A Look at Buffett's Heir

One disagreement between us and Todd Combs: his failure to own Berkshire Hathaway itself.

Many money-management firms operate largely on a star system, although they go to great lengths to deny it. As in other star-obsessed industries, such as entertainment and professional sports, truly superior talent is rare. The gap between superstar investors and average money managers is wide, and those who possess special gifts are remarkablywell compensated.

That isn't to say that assembling a gifted team and developing sound investing disciplines don't matter -- they're often critical to success. But the nature of the investment business is such that it's difficult for something as clumsy as a committee to deal with issues that require quick and decisive action. The buck usually stops at the desk of one person, maybe two -- and the entire world can see the results of his or her decisions in objective performance figures. In such a system, it's no surprise that superstars stand out.

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John Heins
Contributing Editor, Kiplinger's Personal Finance