Warren Buffett’s Last Shareholder Letter (p. 1-8) Key roundup (25.11.10)
I’ve always respected him personally, and he’s really “brilliant” until the end. Buffett, who has lived in one house in Omaha all his life, has shown the path of a wise investor. Although he’s officially leaving for the end of this year, I have no doubt that the Berkshire Hathaway he left behind will run well based on his long-term culture.
–
- Official Declaration of Retirement and Confirmation of Succession
- “Going quiet”: Warren Buffett has made it official that he will no longer write an annual shareholder letter, and will not speak for long periods at shareholders’ meetings.
- Official Heir: Greg Abel: “Greg Abel will be CEO (original: boss) at the end of the year.”
- Future Communication: It’s not a complete disconnect, and we’ll reveal our stock donations and personal findings through our annual “Thanksgiving Message.”
- Greg Abel and Berkshire’s Future
- Absolute confidence in CEO: “Greg (Abel) understands a lot of Berkshire’s business a lot better than I know.” In particular, he affirmed that he is a “know” figure of the risks and potential of Berkshire’s core P/C business.
- 100 Years of Vision: “With a little bit of luck, we’ll only need five to six CEOs over the next 100 years, succeeding Greg.” (Emphasis on long-term management culture)
- CHILDREN’S ROLE (Culture Guardians): Their three children (in their 70s) are now at the right age to carry out their miscarriages, and as Berkshire Director, they have made it clear that they will act as Guardians of the culture, along with CEO Greg Abel.
- The only danger Berkshire should be wary of
- Buffett pointed to “when a good and loyal CEO (or subsidiary CEO) gets older and becomes a ‘liability’ factor” as the biggest risk to Berkshire’s future.
- He confessed to Charlie Munger and a “failure” that he also knew of but failed to resolve for human reasons, warning it could be a “big mistake.”
- Duties of the Board of Directors: The Board advised that at the CEO level, and at the subsidiary level, the CEO (Greg Abel) must face and speak out on this matter.
- advice for shareholders
- Volatility warning: “Our stock (Berkshire stock) will be down by 50% at times. It has happened three times in the last 60 years.”
- Belief: “Don’t despair. America will come back, and so will Berkshire stocks.”
- “The Magic of Omaha” and tributes to the characters
- Charlie Munger: “64 years my best friend” and “a great teacher,” he recalled, “there was no word ‘no’ in his vocabulary.”
- Omaha’s Power: Berkshire’s Success Is Because It Was Based On ‘Omaha’ Not Wall Street.
- The people who made Berkshire: Stan Lipsy (newspaper), Walter Scott Jr. (mid-American energy), Don Keogh (president of Coca-Cola) and others emphasized that Omaha’s connection became the cornerstone of Berkshire.
- Last philosophical advice (conclusion)
- Posture of life: “Decide for yourself what you want your obituary to feature, and live a life that deserves to be called that.”
- Road to Success: “Choose your heroes carefully and emulate them. You can never be perfect, but you can always be better.”
- GRATEFUL: “Thank America for maximizing your chances.”
25.11.10 Warren Buffet