But even though investors may feel a little better about the David Sokol affair now, they have something else to worry about: insurance losses.

Around 40,000 shareholders descended on Omaha this week for the annual meeting of Berkshire Hathaway Inc, Buffett's ice-cream-to-insurance conglomerate.

Many had one big question as they arrived: What would Buffett say about Sokol, a former top lieutenant facing a U.S. Securities and Exchange Commission probe for trading in shares of a Berkshire takeover target, Lubrizol Corp?

Berkshire in March said it would buy the chemical company for $9 billion. That gave Sokol a $3 million paper profit.

Buffett's message was clear: Sokol misled him and Berkshire, and the company is doing what it can to assist regulators. And Berkshire is ready to press on.

Some investors were soothed by Buffett's comments.

"Berkshire has moved past Dave Sokol," said James Armstrong, president of Henry H. Armstrong Associates in Pittsburgh, which invests roughly one-fourth of its $400 million of assets in Berkshire.

"Buffett specifically stated that Sokol's conduct was inexplicable and inexcusable, and that you can't do something even close to the line," he added. "Sokol may have some problems with the SEC, but Berkshire will not. At this point, I don't see any affect on Berkshire."

As Berkshire shares do not pay a dividend, the stock's performance is even more important to shareholders.

Buffett tells shareholders they get returns by simply owning the stock and by the company doing well.

Berkshire's businesses provide such things as car insurance, energy, rail transit, bricks and underwear.

Through Friday, Berkshire shares had fallen 2.5 percent since the March 30 announcement of Sokol's resignation, while the Standard & Poor's 500 was up 2.7 percent.

The stock has also risen only two-thirds as much as the S&P index since February 2009, when many U.S. stocks cratered in the wake of the financial crisis.

Berkshire shares fell more than 1 percent early Monday after Buffett on Saturday said insurance losses tied to earthquakes in Japan and New Zealand contributed to an estimated 58 percent decline in first-quarter profit.

The company lost $821 million from insurance underwriting in the quarter, and said it will likely post its first full-year loss from insurance underwriting in nine years.

UNDERVALUED

The pressure on the stock has been such that Buffett hinted repeatedly over the weekend that it was undervalued.

On Saturday, during the shareholder meeting, he insisted Berkshire would shy from using shares to make acquisitions, because doing so would be an admission that they were worth less than they should be.

Buffett and Vice Chairman Charlie Munger both said Sunday at a news conference that the stock is not so cheap to buy back, but could be worth more. Some Berkshire investors agree.

"Warren has created value at a rate of 20 percent compounded for 45 years," mutual fund manager Mario Gabelli told Reuters Insider, referring to growth of book value per share. "All he has to do is do 11 percent over the next 10 years, and the stock is going to be a terrific investment."

The departure of Sokol removed one likely candidate to succeed Buffett, 80, as Berkshire chief executive.

Berkshire is believed to have at least three other internal candidates to follow Buffett, who said the person he considers the top contender is "straight as an arrow."

While Buffett did not say whom he meant, many shareholders call Berkshire reinsurance chief Ajit Jain the top contender.

Sokol's lawyer over the weekend said Buffett and Berkshire were trying to make his client a scapegoat.

Many investors expect Berkshire stock to fall several percent the day Buffett's departure is announced, but Armstrong said there are longer-term drivers to push the shares higher.

"People get hung up on Warren Buffett and what if he dies tonight. No question that would be a loss," he said. "But the company has 80 operating businesses that throw off lots of cash that gets sent to headquarters. The market will recognize that Berkshire stock is cheap, and should command a higher price."