Buffett says may hire 4 CIOs, insurance to weaken

By Jonathan Stempel

OMAHA, Nebraska (Reuters) - Warren Buffett said on Saturday he might hire up to four people to succeed him as chief investment officer of Berkshire Hathaway Inc. (BRKa.N) (BRKb.N), and cautioned that recent strong results from the company's insurance operations were unsustainable.

The 76-year-old billionaire said he has received 600 to 700 inquiries for the CIO job since lamenting in his February 28 annual shareholder letter that Berkshire has no internal candidates young enough to serve a long time.

Buffett has said Berkshire has three candidates to succeed him as chief executive.

"I don't think it's at all impossible to think we'll find three or four" CIOs, Buffett said at Berkshire's annual shareholder meeting. "We will come up with, probably, a couple of people."

Attendance was expected to top 24,000 for the meeting, including many watching by video outside the main arena.

The meeting was held one day after Berkshire reported a 12 percent jump in first-quarter profit to $2.6 billion, helped by strong performance in insurance, which usually accounts for more than half of earnings. Insurance operations have benefited from a lack of major storms after 2005.

"Insurance earnings are going to go down, there's no question," a somewhat hoarse Buffett said. "As natural catastrophes occur, we will be paying out lots of money."

Buffett also said Berkshire's residential construction businesses may be pressured amid the U.S. housing downturn, though problems in U.S. subprime lending will not likely drag down the overall economy.

The annual meeting is the centerpiece of a weekend that Buffett calls "Woodstock for Capitalists," featuring events throughout Omaha. Hundreds of people waited outside in a thunderstorm before the arena's 7 a.m. opening.

"Everyone who owns Berkshire should come once to experience it," said Brian McCarthy, a real estate property manager in New York City attending his seventh. "It's a good reminder to go back to the basics of investing."

He said he had waited in line since 4:30 a.m.

A shareholder proposal to require divestment of Berkshire's stake in PetroChina Co. (0857.HK) because of the alleged ties of the Chinese oil company's parent to Sudan looked set for an overwhelming defeat.

PRIVATE EQUITY

Berkshire ended March with $46.03 billion of cash, leaving it with much firepower to make large purchases that Buffett covets.

Many may be international. Berkshire last year took a controlling stake in Israel's Iscar Metalworking Cos., and bought stock in British retailer Tesco Plc (TSCO.L) and South Korean steelmaker Posco (005490.KS).