Warren Buffett’s farewell letter to Berkshire Hathaway shareholders: ‘I’m going quiet’ - Key takeaways

In his farewell letter to Berkshire Hathaway shareholders on 10 November, Warren Buffett announced that he will stop writing annual reports and speaking at meetings. He reflected on his life, sharing childhood experiences, his time in Omaha, and life after turning 90.

“I will no longer be writing Berkshire’s annual report or talking endlessly at the annual meeting. As the British would say, I’m “going quiet.” Sort of,” he said.

Warren Buffett will step down as the CEO of Berkshire Hathaway by the end of this year, with Greg Abel succeeding him. On 10 November, he converted 1,800 A shares into 2,700,000 B shares to distribute to four family foundations.

Specifically, he allocated 1,500,000 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.

Warren Buffett said he will, however, continue to share Thanksgiving messages with shareholders and others who are interested in reading them. In the most recent letter, Buffett discussed his early life and shared a few personal and business observations.

Here are a few highlights from Warren Buffett's letter —

Life in Omaha

As Thanksgiving nears, the 95-year-old reflected on his life in Omaha and recalled a near-death experience in 1938. After a visit from his family doctor, he underwent an emergency appendectomy, spending three weeks in St Catherine’s Hospital, where he enjoyed the company of nuns.

Warren Buffett remembered his friend, Charlie Munger, who lived a block away from his home. “Charlie had a huge impact on me and could not have been a better teacher and protective “big brother.” We had differences, but never had an argument. “I told you so” was not in his vocabulary,” he said.

Expressing gratitude to Omaha, where Buffett met his wives, had three children and built his business, he said, “Looking back, I feel that both Berkshire and I did better because of our base in Omaha than if I had resided anywhere else. The center of the United States was a very good place to be born, to raise a family, and to build a business.”

Message for his children

Warren Buffett has three children, Howard Graham Buffett, Peter Buffett and Susan Alice Buffett. Sharing an emotional note for his children, Buffet wrote, “I have assured my children that they do not need to perform miracles nor fear failures or disappointments. These are inevitable, and I have made my share. They simply need to improve somewhat upon what is generally achieved.”

What's next?

Buffett said that his children, aged 72, 70, and 67, may not inherit his luck in ageing. To ensure they manage the estate before alternate trustees take over, Buffett has planned to increase lifetime gifts to their foundations.

“To improve the probability that they will dispose of what will essentially be my entire estate before alternate trustees replace them, I need to step up the pace of lifetime gifts to their three foundations,” he wrote.

Buffett's children have three alternate trustees in the event of any premature death or disability. The alternates are not ranked or tied to a specific child.

Additionally, he plans to hold A shares until shareholders become comfortable and confident with Greg. “That level of confidence shouldn’t take long,” he said.

On Greg Abel

Praising the next CEO, Buffett said, “Greg Abel has more than met the high expectations I had for him when I first thought he should be Berkshire’s next CEO. He understands many of our businesses and personnel far better than I now do, and he is a very fast learner about matters many CEOs don’t even consider. I can’t think of a CEO, a management consultant, an academic, a member of government – you name it – that I would select over Greg to handle your savings and mine.”

Final thoughts

Sharing final thoughts in his letter, Buffett said, “One perhaps self-serving observation. I’m happy to say I feel better about the second half of my life than the first. My advice: Don’t beat yourself up over past mistakes – learn at least a little from them and move on. It is never too late to improve. Get the right heroes and copy them.”