MORE IN BUFFETT WATCH
Another Berkshire director, former Coca-Cola executive Don Keough, is also thinking about the long run. He tells Bloomberg, “When you’re sitting on the board, you’re talking about sustainability of Berkshire Hathaway long-term, the issue of management down the road. The culture he’s built into Berkshire is intense and real and, I think, permanent.”
Buffett, who is 78 years old, has acknowledged to Bloomberg (and others) that the succession question is “the most important issue there is. There’s nothing more important. Nobody knows on any given day where I’ll be the next day.”
Berkshire has identified candidates to replace Buffett as CEO. They all “currently work for or are available to Berkshire and are people in whom I have total confidence,” but Buffett and the company absolutely refuse to name any names.
There’s been, however, no shortage of speculation.
Portions of the Gates and Keough interviews will appear in a Bloomberg TV special about Berkshire Hathaway, airing today (Tuesday) at 5p ET.
Current Berkshire stock prices:
Dollar and gold
The trade deficit induced Buffett to enter the foreign currency market for the first time in 2002. He substantially reduced his stake in 2005 as changing interest rates increased the costs of holding currency contracts. Buffett remained bearish on the dollar, stating that he was looking to acquire companies with substantial foreign revenues. Buffett has been critical of gold as an investment, with his critique being based primarily on its non-productive nature. In a 1998 address at Harvard, Buffett said:
It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.
In 1977, about stocks, gold, farmland and inflation, he stated:
Stocks are probably still the best of all the poor alternatives in an era of inflation – at least they are if you buy in at appropriate prices.
China
Buffett invested in PetroChina Company Limited and in a rare move, posted a commentary on Berkshire Hathaway's website stating why he would not divest over its connection with the Sudanese civil war that caused Harvard to divest. He sold this stake soon afterwards, sparing him the billions of dollars he would have lost had he held on to the company in the midst of the steep drop in oil prices beginning in the summer of 2008.
In October 2008, Buffett invested $230 million for 10% of battery maker BYD Company (SEHK: 1211), which runs a subsidiary of electric automobile manufacturer BYD Auto. In less than one year, the investment reaped over 500% return.
In May 2018, BYD's shares had a substantial fall with a total net investment loss of $9 billion. This was Buffett's worst investment in China
Bill Gates Promises to Help Keep Berkshire Hathaway “Great” After Warren Buffett
Warren Buffett’s good friend and philanthropy partner, Bill Gates, says he’s made a lifelong commitment to protect Berkshire Hathaway’s culture and values after Buffett is no longer running the company.
In an interview with Bloomberg TV, the 53-year-old Microsoft co-founder and Berkshire board member says:
Personal life
In 1949, Buffett was infatuated with a young woman whose boyfriend had a ukulele. In an attempt to compete, he bought one of the instruments and has been playing it ever since. Though the attempt was unsuccessful, his music interest was a key part of his becoming a part of Susan Thompson's life and led to their marriage. Buffett often plays the instrument at stockholder meetings and other opportunities. His love of the instrument led to the commissioning of two custom Dairy Queen ukuleles by Dave Talsma, one of which was auctioned for charity.[98]
Buffett married Susan Buffett (born Thompson) in 1952. They had three children, Susie, Howard and Peter. The couple began living separately in 1977, although they remained married until Susan Buffett's death in July 2004. Their daughter, Susie, lives in Omaha, is a national board member of Girls, Inc., and does charitable work through the Susan A. Buffett Foundation.[99]
In 2006, on his 76th birthday, Buffett married his longtime companion, Astrid Menks, who was then 60 years old—she had lived with him since his wife's departure to San Francisco in 1977.[100][101] Susan had arranged for the two to meet before she left Omaha to pursue her singing career. All three were close and Christmas cards to friends were signed "Warren, Susie and Astrid".[102] Susan briefly discussed this relationship in an interview on the Charlie Rose Show shortly before her death, in a rare glimpse into Buffett's personal life.[103]
Buffett disowned his son Peter's adopted daughter, Nicole, in 2006 after she participated in the Jamie Johnson documentary The One Percent about the growing economic inequality between the wealthy and the average citizen in the United States. Although his first wife referred to Nicole as one of her "adored grandchildren",[104] Buffett wrote her a letter stating, "I have not emotionally or legally adopted you as a grandchild, nor have the rest of my family adopted you as a niece or a cousin."[105][106][107]
His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in comparable companies.[108] In 2008, he earned a total compensation of $175,000, which included a base salary of just $100,000.[109] He continued to live in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500, a fraction of today's value. He also owns a $4 million house in Laguna Beach, California.[110] In 1989, after spending nearly $6.7 million of Berkshire's funds on a private jet, Buffett named it "The Indefensible". This act was a break from his past condemnation of extravagant purchases by other CEOs and his history of using more public transportation.[111]
Bridge is such a sensational game that I wouldn't mind being in jail if I had three cellmates who were decent players and who were willing to keep the game going twenty-four hours a day.
—Buffett on bridge[112]
Buffett is an avid bridge player, which he plays with fellow fan Gates[113]—he allegedly spends 12 hours a week playing the game.[114] In 2006, he sponsored a bridge match for the Buffett Cup. Modeled on the Ryder Cup in golf—held immediately before it in the same city—the teams are chosen by invitation, with a female team and five male teams provided by each country.[115]
He is a dedicated, lifelong follower of Nebraska football, and attends as many games as his schedule permits. He supported the hire of Bo Pelini, following the 2007 season, stating, "It was getting kind of desperate around here".[116] He watched the 2009 game against Oklahoma from the Nebraska sideline, after being named an honorary assistant coach.[117]
Buffett worked with Christopher Webber on an animated series called "Secret Millionaires Club" with chief Andy Heyward of DiC Entertainment. The series features Buffett and Munger and teaches children healthy financial habits.[118][119]
Buffett was raised as a Presbyterian, but has since described himself as agnostic.[120] In December 2006, it was reported that Buffett did not carry a mobile phone, did not have a computer at his desk, and drove his own automobile,[121] a Cadillac DTS.[122] In contrast to that, at the 2018 Berkshire Hathaway's shareholder meeting, he stated he uses Google as his preferred search engine.[123] In 2013 he had an old Nokia flip phone and had sent one email in his entire life.[124] In February 2020, Buffett revealed in a CNBC interview that he had traded in his flip phone for an iPhone 11.[125] Buffett reads five newspapers every day, beginning with the Omaha World Herald, which his company acquired in 2011.
Buffett's speeches are known for mixing business discussions with humor. Each year, Buffett presides over Berkshire Hathaway's annual shareholder meeting in the Qwest Center in Omaha, Nebraska, an event drawing over 20,000 visitors from both the United States and abroad, giving it the nickname "Woodstock of Capitalism". Berkshire's annual reports and letters to shareholders, prepared by Buffett, frequently receive coverage by the financial media. Buffett's writings are known for containing quotations from sources as varied as the Bible and Mae West,[126] as well as advice in a folksy, Midwestern style and numerous jokes.
In April 2017, Buffett (an avid Coca-Cola drinker and shareholder in the company) agreed to have his likeness placed on Cherry Coke products in China. Buffett was not compensated for this advertisement.[127][128]
Health
On April 11, 2012, Buffett was diagnosed with stage I prostate cancer during a routine test.[129] He announced he would begin two months of daily radiation treatment from mid-July. In a letter to shareholders, Buffett said he felt "great – as if I were in my normal excellent health – and my energy level is 100 percent."[129] On September 15, 2012, Buffett announced that he had completed the full 44-day radiation treatment cycle, saying "it's a great day for me" and "I am so glad to say that's over."[130]