Warren Buffett has resigned as chairman of Berkshire Hathaway, the giant holding company he has controlled since 1965. Greg Abel, a long-standing director, will continue to run the company, while Howard Buffett, Warren’s son, will take over as chairman.
According to local reports, Warren Buffett told shareholders that Greg Abel will run the company, while Howard Buffett will guard its culture and values, which are worth more than anything on the balance sheet.
Warren Buffett is arguably the world’s greatest living investor, with a career spanning over 60 years. He has turned a struggling textile company into a conglomerate valued at $1.1 trillion.
His investment strategy is straightforward, with two main parts: an investment portfolio of quoted companies and a separate group of companies owned outright, mostly in insurance and energy. The company’s investment portfolio is managed based on specific rules.
These rules state that they only buy businesses they understand, identify potential competitors, and ensure competent management. Warren Buffett’s three biggest public-equity holdings, Apple, American Express, and Coca-Cola, all exemplify these rules.
Berkshire Hathaway does not pay dividends, instead funneling all earnings back into the business or using them to buy back shares. This strategy allows the company to benefit from compound interest over a long period.
Warren Buffett has also been prepared to play the cycle, building up cash in times of low value and waiting for prices to come down. Currently, Berkshire Hathaway has $365 billion in cash or Treasury bills, which is about a third of its total market value.
This cash pile has led to criticism, as investors have missed out on the current bull market. However, with the global interest rate cycle turning upwards, Warren Buffett’s cautious approach may soon be vindicated.
Warren Buffett’s investment strategy is centered around buying wonderful companies at a fair price, rather than fair companies at a wonderful price. He has also emphasized the importance of being fearful when others are greedy and greedy when others are fearful.
His approach has turned tens of thousands of shareholders into millionaires, and his folksy aphorisms have become legendary in the investment community. As Warren Buffett steps down as chairman, his legacy as a master investor continues to inspire and educate investors around the world.
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