Today Warren Buffett announced that hedge fund investment manager of Castle Point Todd Combs would be joining Berkshire Hathaway soon, and there is talk that he may eventually take over for Buffett. Many had never heard of Combs and wonder why he was the choice, and what makes him so special to qualify for this standing. We take a glance at some Castle Point investments to see what he’s been working on prior to this to speculate on what made him a worthy selection.
The Morning Take-Out on The New York Times states that Combs was not a “buy-and-hold man.” He had long positions, they inform, with over 80 stocks in a 30-month period. Warren Buffett had said that Combs has the best shot at being his successor, although if they find someone else who seems right, that person would be in too– reported Market Folly.
There are people who have no idea who Combs is, and are wondering why exactly he was the one being primarily considered. Interestingly, one of the criteria Buffett has been quoted as desiring for investment managers is someone who was “genetically programmed” to recognize and avoid risks, including those not previously encountered. The New York Times has also quoted Buffett in the past as saying that Todd Combs was always “enamored” with Berkshire– that he’ll be good, and also that he’s the right type of guy. Combs has had previous experience working with Progressive Insurance and for Florida’s comptroller. So, let’s take a look at some of the investments Mr. Combs is involved with (he runs a fairly concentrated portfolio):
Some of the increased positions among Castle Point investments include US Bancorp (up 27.5 percent), MasterCard (up 70 percent), and Western Union (up 36 percent), Market Folly details. Todd Combs’ expertise will come in handy, they say, considering that Berkshire owns large stakes in Bancorp and other financial groups such as American Express and Wells Fargo. In fact, US Bancorp is Number 1 in the top 25 positions in Castle Point’s assets, bringing in 8.2 percent of these. Castle Point shares “the same large position” in US Bancorp as does Berkshire Hathaway.
So, after Buffett’s announcement regarding Combs’ new place with Berkshire Hathaway, it appears he generally just likes and approves of the guy, must somehow find him genetically appropriate (huh?), and appreciates the way the portfolio with Castle Point looks. Interesting, but we’d love to hear more about the genetic thing.
Morning Take-Out Oct. 26, 2010, The New York Times
Todd Combs of Castle Point Capital Joins Berkshire Hathaway as Investment Manager, Market Folly