The richest 90-year-old man on earth, Warren Buffett, has announced his succession plan for the company he runs. But he’s not retiring just yet.
transcript
Nimo Omer: Hi, I’m Nimo – and this is Sensemaker.
One story every day to make sense of the world.
Today, the richest ninety-year-old on earth has outlined his plan to let someone else take over the company he runs.
But he doesn’t seem to be in any hurry to step down.
So: why isn’t he retiring?
***
If you scroll down the list of the richest living Americans, a lot of them are under 50, even under 40: Elon Musk of Tesla… Larry Page from Google… Mark Zuckerberg from Facebook.
And a lot of them have made it big in the age of the internet and Big Tech by – in the words of Mark Zuckerberg – “moving fast and breaking things”.
But Warren Buffett stands out. He’s getting on. Actually, he’s really getting on. He’s 90 years old.
And unlike some of the others he got rich slowly but surely, over decades, by doing something much less radical – but still pretty remarkable.
Because he’s got an unmatched talent for putting his money into good companies that make good returns…
“A good business is one that earns a high rate of return on tangible assets. That’s pretty simple. And the very best businesses are those that earn a high rate of return on tangible assets and grow.”
Peter Krykant speaking about his ‘illegal’ drug van
He’s a legendary investor: his company’s portfolio has performed better than the stock markets for 37 out of the past 55 years…
His financial brilliance has earned him a fortune. He’s worth about $73.5 billion dollars – and he’s got an almost-religious following…
Every year, tens of thousands of people flock to Omaha, Nebraska to hear him talking at his company Berkshire Hathaway’s annual general meeting.
Fuelled by Cherry Coke and peanut brittle, he and his vice chairman, Charlie Munger, hold forth for hours not only on the company’s yearly performance, but also on their world views and their philosophies for investing – and for life.
“The money makes very little difference after a moderate level. I tell this to college students that I talk to. They are basically living the same life I’m living. We eat the same foods that I can guarantee.”
Warren Buffett on wealth
The atmosphere is part corporate conference, part funfair and part cult gathering…
People call him the Oracle of Omaha. Or sometimes the Sage of Nebraska.
Now, for a good few years, maybe even a few decades. Buffett-watchers have been wondering when Warren Buffett might announce the identity of his successor.
And over the weekend, after the latest Berkshire Hathaway AGM, he finally showed his cards.
“The directors are in agreement that if something were to happen to me tonight it would be Greg who would be taking over tomorrow morning,’ that’s what Warren told me.”
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He’s named long-time Berkshire Hathaway exec Greg Abel as the heir to his throne at the company.
In typical Buffett-style, it’s a pragmatic move, grounded in long-term thinking.
Greg is one of three vice chairmen at Berkshire Hathaway. The first – and the most senior in more ways than one – is Charlie Munger, who, at a sprightly 97 years old is even more elderly than Buffett.
The second is Ajit Jain, who’s already pushing 70, which leaves Greg Abel who is a spring chicken at a mere 59 years old.
Greg Abel’s age means he’ll have the most time to be CEO.
If he keeps working as long as his boss, he could even be chief exec for several decades…
So the succession planning has been decided, but still Warren Buffett is gonna to keep going, he’s not planning on retiring anytime soon…
Now, to most people, retirement seems kind of an appealing proposition, a chance to kick back and enjoy life after years of hard graft. But Warren Buffett has said he’s never going to retire, if he can avoid it – and my question is… why?
***
For one thing, Warren Buffett loves what he does.
“ I can hardly wait to get to work in the morning. It’s the best part of the day. There’s never been a day I haven’t looked forward to.”
Warren Buffett, on his love for work
And he’s been doing the same job for a really long time.
“I’ve been a personal net buyer of stocks ever since I was 11, every year. There’s been 15 American presidents in my lifetime. I’ve lived under a third [of the presidents]. I didn’t buy stocks under Hoover, I was only about six months old then. But there were seven republicans and seven democrats after that and I’ve bought stocks under every one of them.”
Warren Buffett, on his long career
Warren Buffett filed his first tax return at the tender age of 13. By the time he was 32, he’d become a millionaire.
So he’s a finance legend for a reason: he’s been in the game forever – and he’s incredibly good at what he does.
That gives him pretty good grounds to keep on going. If you’d dedicated your life to something you loved, why would you stop doing it?
You might have to give up if you were too old, sick and tired to carry on. But Warren Buffett is showing no signs of slowing down.
“I’m in remarkably good health, particularly considering the life I’ve led.”
Warren Buffett, on his health
He’s as sharp as ever and feeling great, even at his advanced age, which is kind of amazing, given that his diet mainly consists of full-fat Coca Cola, chips and lollipops:
“I drink probably five 12oz cokes a day, and that’s about 700 calories and I’ve been doing it more or less all my life and I can’t imagine anyone that feels better than I do. I’m happy, I enjoy life. I’ve always wondered if I had a twin and he’d had to eat broccoli and asparagus and brussels sprouts and done it every day, and I was drinking my coke and eating potato chips – and here are some cookies that have 100 calories an ounce… Which of us… I think the other guy would be gone.”
Warren Buffett, on his diet
If you were Warren Buffett, why would you give up when there’s plenty of fuel left in the tank?
But actually, there’s another big reason for Warren Buffett to stay in his job – his shareholders seem to want him to. Because he is, without a doubt, one of the best in the business. If you invested $1,000 with Berkshire Hathway back when Warren Buffet took over in the sixties it’d be worth $16 million today.
He might be in his nineties, but Warren Buffett has still got it.
Today’s story was written and produced by Ella Hill.
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