Efficient market theory posits that it’s impossible to consistently beat the market, but Warren Buffett, CEO of holding company Berkshire Hathaway, may be a rare exception to that rule, and perhaps that explains why Berkshire’s stock shed nearly 5% today, after Buffett announced his resignation on Saturday.
Considered by many to be the world’s best investor and affectionately nicknamed “The Oracle of Omaha,” a nod to his hometown, Buffett was once asked about bitcoin in 2018 and his response wasn’t exactly flattering. Bitcoin is “probably rat poison squared,” Buffett said. He also delivered a damning indictment of the entire crypto industry. “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.” Curiously, bitcoin has defied Buffett’s gloomy prediction, increasing ten-fold since the infamous remarks.
And now after 60 years at the helm of what has grown to become a $1.1 trillion conglomerate, Warren Buffett will step down as CEO of Berkshire Hathaway at the end of the year, passing the reins to longtime Canadian Berkshire executive Gregory Abel. Buffett will remain chairman, although at 94, he will likely resign from that role as well.
(Longtime Canadian Berkshire executive will assume the CEO role upon Warren Buffett’s resignation at the end of 2025 / University of Alberta)
“I think the time has arrived where Greg should become the chief executive officer of the company at year end,” Buffett said at the Berkshire annual general meeting on Saturday, according to Reuters. “I think the prospects of Berkshire will be better under Greg’s management than mine.”
Berkshire Hathaway shares (BRK-A) fell 4.87% on Monday, closing the day at $769,960.00.
Perhaps unsurprisingly, Buffett started investing as a child. At only eleven years old, he was already purchasing shares of oil and gas firm Cities Service (now Citgo) for himself and his older sister Doris. In high school, he was buying used pinball machines and setting them up in barber shops. He later sold that business for $1,200.
By 1962, Buffett was a young millionaire running multiple investment partnerships, and buying up undervalued companies, including Berkshire Hathaway, which at the time was a textile manufacturer. He eventually took control of Berkshire in 1965, exited the textile business, and turned the firm into the $1.1 trillion behemoth it is today.
(A young Buffett with longtime friend and business partner Charlie Munger, circa 1977 / Rolexmagazine.com)
The 94-year-old Columbia and Wharton Business School graduate was a disciple of Benjamin Graham, the so-called “father of value investing,” and to this day, is a proponent of Graham’s investment ethos. Graham’s principles helped propel Buffett to the world’s richest billionaires list in 1993, and he has remained on it ever since, becoming the world’s richest man in 2008.
Most of Buffett’s wealth, a dizzying $160 billion according to Forbes, is in the form of Berkshire equity, and he intends to donate 99% of it before or after his death.
“More than 99% of my wealth will go to philanthropy during my lifetime or at death,” Buffett wrote in a 2010 letter to The Giving Pledge initiative which he co-established with fellow billionaire and Microsoft co-founder Bill Gates.
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