Warren Buffett shocked an arena full of his shareholders on Saturday by announcing that he wanted to retire at the end of the year.
Buffett said that he would recommend that Greg Abel Greg’s Berkshire Hathaway board of directors should become CEO at the end of the year.
“I think the time has happened when Greg should become the director general of the company at the end of the year,” said Buffett.
Abel is the designated successor of Buffett for years, and he already manages all the non-assurance companies of Berkshire. But we have always assumed that he would only take over after the death of Buffett. Previously, Buffett, 94, has always said that he did not intend to retire.
Buffett announced the news at the end of a five -hour question period and answered any questions about it. He said that the only members of the board of directors who knew that it was going to happen was his two children, Howard and Susie Buffett. Abel, who was sitting next to Buffett on stage, had no warning.
Many investors have said that they believed that Aub would do a good job to manage the Berkshire, but it remains to be seen how good it will be to invest in Berkshire species. Buffett also approved it on Saturday by committing to maintain his fortune invested in the company.
“I have no intention – zero – to sell a part of Berkshire Hathaway. I’ll finally give it,” said Buffett. “The decision to keep each part is an economic decision because I think that Berkshire’s prospects will be better under the direction of Greg than mine.”
Thousands of investors in the Omaha arena have given Buffett a standing ovation after its announcement in recognition of its 60 years at the head of the company.
CFRA research analyst Cathy Seifert said it should be difficult for Buffett to make this decision to resign.
“It was probably a very difficult decision for him, but it is better to go on your own conditions,” said Seifert. “I think there will be an effort to maintain an environment” as usual “in Berkshire. It is still to be determined. “
Buffett previously warned that Trump’s prices were harmful
Earlier, Buffett warned the disastrous global consequences of President Donald Trump’s prices on Saturday while saying to the thousands of investors gathered at his annual meeting that “trade should not be a weapon”, but “there is no doubt that trade can be an act of war”.
Buffett said Trump’s trade policies have increased the risk of global instability by angry the rest of the world.
“This is a big mistake in my opinion when you have 7.5 billion people who do not like you very well, and that you have 300 million people who have timed the way they did,” said Buffett by approaching the subject in the minds of everyone at the start of the Berkshire Hathaway shareholders’ meeting.
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While Buffett said that it is preferable that trade is balanced between countries, he does not think Trump takes care of the right way with his widespread prices. He said the world would be safer if more countries are prosperous.
“We should try to exchange with the rest of the world. We should do what we do best and they should do what they do best, “he said.
America has gone through revolutionary changes since its birth and the promise of equality for all, which was not made until years later, said Buffett. But nothing that happens today has changed its long -term optimism about the country.
“If I was born today, I would continue to negotiate in the uterus until they say:” You could be in the United States “, said Buffett.
Market disorders do not create great opportunities
Buffett said that he simply did not see a lot of investments at a price in a more interesting way than he includes these days, so Berkshire is seated on 347.7 billion dollars in cash, but he predicted that a Berkshire day will be “bombed with opportunities for which we will be happy that we have the money”.
Buffett said that the recent turmoil in the markets that made the headlines after the announcement of Trump’s price last month “is really nothing.” He rejected the recent market decrease because he has experienced three periods in the last 60 years of Berkshire management when his company’s shares were divided by two. He cited when the industrial average of Dow Jones went from 240 on the day of his birth in 1930 to 41 during the Great Depression as a really significant drop in markets. Currently, the industrial average of Dow Jones is at $ 41,317.43.
“It was not a dramatic bear market or anything,” he said.
Buffett said he had not bought any Berkshire’s actions this year either because they don’t seem to be a good deal either.
Investor Chris Bloomstran, president of Semper Augustus Investments Group, told Gabelli Investment Conference on Friday that a financial crisis could be the best thing for Berkshire because it would create opportunities to invest at attractive prices.
“I am sure he prays for the business war to empire. He will not say it publicly, but Berkshire needs a crisis. I mean that Berkshire prosper in crisis,” said Bloomstran.
Berkshire’s meeting attracts thousands
The meeting attracts some 40,000 people each year who want to hear Buffett, including certain well -known celebrities and investors. This year, Hillary Rodham Clinton also participated. Clinton was the last candidate that Buffett supported publicly because he has moved away from politics and any controversial subject in recent years for fear of harming Berkshire companies.
Haibo Liu even camped during the night in front of the arena to be online on Saturday morning. Liu said he is worried that this year could be the last Buffett meeting since he was 94 years old, so he had a priority to attend his second meeting.
“He helped me a lot,” said Liu who traveled from China to attend. “I really want to thank him.”
Concerns to replace Buffett
The shareholder Linda Smith, 73, first learned Warren Buffett and Berkshire Hathaway when she praised a room to her sister, Doris, while she was a graduate student in Washington DC Smith, said that Doris had returned after an annual meeting shortly after Berkshire had bought the SEE candies.
Smith could not buy it immediately because the price of a single action was sold about $ 3,400 and that was equal to his income as a graduate student. But as soon as she obtained a job after university, she followed her friend’s advice and started to save to buy part of the action that is now sold at $ 809,350.
Over the years, Smith believes that she has probably attended around 20 annual meetings – often bringing a friend.
“I really like to listen to Warren Buffett – especially this year with everything that happened,” said Smith.
Buffett has long said that he did not intend to retire because he likes to determine where to invest Berkshire’s money. He plans to continue working until he dies or becomes incapable. But he remains in good health even if he uses a cane, and he shortened the question period of the meeting this year of a few hours.
“I think that even if he dies, these companies will keep their value,” said Smith, looking in the 200,000 square feet exhibition hall filled with Berkshire companies like BNSF Railroad, Geico Insurance, Pilot Truck Stops, Duracell Batteries and many others. “I foresee that my stock is dropping for a while, but good companies and good people will come back,” she said.
But Smith and thousands of others will certainly miss the voice of Buffett’s reason after his departure. Buffett has now run the Berkshire for 60 years.
Buffett said that Vice-President Greg Abel, who already supervises all the non-assurance activities of Berkshire, will take over as CEOs when he left.
Shareholders like Steven Check, who direct Check Capital Management, are not particularly worried about the succession because Abel is proven and Berkshire companies have largely. Buffett said that Aubl could even be a more practical manager than him and get more out of Berkshire companies.
“I think we will have a more practical manager and it could be a good thing,” said Check. But he said that Aubel also knows that these managers enjoy the freedom to manage their businesses and that Aub will do nothing to deactivate them.
