Billionaire investor Warren Buffett on Saturday hinted that he had found a successor to replace him as he reflected on 50 years in charge of his Berkshire Hathaway Inc conglomerate in an annual letter to shareholders.
The 84-year-old investment guru, ranked by Forbes as the world’s third-richest man with a fortune estimated at US$72.3 billion, said his replacement as chief executive would be “relatively young” and recruited from within.
“Our directors believe that our future CEOs should come from internal candidates whom the Berkshire board has grown to know well,” Buffett said. “Our directors also believe that an incoming CEO should be relatively young, so that he or she can have a long run in the job.
Photo: Reuters
“Both the board and I believe we now have the right person to succeed me as CEO — a successor ready to assume the job the day after I die or step down,” he said. “In certain important respects, this person will do a better job than I am doing.”
He also said his eventual successor will need to be calm, rational and decisive.
“My successor will need one other particular strength: the ability to fight off the ABCs of business decay, which are arrogance, bureaucracy and complacency,” Buffett said. “When these corporate cancers metastasize, even the strongest of companies can falter.”
The identity of Buffett’s likely successor has been a guessing game for years. However, the octogenarian tycoon known as the “Oracle of Omaha” bullishly declared he has no intention of giving up the reins anytime soon.
“I truly do feel like tap dancing to work every day,” he said.
Buffett said he had proposed that his son Howard succeed him as a non-executive chairman in order to guard against a botched appointment.
“My only reason for this wish is to make change easier if the wrong CEO should ever be employed and there occurs a need for the chairman to move forcefully,” he wrote.
Buffett’s letter outlined another year of gains for his group, with Berkshire Hathaway outperforming the S&P500 index: up 27 percent compared to the S&P500’s 13.7 percent.
In half a century, the contrast is even more impressive. A dollar invested in Berkshire in 1964 would now be worth US$1.826 million; the same dollar invested in the Standard & Poor’s 500 would be worth just under US$11,200.
Buffett compared his acquisition of obscure textile manufacturer Berkshire half a century ago to picking up a “discarded cigar butt that had one puff remaining in it.”
“Though the stub might be ugly and soggy, the puff would be free,” he said.
Berkshire is now one of the world’s largest conglomerates whose companies manufacture everything from “lollipops to jet airplanes.”
Meanwhile, Buffett paid tribute to vice chairman Charlie Munger, 91, for helping effect Berkshire’s transformation.
“It took Charlie Munger to break my cigar-butt habits and set the course for building a business that could combine huge size with satisfactory profits,” Buffett said.
Buffett painted an optimistic portrait of the US economy, noting that while unbroken gains were unlikely, the US could look forward to a bright future as it pulls clear of the Great Recession.
“The dynamism embedded in our market economy will continue to work its magic,” he wrote. “Gains won’t come in a smooth or uninterrupted manner; they never have.”
“And we will regularly grumble about our government. But, most assuredly, America’s best days lie ahead,” he wrote.
Meanwhile, Munger added his own letter this year, and predicted that Berkshire will be fine once he and Buffett are gone because of the management talent it already has.
He singled out reinsurance executive Ajit Jain and Berkshire Hathaway Energy chief executive Greg Abel as two Berkshire executives who could succeed Buffett one day. Both have been noted on short lists made by investors and the media.
“In some important ways, each is a better business executive than Buffett,” Munger said.
Additional reporting by AP
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS