jakiro
During the U.S. stock market on Monday (November 10), Berkshire Hathaway released Warren Buffett’s latest donation decision and a letter from him on its official website.
Today,Warren E. Buffett converted 1,800 Class A shares into 2.7 million Class B shares in order to donate those Class B shares to his family’s four charitable foundations: Donated 1.5 million shares to the Susan Thompson Buffett Foundation and 400,000 shares each to the Sherwood Foundation, the Howard G. Buffett Foundation and the NoVo Foundation.The donations were delivered today and are worth more than $1.3 billion.
The shareholder letter is as follows:
To my fellow shareholders:
Starting this year, I will no longer write Berkshire’s annual report, nor will I give lengthy speeches at annual shareholder meetings.As the British say, I’m going to “go quiet.”
——Well, that’s right.
Greg Abel will take over as CEO at the end of the year.He is an excellent manager, a tireless worker, and an honest communicator.I wish him a long term in office.
I will continue to talk about Berkshire with you and my children through my annual “Thanksgiving Letter.”Berkshire’s individual shareholders are a special group of people who enjoy sharing their wealth with the less fortunate.I cherish this connection.Allow me to reflect a little on this year, talk about how I plan to allocate my Berkshire stock, and finally say a few thoughts about career and life.
-
Review and Gratitude
As Thanksgiving approaches, I feel both amazed and grateful that I am still alive at the age of 95.When I was young, I never expected to live this long.In 1938, I almost died.
In Omaha at that time, hospitals were divided into “Catholic hospitals” and “Protestant hospitals.”Our family doctor, Harley Hotz, was a friendly Catholic who made house calls with a black bag.He called me “Little Captain” and the charge was not high.
One day I had a severe stomachache and Dr. Hotz came to see me and said I would be fine the next morning.Later he had dinner and played a few rounds of bridge, but he remained uneasy about my symptoms.Late at night, he sent me to St. Catherine’s Hospital for emergency appendix surgery.For the next three weeks, I felt like I was in a monastery, and I quite enjoyed this “lectern” life.The nurses and nuns all liked me, and I was talkative (even then).
Madsen, my third-grade teacher, asked each of his thirty classmates to write a letter to me.I may throw away letters from boys, but I read them over and over again from girls.Being in the hospital has its rewards.
The most unforgettable thing is that my aunt Edie gave me a professional fingerprint set.I immediately fingerprinted all the nuns who cared for me.My “theory” at the time – which was absurd, of course – was that one day a nun would commit a crime and the FBI would discover that they hadn’t taken the nun’s fingerprints.J. Edgar Hoover was a national icon at the time, and I imagined he would come to Omaha to view my collection in person.
Of course not.Ironically, it turned out that I should have taken Hoover’s fingerprints – he would later be ruined for abusing his power.
That was Omaha in the 1930s.The most desired gifts for children back then were a sleigh, a bicycle, a baseball glove or an electric train.
-
The People and Fate of Omaha
I have to start with Charlie Munger, my best friend for 64 years.In the 1930s, Charlie lived just a street away from my current home.
In 1940, he worked in my grandfather’s grocery store, earning $2 for 10 hours (frugality is in the Buffett family’s genes).I also worked there the following year, but we didn’t meet for the first time until 1959.
Charlie settled in California after graduating from Harvard Law School, but he has always said that Omaha shaped his life.For over sixty years, he was my best teacher and “elder brother.”We had disagreements but never quarreled.
In 1958, I bought my first and only house, and I still live there.Two miles from my childhood home, two blocks from my in-laws’ home, and a seven-minute drive from the office where I work.
Another Omaha native is Stan Lipsey.He sold the Omaha Sun to Berkshire in 1968, and I later sent him to Buffalo to save the Evening News there.He made the annual loss-making newspaper return more than 100%.
Stan’s house was five blocks from mine, and his neighbor was Walter Scott, who later sold MidAmerican to Berkshire and served as a director for many years.Walter was a philanthropic leader in Nebraska whose impact was felt throughout the state.
And Don Keough, who lived 100 yards across from my house in 1959.He was a coffee salesman and later became president of Coca-Cola and a director of Berkshire Hathaway.In 1985, after the launch of “New Coke” failed miserably, he bravely apologized in a public speech and reinstated Original Coke – and sales subsequently skyrocketed.His speech remains a classic.
Like Don and Charlie, I am from the Midwest, a warm, outspoken, true American.
Later there were Ajit Jain and Greg Abel, both of whom lived within a few blocks of Omaha toward the end of the last century.It seems Omaha’s water does have some magic.
-
Back to Omaha
I lived in Washington for several years when I was a teenager, and then went to New York in 1954, thinking I would die there.I was under the care of Ben Graham and made many friends.But a year and a half later, I returned to Omaha and never left.
All three of my children grew up and attended public schools here.My father, my first wife Susie, Charlie, Stan Lipsey, the Blumkin family (who ran Nebraska Furniture Mart), and Jack Ringwalt (who sold National Indemnity to Berkshire) all graduated from the same high school.
-
luck and life
I learned a lot from being in Omaha.This is the place that shaped Berkshire and me, and our fortunes.The heart of America is a great place to start a business, live and raise a family.
My family’s longest lifespan record was 92 years old, and I broke it.Thanks to the wonderful Omaha doctors who saved my life several times.
But old age requires good luck – avoiding banana peels, car accidents, lightning strikes and other accidents every day.Lady Luck is extremely unfair and often favors those who are already lucky.
I was born in the United States in 1930, healthy, smart, white, male – thank you, Lady Luck.My sisters are just as smart but don’t have the same opportunities.
-
Facing aging and the future
“Father Time” will not let anyone go.Sooner or later he will win.Although my movements have slowed and my vision has deteriorated, I still go to the office every day.
However, my longevity also requires that the inheritance distribution must be accelerated.My three children are 72, 70 and 67 years old.I hope to have them direct nearly all of my philanthropic legacy while they are still healthy and clear-headed.
I will hold on to some Class A shares until shareholders feel as comfortable in Greg as they are in Charlie and me.That won’t be long.
My children have wisdom, experience, judgment, and compassion.They will outlive me and be more flexible to tax or charity policy changes.I never wanted to “reign after death.”
-
About Berkshire and Greg
Just because I’ve accelerated my charitable giving doesn’t mean I’m any less confident about Berkshire’s prospects.Greg Abel was exactly what I expected back then.He understands our business and employees and is a great learner.
I don’t think there is any CEO in the world who is better suited to manage our company and our shareholder capital.Hope he lives a long and healthy life.
Berkshire will be bigger and more stable in the future, but occasionally the stock price will drop 50%.Don’t panic, America will rebound and so will Berkshire.
-
final advice
I am more satisfied with the second half of my life than the first half of my life.Don’t beat yourself up over past mistakes – learn a lesson and move on.Choose the right role models and imitate them.
Remember the story of Alfred Nobel: the man who misread his own obituary and was so frightened that his life changed.You don’t have to wait for that surprise—decide now how you want to be remembered.
Greatness is not money, fame or power, but good deeds.Kindness is priceless.
Cleaners are just as human as the chairman.
Happy Thanksgiving to you all—yes, even the haters; it’s never too late to make amends.Be grateful for the opportunities America provides, even if the rewards are not always distributed equitably.
Choose your role models and strive to be like them.You’ll never be perfect, but you can always get better.
