Buffett Says His Successor at Berkshire Is Lined Up Mr. Buffett, in his annual letter to Berkshire shareholders on Saturday, said for the first time that he had chosen a replacement. But Mr. Buffett, 81, did not name the candidate, and emphasized that he and his longtime business partner, the 88-year-old Charlie Munger, were sticking around. "Do not, however, infer from this discussion that Charlie and I are going anywhere; we continue to be in excellent health, and we love what we do," wrote Mr. Buffett, who over five decades has built Berkshire, based in Omaha, into one of America's largest companies. By signaling a clear succession plan, Mr. Buffett hopes to reassure investors who have expressed concern over Berkshire's future leadership. Berkshire's share performance has lagged the broader stock market over the last two years, and Wall Street analysts partly blame the uncertainty surrounding a new chief executive. It was only a year ago that Berkshire disclosed in a securities filing that it had identified four current managers "who are capable of being C.E.O." But just weeks after that filing, David Sokol, a top lieutenant of Mr. Buffett whom many considered the front-runner, resigned when he was accused of violating the company's insider trading policies. Mr. Sokol's departure, a major embarrassment for Mr. Buffett, went unmentioned in the letter. But he praised the work of several executives who are thought to be leading candidates to replace him as chief, including Ajit Jain, the head of the company's reinsurance operations; Tad Montross, chief of the insurance business General Re; and Matthew Rose at the railroad unit Burlington Northern Santa Fe. Beyond succession issues, the 22-page letter delved into the performance of Berkshire's vast holdings, providing insights into the country's business prospects. "In short, when you look at Berkshire, you are looking across corporate America," wrote Mr. Buffett, whose net worth is about $50 billion, according to Forbes magazine. With a market capitalization of about $200 billion, Berkshire ranks among the top 10 most valuable companies in the United States, roughly the same size as General Electric and Google. The conglomerate has holdings large and small, like the giant railroad operator Burlington Northern Santa Fe railroad and the modest confectioner See's Candies. Berkshire on Saturday reported net income last year of about $10.3 billion, which was off 21 percent from 2010. The company's book value, or net worth - Mr. Buffett's preferred yardstick for performance - increased 4.6 percent, outpacing the broader stock market's 2.1 percent return. Among the assets that dragged on Berkshire's performance were its holdings in the housing sector, which include the homebuilder Clayton Homes, the carpet maker Shaw, and Acme Brick. "Last year, I told you that "a housing recovery will probably begin within a year or so," " wrote Mr. Buffett. I was dead wrong. He said that housing remained in a depression and is "the major reason a recovery in employment has so severely lagged the steady and substantial comeback we have seen in almost all other sectors of our economy." "Wise monetary and fiscal policies play an important role in tempering recessions, but these tools don't create households nor eliminate excess housing units," Mr. Buffett added. Fortunately, demographics and our market system will restore the needed balance - probably before long. Only then, Mr. Buffett said, will home building pick up and unemployment substantially drop. In his annual dispatch, Mr. Buffett steered clear of the tax-reform debate. In recent months, he made as many headlines in Washington as he did on Wall Street, inserting himself into the debate over whether the United States government should raise taxes on the wealthy. In an opinion article in The New York Times, Mr. Buffett told Congress to stop "coddling" him and other affluent Americans. He called on lawmakers to increase their taxes and close loopholes to address the soaring budget deficit. He said in the article that his tax rate of 17 percent was a lower percentage than the rate paid by anyone else in his office, including his secretary. On the money-management side of the business, Mr. Buffett highlighted in his letter his recent hiring of two unheralded money managers, Todd Combs and Ted Weschler, to help oversee his $77 billion stock portfolio. "Both of these men have outstanding investment skills," Mr. Buffett wrote. Each will be handling a few billion dollars in 2012, but they have the brains, judgment and character to manage our entire portfolio when Charlie and I are no longer running Berkshire. In searching for clues into Mr. Buffett's replacement, the letter perhaps heaped the most explicit praise on Mr. Jain, the head of Berkshire's large reinsurance business. Mr. Jain, 60, is a native of India who graduated from Harvard Business School and worked at the consulting firm McKinsey earlier in his career. He has worked for Berkshire for more than two decades. "His operation combines capacity, speed, decisiveness and, most importantly, brains in a manner that is unique in the insurance business," Mr. Buffett wrote. Charlie would gladly trade me for a second Ajit. Alas, there is none.