It was closing in on 1 p.m. here when Warren Buffett, seated onstage before a rapt audience of about 40,000 at the CHI Health Center, said that he was getting a “5-minute warning.”
To most of those gathered here for the annual meeting of Berkshire Hathaway, his company, it was simply a signal that the annual gathering — known as “Woodstock for capitalists — was drawing to a close. The crowd, a mix of seasoned investors and wide-eyed newcomers, didn’t know they were about to witness a historic moment.
But the second Mr. Buffett mentioned the five-minute warning, I knew something big was coming. For a decade, I had the privilege of sitting on that stage with other journalists, posing questions to him — and for so many years, his late business partner Charlie Munger — on behalf of shareholders and the wider public. He had never noted the time like that before.
Which meant that the large television monitors facing him onstage, which show real-time transcriptions of questions being posed by the audience, were now showing a countdown to words that we all had expected for years, but never knew when they would come.
After 60 years of running the company he has described as his “painting,” Buffett was about to surprise Berkshire investors — as well as his own board and his heir apparent, Greg Abel — that he planned to step down as chief executive at year end. “I want to spring that on the directors,” he said with a smile.
Even before the announcement, unease visibly rippled through the audience section where Berkshire directors and Mr. Buffett’s closest friends sat. (Among those in attendance were Bill Gates, the former American Express chief executive Ken Chenault and Hillary Clinton, with Tim Cook of Apple having left an hour beforehand.) Afterward, some exchanged glances, full of sadness and understanding; others appeared genuinely shocked.
Then, people in the crowd, many of whom were in tears, rose from their seats in a standing ovation for a singular figure in the business world.
Mr. Buffett, who turns 95 in August, is often described as a symbol of American capitalism. In truth, he is an outlier. He is more the conscience of capitalism, willing to speak uncomfortable truths about the system’s ills while others remained silent. (His public comments on issues like tariffs over the weekend are a prime example.)
The billionaire always comes across as a gentleman, and in an age of distrust he has become a trusted figure. Fellow business moguls and government officials admire him because of his success, yes — Berkshire reported $89 billion in net profit last year, and it is one of the biggest buyers of U.S. Treasury bonds — but also because he has appeared unchanged by wealth. He lives in a modest house in Omaha, and for years drove his own car, including to the drive-through at McDonald’s.
He isn’t perfect, something he would acknowledge, and urged his followers to stay humble as he discussed his own investing misses (what he called his “sins of omission”). But that also got to one of his biggest accomplishments, using his annual Berkshire letters and marathon Q&A sessions with shareholders to educate generations about business, investing and life itself.
After the announcement, I was struck by a social media post from someone I wouldn’t have considered to be a Buffett watcher, who perfectly encapsulated the importance of Mr. Buffett and Mr. Munger. “They were the good investors, dealers in reality, patient,” wrote Nick Denton, the founder of Gawker. “When the history of the rise and fall of America is written, one of the chapters will begin in Omaha, with their departure.”
(Mr. Buffett’s plan to step down was only a matter of time once Mr. Munger had died. Those who know the Berkshire chief will tell you how much the loss of his longtime friend has weighed on him. Consider that this year, Mr. Buffett chose not to run the short movie that traditionally introduces the annual meeting, in part because so many of the previous ones featured the two of them.)
But as Mr. Buffett prepares to depart, the big question is: What will happen to his masterpiece once it passes to Mr. Abel?
It has been apparent for several years now that on a day-to-day basis, Mr. Abel is already running large swaths of Berkshire’s operations, so the shift likely won’t be dramatic. But the scrutiny of “Abel’s Berkshire” will undoubtedly increase: The company wasn’t built just as a collection of disparate businesses, but as the vision of one man.
No matter what Mr. Buffett says about his handpicked successor’s qualifications — and he has been unstinting with praise — investors will likely withhold their judgment until they see the results. As Erik Gordon, a professor at the Ross School of Business at the University of Michigan, put it, “Taking over from Buffett is harder than taking over from Superman.”
Mr. Abel has said he will seek to maintain the culture that his boss meticulously built. But things will inevitably become different. Berkshire’s board gave Mr. Buffett an unparalleled degree of autonomy to operate as he saw fit, often learning about significant deals he had struck only after the fact. And Mr. Buffett rarely relied on the legions of bankers, accountants and consultants that are standard advisers to large corporations — it allowed him to move with remarkable speed and decisiveness.
Mr. Abel will have to work hard to earn even some of that latitude, and under him Berkshire is likely to operate with more guardrails. But there is speculation that Mr. Buffett will remain chairman for some period, which could afford Mr. Abel more freedom as he grows into the top job. (Eventually, Howard Buffett, Mr. Buffett’s elder son, is expected to take over as nonexecutive chairman.)
Then there is the question of what happens to the Berkshire annual meeting itself, which each year draws tens of thousands to Omaha for the chance to hear from Mr. Buffett. The event has created a powerful halo effect for the company and its stock, for the city, too, and for Berkshire-owned businesses like NetJets, Nebraska Furniture Mart and the jeweler Borsheim’s. Will Mr. Buffett continue to speak at it? Will shareholders continue to make the pilgrimage if he does not?
As the crowd filed out of the CHI Health Center, past the booths of Berkshire-owned businesses promoting their wares, there was the palpable sense of an era’s end. Mr. Buffett’s five-minute warning had arrived, and the investment world won’t be quite the same.
