OMaha, neb. – Warren Buffett shocked an arena full of its 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. “
Abel expected to do well
In many ways, Abel has already managed a large part of the company for years. But he did not manage Berkshire's insurance operations or decided where to invest all his money. He will now do these tasks, but the vice-president Ajit Jain will remain to help supervise insurance companies.
The director of investments, Omar Malik of Hosking Partners in London, said before the announcement of Buffett that he was not worried about the future of Berkshire under Abel.
“Not really (worried). He had so long alongside Warren and a chance to know the companies,” said Malik about Abel.
Is the question to allocate capital as dynamically as Warren? And the answer is no.
“But I think he will do a good job with the support of others,” said Malik.
Cole Smead of Smead Capital Management said that it was not surprised that Buffett withdrew after watching it on Saturday because the 94 -year -old was not as clear as in recent years. At one point, he made a basic mathematical error in one of his answers. At other points, he got out of the track while telling stories about Berkshire and his investment without answering the question asked.
Abel is well considered by the managers of Berkshire and Buffett has welcomed its business sense for years. But he will find it difficult to match the legendary performance of Buffett, and as he does not control 30% of the Berkshire stock as Buffett does, he will not have as much latitude.
“I think the challenge he will have is if someone will give him buffett or (former vice-president Charlie) Munger's Pass Card? No chance in the name of God,” said Smead. Buffett has always appreciated a dedicated audience among shareholders.
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 Steven Check, who runs Check Capital Management, said beforehand. 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.
Buffett previously warned that Trump's prices were harmful
Earlier, Buffett warned on Saturday of the disastrous global consequences of President Donald Trump's prices 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.
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.
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.”
