Warren Buffett stunned a packed arena of shareholders Saturday with an announcement few expected: He plans to retire at the end of the year.
The 94-year-old investment icon said he will recommend Greg Abel to succeed him as CEO of Berkshire Hathaway, marking the first time Buffett has publicly set a timeline for stepping down.
“I think the time has arrived where Greg should become the chief executive officer of the company at year-end,” Buffett told the crowd.
Abel, long seen as Buffett’s heir apparent, already oversees all of Berkshire’s noninsurance businesses. While his future role had been clear, many believed he wouldn’t take the reins until after Buffett’s death. Until now, Buffett had repeatedly said he had no plans to retire.
Buffett announced the news at the end of a five-hour question-and-answer session and didn’t take any questions about it. He said the only board members who knew this was coming were his two children, Howard and Susie Buffett. Abel, who was sitting next to Buffett on stage, had no warning.
Many investors say they believe Abel will do a good job running Berkshire, though it remains to be seen how well he will invest the company’s massive cash pile. Buffett also endorsed Abel Saturday by pledging to keep his fortune invested in the company.
“I have no intention – zero – of selling one share of Berkshire Hathaway. I will give it away eventually,” Buffett said. “The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg’s management than mine.”
Thousands of investors in the Omaha arena gave Buffett a prolonged standing ovation after his announcement, recognizing his 60 years at the company’s helm.
CFRA Research analyst Cathy Seifert said it must have been difficult for Buffett to make the decision to step down.
“This was probably a very tough decision for him, but better to leave on your own terms,” Seifert said. “I think there will be an effort at maintaining a ‘business as usual’ environment at Berkshire. That is still to be determined.”
Earlier Saturday, Buffett warned about the global consequences of President Donald Trump’s tariffs, telling shareholders that “trade should not be a weapon” but adding, “There’s no question that trade can be an act of war.”
Buffett said Trump’s trade policies have raised the risk of global instability by alienating other nations.
“It’s a big mistake, in my view, when you have 7.5 billion people who don’t like you very well and you have 300 million who are crowing about how they have done,” Buffett said, addressing a topic that dominated early discussions at the annual meeting.
While Buffett said it’s best for trade to be balanced between countries, he doesn’t believe Trump is handling it the right way with broad tariffs. He said the world will be safer if more countries are prosperous.
“We should be looking to trade with the rest of the world. We should do what we do best and they should do what they do best,” he said.
Buffett noted that America has undergone revolutionary change since its founding and the promise of equality, which wasn’t fulfilled for many years. But nothing happening today has shaken his long-term optimism about the country.
“If I were being born today, I would just keep negotiating in the womb until they said, ‘You could be in the United States,’” Buffett said.
Buffett said Berkshire is sitting on $347.7 billion in cash because he doesn’t see many attractively priced investments he understands, but he predicted that one day the company will be “bombarded with opportunities that we will be glad we have the cash for.”
He brushed off recent market turmoil triggered by Trump’s tariff announcement, calling it “really nothing.” Buffett recalled three times in the past 60 years when Berkshire’s stock was cut in half. He cited how the Dow Jones industrial average fell from 240 at his birth in 1930 to 41 during the Great Depression as a truly dramatic decline. Currently, the Dow sits at 41,317.43.
“This has not been a dramatic bear market or anything of the sort,” he said.
Buffett said he hasn’t bought back any Berkshire shares this year because they don’t appear to be a bargain.
Investor Chris Bloomstran, president of Semper Augustus Investments Group, told the Gabelli investment conference Friday that a financial crisis might actually benefit Berkshire by offering opportunities to invest at lower prices.
“I’m sure he’s praying that the trade war gets worse. He won’t say that publicly, but Berkshire needs a crisis. I mean, Berkshire thrives in crisis,” Bloomstran said.
The annual meeting draws roughly 40,000 people, including celebrities and high-profile investors. This year, former Secretary of State Hillary Rodham Clinton was among the attendees. She was the last candidate Buffett publicly supported, as he has since shied away from political endorsements to avoid affecting Berkshire’s business interests.
Haibo Liu even camped out overnight to be first in line Saturday morning. Liu said he was determined to attend his second meeting in case this one is Buffett’s last.
“He has helped me a lot,” said Liu, who traveled from China. “I really want to express my thanks to him.”
Shareholder Linda Smith, 73, first heard of Buffett and Berkshire when she rented a room from his sister, Doris, while in graduate school in Washington, D.C. Doris returned from an annual meeting shortly after Berkshire bought See’s Candies and told her to buy the stock.
Smith couldn’t afford it at the time – the $3,400 price for a single share matched her annual income. But once she got a job, she began saving to buy the stock, which now trades at $809,350 per share.
Over the years, she estimates she has attended about 20 annual meetings, often bringing a friend.
“I really like to listen to Warren Buffett – particularly this year with everything that has happened,” Smith said.
Buffett has said he has no plans to stop working because he enjoys investing too much. He plans to continue until he dies or is incapacitated. Despite using a cane and shortening this year’s Q&A session by a couple of hours, he remains in good health.
“I think even if he dies, these businesses will retain their value,” Smith said, glancing around the 200,000-square-foot exhibit hall filled with booths from Berkshire companies like BNSF Railway, Geico, Pilot Flying J, Duracell and others. “I anticipate my stock going down for a while, but good businesses and good people will come back.”
Still, Smith and thousands of others will miss Buffett’s steady voice after he’s gone. He has now led Berkshire for six decades.
Buffett has long said Vice Chairman Greg Abel, who already oversees all of Berkshire’s noninsurance businesses, will become CEO once he steps down.
Shareholders like Steven Check, who runs Check Capital Management, are not especially worried about succession. Abel is proven, and Berkshire’s companies largely run themselves. Buffett has said Abel might even be more hands-on and get more out of the businesses.
“I think we’ll get a more hands-on manager, and that could be a good thing,” Check said. But he said Abel also knows that those managers enjoy the freedom to run their businesses and Abel isn't going to do anything to turn them off.
