Why He’s in the News

At age 96, Warren Buffett announced today that he is stepping down as chairman of Berkshire Hathaway, effective immediately. He will become chairman emeritus and remain a director. His son, Howard Buffett, succeeds him as chairman, while Greg Abel, who became CEO earlier this year, continues to lead the company. [entrepreneur.com], [cnbc.com], [aljazeera.com]

Warren Buffett has been associated with Berkshire Hathaway since taking control of the struggling textile business in 1965 and transforming it over the following six decades into a diversified conglomerate valued at roughly $1 trillion. In his farewell letter, Buffett summed up the reality of succession with characteristic simplicity:“Father Time always wins.” [cnbc.com], [aljazeera.com]

Fun Fact: The Remarkable Power of Time

Here’s a statistic often associated with Warren Buffett that I think perfectly complements today’s story: it is frequently estimated that the overwhelming majority of his personal fortune was accumulated after his 60th birthday.

This underlying observation illustrates something Buffett’s career has long demonstrated: wealth compounded over very long periods can produce dramatically different results than most people intuitively expect.

At 96 years old, Buffett’s life provides an unusually long real-world illustration of the relationship between time and compounding. He celebrated his 96th birthday last month. [entrepreneur.com], [aljazeera.com]

Why We Find It Interesting

Warren Buffett’s story isn’t simply about becoming wealthy. It is also a story about patience, longevity, consistency, and time.

Those themes seem especially appropriate on the day he relinquishes the chairmanship. Buffett spent more than six decades helping build Berkshire Hathaway, and rather than making today’s announcement about himself, he emphasized his confidence in the people succeeding him. [entrepreneur.com], [cnbc.com]

Perhaps that’s a fitting final leadership lesson from the Oracle of Omaha: building something successfully is one accomplishment; preparing it to continue without you is another.

Disclosure

This material is provided for informational and educational purposes only and is not intended as investment advice or a recommendation to buy or sell any security. References to individuals or companies are for illustrative purposes and do not constitute an endorsement. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.