Let’s take a look at this recent stock chart from Apple (AAPL) to give us a clue at what might happen to Berkshire stock should Warren Buffett pass away or can no longer run the company. This chart shows a sudden, precipitous decline in the morning hours of October 3, 2008 after a rumor surfaced about Steve Jobs suffering a heart attack. The stock fell 8.2% in a hurry and only recovered after Apple refuted the rumor. Granted, this occurred in the middle of an ongoing global financial meltdown but it nonetheless illustrates a salient point for investors in companies run by larger than life CEOs.

One can argue that a smooth transition would result in a decline far less drastic. Nevertheless, the point isn’t so much about the intensity of the movement but rather the direction of the movement. Perhaps Berkshire investors have already priced in the loss of the great CEO. Maybe the recent plunge in Apple stock price is not just a reaction to the credit crisis but is also a pricing in of the loss of its visionary CEO. A surprise illness or death merely intensifies and shortens the reactionary response, it doesn’t negate the need to discount the inevitable and what would probably be less fitting replacement leadership.

Perhaps no other public company CEOs have become so much an essential part of their company. Apple is the very embodiment of Steve Jobs, the way he sees the world, and his will to impose upon the world his ideals and vision. Jobs’ vision is a poetic and contrarian vision – where technology is beautiful and accommodates the human. Berkshire is as much an embodiment of Warren Buffett. When he took over, the company was a struggling enterprise in a dying American textiles industry. Today, it is a massive investment conglomerate, or rather a wonderful collection, of businesses in myriad industries such as insurance, jewelry, furniture, etc. Warren Buffett’s vision is a playful and contrarian vision – where overly serious people swing from extreme greed to extreme fear and he stands to profit by watching for and catching their mistakes, like playing a yo-yo.

It is hard to argue that these two companies could remain the same without their singular leaders, regardless of how well-laid their succession plans may be. Sure, cultural DNA can be passed down much as genetic DNA travels through generations. But I inevitably see the world differently than my father as will the corporate heirs of Apple and Berkshire deviate from Jobs’ and Buffett’s visions. Shareholders are inherently nervous about the inevitable. The certainty of mortality or frailty leads to the uncertainty of change.