Choose your heroes very carefully: Buffett’s long goodbye message

Warren Buffett, the 95-year-old who turned a faltering textile mill into one of the most formidable conglomerates in American history, is stepping away.

“I’m going quiet,” Buffett wrote in a letter to shareholders released Monday. He will no longer pen Berkshire Hathaway’s annual report, nor preside over its marathon shareholder meetings. The baton finally passes to Greg Abel, Buffett’s chosen successor.

In classic Buffett fashion, the gesture was both grand and matter-of-fact. The announcement follows Buffett's conversion of 1,800 Berkshire A shares into 2.7 million B shares, worth $1.3 billion, which were transferred to four family foundations. The Susan Thompson Buffett Foundation received the largest share, 1.5 million, while The Sherwood Foundation, The Howard G. Buffett Foundation, and the NoVo Foundation each took 400,000. “They are at their prime in respect to experience and wisdom,” he mentioned in the letter, adding: “It’s time to step up the pace.”

The move, he insisted, was not a prelude to any change at Berkshire: “Greg Abel has more than met the high expectations I had for him.” Still, there was the unmistakable air of closure, after decades of guiding one of the world’s largest companies, that took shape in 1955 following the merger of two Massachusetts textile firms, Hathaway Manufacturing Company and Berkshire Fine Spinning Associates.

But the heart of the eight-page letter is all about Omaha, Buffett’s hometown and his memories growing up. He essayed his childhood days in precise detail: the family doctor who made house calls with a black bag, the Catholic nuns who nursed him through appendicitis, the fingerprint kit from Aunt Edie that led him to ink the hands of his caretakers “in case a nun went bad.” “Omaha was where I was meant to be. Through dumb luck, I drew a ridiculously long straw at birth,” wrote Buffett.

To assuage any investor concern, Buffett reiterated his faith in Abel’s leadership. Abel “understands many of our businesses and personnel far better than I now do,” he wrote. He though cautions future directors to watch for creeping greed, for the “ratcheting” of CEO pay and the envy it breeds.

In true Buffett style. The letter ends thus: “I wish all who read this a very happy Thanksgiving. Yes, even the jerks; it’s never too late to change.”

Reaffirming his faith in the US, Buffett reiterated his long-standing belief “never bet against America” by stating thus: “Remember to thank America for maximising your opportunities. But it is, inevitably, capricious and sometimes venal in distributing its rewards.”

In characteristic fashion, Buffett's closing line is inspiring yet cautionary: “Choose your heroes very carefully and then emulate them. You will never be perfect, but you can always be better.”