Marking the end of an era, Warren Buffet on Monday announced that he is “going quiet”. The 95-year-old investor he will no longer write Berkshire Hathaway’s annual letters or attend its meetings. Buffett also announced a donation of over $1.3 billion to four family foundations in his final farewell letter.
Buffett, who plans to retire as CEO by the end of the year, is gradually transferring his responsibilities. This comes after he revealed at the company’s annual meeting that he would hand over leadership to his longtime deputy, Greg Abel. Abel will take charge of Berkshire’s massive $382 billion cash reserve, which has grown as Buffett avoided big acquisitions and limited stock buybacks in recent years.
In his letter, Warren Buffett shared that even though he moves and reads more slowly now, he still goes to the office five days a week and enjoys working with his team. He said he sometimes comes up with useful ideas or receives offers that wouldn’t have come otherwise. Buffett added that because Berkshire is such a large company and the market is at a certain level, good opportunities are rare, but they still exist.
Key highlights from Warren Buffett’s last annual letter
Remembering Charlie Munger
“Charlie had a huge impact on me and could not have been a better teacher and protective “big brother.” We had differences, but never had an argument. “I told you so” was not in his vocabulary,” Buffett said in his farewell letter.
Buffet’s heartfelt message for his children
Warren Buffett also had a message for his three children — Howard Graham Buffett, Peter Buffett, and Susan Alice Buffett. He said that they do not have to be perfect or fear making mistakes, as failures and setbacks are a normal part of life.
The 94-year-old investor said his children, aged 72, 70, and 67, might not be as fortunate as him when it comes to ageing. To help them handle his estate before alternate trustees step in, he has decided to increase the lifetime donations to their foundations.
He also explained that there are three alternate trustees in place in case of any unexpected situation, and they are not tied to any specific child.
Buffett added that he plans to keep holding A shares until shareholders fully trust Greg Abel, his successor, and said that the transition of confidence should happen soon.
All praises for next CEO Greg Abel
Warren Buffett praised Greg Abel, calling him the ideal choice to lead Berkshire Hathaway after him. He said Abel has exceeded all expectations and now knows the company’s operations and people even better than he does. Buffett added that Abel quickly grasps complex issues that many other CEOs might overlook and that there is no one else he would trust more to manage investors’ money. “My children are already 100% behind Greg as are the Berkshire directors,” he wrote.
Buffett’s charitable donations
Warren Buffett plans to continue writing his yearly Thanksgiving letter to shareholders, which also highlights his large charitable donations.
In his latest letter, Buffett said he will convert 1,800 of Berkshire Hathaway’s Class A shares into 2.7 million Class B shares. Out of these, he will give 1.5 million shares to the Susan Thompson Buffett Foundation, named after his late wife. The remaining 400,000 shares each will go to his children’s foundations — the Sherwood Foundation, the Howard G. Buffett Foundation, and the NoVo Foundation.
Buffett began donating to the Bill and Melinda Gates Foundation and his children’s foundations in 2006. He later joined hands with Bill Gates and Melinda French Gates to start the Giving Pledge, which encourages billionaires to give away most of their wealth during their lifetime or after their death.
Last year, Buffett announced that the Gates Foundation would not receive any donations after his death. Instead, a new charitable trust will be created, managed by his daughter and two sons.
“If my children simply do a decent job, they can be certain that their mother and I would be pleased,” Buffett said. “Their instincts are good and they each have had years of practice with very small sums initially that have been irregularly increased to more than $500 million annually.”