Combs will be paid, says Buffett, as Simpson has been: by salary and an incentive compensation plan that gives him a proportion of the amount by which his performance beats the S&P 500 over a three-year period. Says Buffett, "You want to get away from the short-term ups and downs of the market when you're paying someone for running money, and a plan like this does the job."

    The details of Combs' position at Berkshire make it clear that he's entering into an extended trial, during which both Buffett and vice-chairman Charlie Munger (who met Combs first and sent him to Buffett) will be assessing the skills and thinking that their new manager will be bringing to the work.

    Buffett's original description, set forth three years ago, of his plan to hire someone to manage money stated that more than one person might be signed up. The possibility that an additional investment manager or two could be hired to join Combs therefore exists.

    At Castle Point, Combs' mandate has been financial services investments. But at Berkshire, Buffett told the board, Combs will in no way be restricted as to what he can invest in. "He can range wherever he wants to," said Buffett.

    That happens to be what Buffett has done, of course. At various times, he's been heavy in junk bonds, foreign currencies, and derivatives (a part of the Berkshire portfolio right now). He's likely to be similarly eclectic as he goes forward, with what incontestably will be megabillions. He just recently turned 80, but he has absolutely no intention of retiring from his three jobs: chairman, CEO, and über-investor at Berkshire.

    Disclosure: Carol Loomis is a long-time friend of Warren Buffett's and a Berkshire Hathaway shareholder.