Source : THE AGE NEWS
By Josh Funk
Omaha, Nebraska: Warren Buffett shocked an arena full of his shareholders on Saturday by announcing that he wants to retire at the end of the year.
Buffett said he will recommend to Berkshire Hathaway’s board that Greg Abel should become CEO at the end of the year.
Warren Buffett in 2018. The “Oracle of Omaha” has announced his intention to step down as the head of Berkshire Hathaway.Credit: AP
“I think the time has arrived where Greg should become the Chief Executive office of the company at year end,” Buffett said.
Abel has been Buffett’s designated successor for years, and he already manages all of Berkshire’s non-insurance businesses. But it was always assumed he wouldn’t take over until after Buffett’s death. Previously, the 94-year-old Buffett has always said he has no plans to retire.
Buffett announced the news at the end of a five-hour question and answer period and didn’t take any questions about it. He said the only board members who knew this was coming were his two children, Howard and Susie Buffett. Abel, who was sitting next to Buffett on stage, had no warning.
Many investors have said they believe Abel will do a good job running Berkshire, but it remains to be seen how good he will be at investing Berkshire’s cash. Buffett also endorsed him by pledging to keep his fortune invested in the company.
“I have no intention – zero – of selling one share of Berkshire Hathaway. I will give it away eventually,” Buffett said. “The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg’s management than mine.”
Thousands of investors in the Omaha arena gave Buffett a prolonged standing ovation after his announcement in recognition of his 60 years leading the company.
Buffett warns that Trump’s tariffs were harmful
Earlier, Buffett warned about the dire global consequences of US President Donald Trump’s tariffs while telling the thousands of investors gathered at his annual meeting that “trade should not be a weapon” but “there’s no question that trade can be an act of war.”
Buffett said Trump’s trade policies have raised the risk of global instability by angering the rest of the world.
Berkshire Hathaway Vice Chairman Greg Abel will take over as CEO of the company.Credit: AP
“It’s a big mistake in my view when you have 7.5 billion people who don’t like you very well, and you have 300 million who are crowing about how they have done,” Buffett said as he addressed the topic on everyone’s mind at the start of the Berkshire Hathaway shareholders meeting.
While Buffett said it is best for trade to be balanced between countries, he doesn’t think Trump is going about it the right way with his widespread tariffs. He said the world will be safer if more countries are prosperous.
“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,” he said.
America has been going through revolutionary changes ever since its birth and the promise of equality for all, which wasn’t fulfilled until years later, Buffett said. But nothing that is going on today has changed his long-term optimism about the country.
“If I were being born today, I would just keep negotiating in the womb until they said, ‘You could be in the United States,’” Buffett said.
Market turmoil doesn’t create big opportunities
Buffett said he just doesn’t see many attractively priced investments that he understands these days, so Berkshire is sitting on $US347.7 billion in cash, but he predicted that one day Berkshire will be “bombarded with opportunities that we will be glad we have the cash for.”
Buffett said the recent turmoil in the markets that generated headlines after Trump’s tariff announcement last month “is really nothing.” He dismissed the recent drop in the market because he’s seen three periods in the last 60 years of managing Berkshire when his company’s stock was halved. He cited when the Dow Jones industrial average went from 240 on the day he was born in 1930 down to 41 during the Great Depression as a truly significant drop in the markets. Currently the Dow Jones Industrial Average sits at $US41,317.43.
“This has not been a dramatic bear market or anything of the sort,” he said.
Buffett said he hasn’t bought back any of Berkshire’s shares this year either because they don’t seem to be a bargain either.
Investor Chris Bloomstran, who is president of Semper Augustus Investments Group, told the Gabelli investment conference Friday that a financial crisis might be the best thing for Berkshire because it would create opportunities to invest at attractive prices.
“I’m sure he’s praying that the trade war gets worse. He won’t say that publicly, but Berkshire needs a crisis. I mean Berkshire thrives in crisis,” Bloomstran said.
The meeting attracts some 40,000 people every year who want to hear from Buffett, including some celebrities and well-known investors. This year, Hillary Rodham Clinton also attended. She was the last candidate Buffett backed publicly because he has shied away from politics and any controversial topic in recent years for fear of hurting Berkshire’s businesses.
AP
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