Thursday, May 24, 2007
Austan Goolsbee, economics professor at the University of Chicago Graduate School of Business, has a column in today's New York Times in which he expresses his disillusionment about Warren Buffet. Mr. Buffett has announced a competition to pick his successor. The top candidates will have a $5 billion portfolio to manage for two years, and the best performer gets the job. This defies the empirical evidence that incentives skew performance and makes Mr. Buffett seem as cheesy as Donald Trump. In addition, Berkshire Hathaway's publicly traded Class B shares have not outperformed the S&P 500, says Professor Goolsbee. See NYTimes, ‘The Apprentice: Omaha Edition,’ Starring Warren Buffett.