metric of the Month column (3/5), a Q&A with JMAN Group’s CFO Richard Cowen, an outlook on how Generation West Virginia’s CFO Candice Holcomb is financially preparing the nonprofit for the year ahead (3/6) and more.
