CEO of Berkshire Hathaway Warren Buffett Smpered on the public at his annual meeting in Omaha on Saturday when he announced his plan to resign at the end of the year after a race of almost six decades as the leader of the billions of dollars.
The legendary billionaire businessman, alongside his late trading partner Charlie MungerHas spent a large part of his life building Berkshire Hathaway from a textile manufacturer at the conglomerate multinational and portfolio company that it is today.
Along the way, he developed a reputation for his sage advice, transmitted by his letters to shareholders, Interviews and various speeches, offering information to succeed not only in business but in life.
Alice Schroeder, journalist and former director general of Morgan Stanley, wrote the successful biography of Buffett 2008, “The Snowball: Warren Buffett and Life Affairs“” After spending a decade getting to know him and his family. She spoke with Business Insider of the inheritance of the emblematic investor in the middle of the news of her planned resignation.
This conversation was slightly modified for length and clarity.
First of all – What is your initial reaction to the news? How do you feel?
My initial reaction is: for the love of heaven, he deserves to retire to 94 years old Daily responsibilities of being CEO, which are quite considerable. It is incredible that he has kept this role so far. I am sure he will remain involved and will be consulted by those who want his advice – and who would not want his advice? But I think it’s a big step from him, and I hope he has a very well -deserved retirement.
Well deserved indeed. Have you been in contact recently? Was it something you knew on the horizon?
I have not been in contact with him for a few years, not because of a problem, but because he is at an age when he does not tell the phone with everyone he knows all the time. But I was not surprised. I knew he stay CEO as long as he couldBut he would not remain CEO beyond a certain point where he did not like to have this responsibility, or for any other reason – I will not speculate on anything linked to his health because I do not know enough, but anyone at 94 years old has things in progress. So this day was going to come sooner or later.
What do you think that means for the future of Berkshire Hathaway?
I have thought about it since Warren was in sixties because he is literally not replaceable, and therefore, of course, Berkshire Hathaway will be different. He talked about the results of the investment as his deputies were not as stellar, perhaps, as his previous record. In addition, Greg Abel obviously has his own style of leadership and management, and it is not Warren’s style.
That said, I never believed that the decentralized leadership style of Berkshire would survive Warren who is recovering as CEO. Warren was very candid saying: Do not expect the company’s results to be much better – or necessarily any Better – than the long -term market after its departure. Well, the long term has happened, and now a lot will change.
I think Berkshire has huge advantages. It has internal diversification, it has Strong and stable companies. They will obviously survive. And I think he will reach the only objective he told me that he had a long time, is that he has built him to survive and always be a viable, reasonable and prosperous business for 30 years after he no longer manages it. So I think that those who have the stock should not be worried because the commercial side could be almost put on the automatic pilot, but there is a certain magic element now, of course.
Are there attenuating circumstances that you see who could disrupt this stability? Or do you think he has built something stable that will survive this moment of economic agitation and well in the future?
Warren’s commercial career started during the great depression when he was a child and crossed Vietnam, Various financial crisesand the pandemic. He did everything possible to build a robust business that could survive what I would call normally predictable events. Can you think of a black swan that could disrupt the business? Of course, but they would be very punctual scenarios, and I think you will have to keep many standard deviations away from the very extreme results for this to happen.
What about advice for The probable successor of Buffett, Greg Abel? Are there things you think Warren could tell him or not, or things that you advise him to do when he enters these shoes?
I think it would be presumptuous enough for me to give advice that Warren Buffett has not given, but with this warning, his biggest objective for his successor has always been that his successor would allocate capital to wisdom, and do not succeed in meat meat, to too much for other companies, would start to divest companies or buy actions to excessive assessments. I think he actually hammered that in people’s heads, and it is unlikely to happen.
That said, Berkshire has, for some time, generated a lot more capital than it can use. So I think that the possibility of a dividend could be there under someone other than Warren. But I would not expect Berkshire to change his approach to manage risk management or asset liabilities or something like that.
Do you think that a dividend could be a short-term game to reassure investors after its departure?
I don’t think one dividend will be announced in the short term. I think it will be absolutely excluded to be potentially on the table at some point. But what I think will stabilize investors is that nothing remarkable is without warren in the role of the CEO, because there is a magic for him and the things he says, of course, and there will be a reaction to him not to be in the daily role. We will therefore have to go through a period when he is not in the daily role and see that companies are in fact robust. You cannot predict how investors will react, and I know that most investors would agree that it is irreplaceable, but we also know that it would happen for a long time to get older, so I hope that people are prepared.
How long do you think it will take for this confidence to come back?
Currently, predicting anything on the market would be stupid. Berkshire would also be affected that any other company by things like prices or the fact that the United States has changed its position on the treatment of the rest of the world. So I don’t want to predict anything.
Do you think the political environment played a role in its decision to resign within this period?
I mean, he is 94 years old – it’s reasonable for him to resign. I don’t want people to think the political environment is the reason. If it was, he would probably have said, because he is quite simple about his Views of macroeconomics. And if it was really a major factor, I think he would have identified it.
By looking at your relationship with him, what lessons did he share with you that you are now thinking, in the light to give him this step?
I learned almost everything I know about people, manage people and negotiate from him, including in my personal life. I attribute him to make a major change in my wedding, and I am now very Fortunately married to my second husband, and it’s directly, directly Due to Warren Buffett.
I don’t think I have never told this story, but when I got married to my second husband, he was vetoing in power on whom I chose. It is how much I trust his judgment on people. I was happy to give him a veto. Fortunately, he loved David.
It is incredible to deal with people, but there are also timeless types of things he hammered at home again and again: Which makes a good businessHow to compare two companies and know which one is the best, how to personally manage the risks in your wallet.
Do you have a favorite buffett-IMS, either personally or something that he shared with the world, which resonates particularly with you?
One thing he said to me, in different ways is that if you talk to someone, and you say 99 things about them that are positive, and that you add a little criticism, the only thing they will remember is criticism – and it is How he manages people. I did not really understand that until I spend so much time with him, but I have seen him since in life, again and again, that you really have to praise not diluted if you want people to feel it, and if you have something negative to say, tell them in private.
I know you mentioned that you have not been in contact for some time, but have you contacted since you heard the news?
I don’t have it yet, but I intend to write a letter to him. He likes to receive mail; He particularly appreciates it, and I know he keeps it. You attract a lot of correspondence if you are as famous as him, and, of course, some people are dislocated. In fact, it was one of the most important things he taught me: being both rich and famous is a terrible curse. You cannot trust anyone, you have no privacy, you cannot go nowhere without being interrupted, and it really disturbs your life – but if you really want to say “ Here is what you have mean for me ”, then the best way for Warren is to send a letter.
What should people know about him?
He always wanted his legacy be as a teacher. I think that his shareholder letters, all the incredible quotes and stories that are in my book, or things that other people have written about it, it is his work body, and his teachings will have a lasting value. He first started to want to teach investorsBut he was more and more connected in the staff, how to live your life – you do not want to end up being someone who, if you had a heart attack while you give a speech and fall from the scene, no one would call 911, and he told me about people he knew who were in this situation. So I think he has shared many lessons like this in terms of deciding what is important. If you really look at him, he has spent almost all his life teaching people, so I think it will be his greatest heritage.