Stocks & Markets January 7, 2010, 9:39PM EST

Buffett's Big Task: Bringing Berkshire Back Up to Speed

Bloomberg BusinessWeek asked investing pros for insights on what's next for the soon-to-be-octogenarian investor

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At a time when Warren Buffett has never been more famous, his future—and that of Berkshire Hathaway (BRK/A:US), the company he heads—has never been more uncertain.

Buffett's fame multiplied after the central role he played in the financial crisis, which included lending a helping hand to Goldman Sachs (GS) and General Electric (GE) and reassuring the investing public he was buying stocks after 2008's market crash.

Talk to close watchers of Buffett and you find that all the publicity of the past year failed to fully answer key questions: Where is this renowned value investor going to find bargains after stock prices have advanced 67% in nine months? Why is Buffett making the biggest acquisition of his career, railroad Burlington Northern (BNI), at a price even he admits isn't cheap?

And, perhaps most important, what will Berkshire look like after Buffett? Though still apparently in good health, Buffett, the company's chairman and chief executive, turns 80 on Aug. 30, 2010.

The questions might not vex investors so much if Berkshire Hathaway hadn't lost some stock market respect in recent years. For 15 of the last 22 years, Berkshire stock has beaten the broad Standard & Poor's 500-stock index.

But in 2008, shares tumbled 32%. They failed to rise more than 2.7% in 2009—20 percentage points behind the S&P 500 last year. Worsening any recent feelings of lost prestige, Moody's Investors Service took away Berkshire's prized AAA credit rating in April 2009, and debt from the Burlington Northern deal could threaten the AAA credit rating from Standard & Poor's.

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The $26 billion Burlington Northern acquisition, announced in November, adds to Berkshire's empire, which ranges from insurance to retail, utilities, and manufacturing. As part of the deal, Buffett is ending a Berkshire idiosyncrasy: Each share of its "B" class of stock (BRK/B:US), the so-called Baby Berkshires now priced at $3,320 per share, will be split into 50 shares—consequently offered at a lower, more market-friendly price—if shareholders approve the plan Jan. 20.

But by far the most notable thing about Berkshire Hathaway is not its sky-high share prices, but Buffett himself, who remains firmly in control of the company he built from a troubled textile manufacturer into a giant conglomerate. Buffett did not respond to requests for comment for this story.

Whitney Tilson, managing director of Tilson Capital Partners, expects Buffett to remain on the job for at least five years. "He loves what he does and he's playing it at the highest level he's ever played," says Tilson, who owns Berkshire shares. "He gets better with age."

"No one can invest like Warren Buffett," says Gabriel Wisdom, managing director of American Money Management.