Buffett's resignation: end of an era

It's the end of an era: Warren Buffett, arguably the most famous investor and one of the richest people in the world, plans to step down from his position as CEO of the holding company Berkshire Hathaway at the end of the year. He announced this on Saturday at the company's shareholders meeting in Omaha. Greg Abel, who is already a member of Berkshire Hathaway's top management team, is to succeed the 94-year-old Buffett. "I think the time has come for Greg to become CEO at the end of the year," Buffett said at the end of the event. He then received a prolonged standing ovation from the audience.

Buffett enjoys legendary status as an investor. He is often called the "Oracle of Omaha," after his hometown in the US state of Nebraska. The annual shareholder meeting in Omaha regularly attracts tens of thousands of visitors; Buffett himself has described it as "Woodstock for capitalists." At this event four years ago, Buffett declared Abel his likely successor, so it's no longer a surprise that he actually got the job. The only question was when the leadership change would take place. This has been a topic of speculation in the American business community for years.

In February, Buffett wrote in his annual letter to shareholders, citing his age, that it wouldn't be long before Abel would replace him as CEO. Saturday's announcement apparently surprised even Abel himself. Buffett said he only told his two children, who sit on the company's board of directors, in advance.

Abel, a Canadian native and 62 years old, joined Berkshire Hathaway in 1999 when the company acquired Midamerican Energy, the Iowa-based power utility he managed. He then led the energy division of Buffett's holding company for a long time, most recently serving as Vice Chairman. Buffett once said of Abel: "Greg will be more successful than I am, and if I said otherwise, my nose would grow." In his February shareholder letter, Buffett wrote that Abel had internalized Berkshire Hathaway's corporate culture and understood the following: "If you start fooling your shareholders, you soon believe your own nonsense and fool yourself."

Compared to Buffett, who enjoys his annual appearances at shareholder meetings and has also appeared on several television shows, Abel is considered more publicity-shy. He also has a reputation for being more involved in the operational business of subsidiaries than Buffett. On Saturday, he himself said he plays a "more active" role in the companies than Buffett.

The leadership change will mark another turning point for the company following the death in 2023 of Charles Munger, Buffett's longtime partner as vice chairman and a regular attendee at the shareholders' meeting in Omaha. Buffett, however, does not intend to retire completely just yet. He intends to continue serving as chairman and "be useful in some cases," as he said on Saturday. He emphasized, however, that Abel will have "the final say" in the future, including on investment decisions. Buffett also stated that he himself does not intend to sell a single share of Berkshire Hathaway. He owns approximately 14 percent of the shares.

Buffett was practically born into investing. His father was a securities advisor and, for a time, a member of the U.S. Congress, and he was already buying stocks as a teenager. His investing career began in 1965 when he bought Berkshire Hathaway, then a struggling textile company. He expanded the company into a gigantic empire, under whose umbrella a multitude of very diverse businesses are now gathered.

These include insurer Geico, railroad company BSNF, fast-food chain Dairy Queen, underwear manufacturer Fruit of the Loom, and confectionery specialist See's Candies. Berkshire Hathaway also holds stakes in a number of companies, including electronics giant Apple, credit card provider American Express, beverage manufacturer Coca-Cola, and financial services provider Bank of America.

Apple CEO Tim Cook was in the audience on Saturday. Afterward, he wrote on Platform X: "There has never been anyone like Warren." He added that Berkshire Hathaway would be "in good hands" under Abel. Also at the event was Microsoft co-founder Bill Gates, a longtime friend of Buffett, to whose charitable foundation the investor has donated a significant portion of his fortune. Former Secretary of State and presidential candidate Hillary Clinton was also in Omaha.

Buffett has always described his strategy as investing for the long term and only in industries whose business he understands. For a long time, he also largely stayed away from technology companies. However, this has changed somewhat in the recent past.

According to the news agency Bloomberg, Berkshire Hathaway's stock has gained an average of 20 percent annually between 1965 and 2024. The S&P 500 index has achieved annual gains of 10 percent during this period. Today, Berkshire Hathaway is valued at nearly $1.2 trillion on the stock market. The stock is trading at an all-time high, having gained nearly 19 percent since the beginning of the year, far outperforming the overall market.

The Bloomberg Billionaires Index currently values ​​Buffett's wealth at $169 billion, nearly $27 billion more than at the beginning of the year. No other person in the world has achieved a similar increase this year. Some of the world's other richest people, such as Elon Musk, Mark Zuckerberg, and Jeff Bezos, have suffered significant declines during this period. Buffett has stated that he intends to donate more than 99 percent of his wealth to charity.

Berkshire Hathaway, of course, isn't free of worries either. The company announced on Saturday that its operating profit fell by 14 percent in the first quarter. It is, however, in a very solid financial position. At the end of the quarter, it had cash reserves of almost $350 billion. Given this, there is much speculation in the financial markets about potential acquisitions. Buffett said he recently considered a $10 billion acquisition, but it ultimately fell through.

Buffett is known for his modesty and down-to-earth nature. The shareholders' meeting, which took place for the 60th time on Saturday, has achieved cult status not least because he speaks there in a down-to-earth manner about his investment philosophy. Buffett still lives in a modest house in Omaha, which he bought in 1958 for just over $30,000. It is estimated to be worth around $1.4 million today.

Before Buffett announced his impending resignation, he criticized US President Donald Trump's trade policy on Saturday, although without mentioning him by name. "Trade should not be a weapon," he said, adding: "We should be looking to trade with the rest of the world. We should do what we do best, and they should do what they do best." Buffett warned the US against antagonizing the rest of the world. In his view, it would be "a big mistake" to have 7.5 billion people dislike you and 300 million bragging about how well they have it. A world in which a few countries say, "Hahaha, we won," while everyone else is jealous is not a good idea.

In its first-quarter report, Berkshire Hathaway noted that the current trade conflicts could have a negative impact on most, if not all, of the company's subsidiaries and holdings. However, Buffett appeared unconcerned by the recent stock market fluctuations on Saturday.

Buffett has also spoken out on political issues in the past. For example, he has advocated for the rich to pay higher taxes. He has criticized the American tax system for favoring people like him, and he has claimed that he has a lower tax rate than his secretary.