GOAT since 1965. The man, the legend, Warren Buffett is retiring.

Mr. Buffett was as per usual in fine form at the annual Berkshire Hathaway shareholder meeting on Saturday the second of May 2025.

At the end of the question-and-answer session he announced his retirement at the end of this year.

“I think the time has arrived where Greg should become the chief executive officer of the company at year end”.

He is 94 years old. 

Shareholders responded with a big round of applause for the greatest of all time investor. 

Greg Abel will hope to become GOAT #2. He has big shoes to fill. 

Warren Buffett will stay on as chairman so Greg can still pick his brain for now. 

Berkshire will be firmly under Greg’s management starting in 2026. 

First of all a very big thank you to Mr. Buffett and the good people of Berkshire. 

They have made a not insignificant difference in my family’s wealth. 

I think we got on board the Berkshire Hathaway (BRK-B) train around 1998. 

Warren wasn’t always this popular; at the end of the dot-com bubble in 2000 he was belittled. I topped up my holding around that time. 

Talking about long term investing. My holding period in BRK-B is closing in on 30 years now.

This year is one of the first years I have been selling a significant part of my holding and put it into a S&P 500 ETF instead. 

Mind you betting against Berkshire is usually an expensive mistake.

Another Substack newsletter just brought to my attention how much BRK-B has actually outperformed the S&P 500 over the last five years. 

Berkshire’s shares are up a cool 197% over the last five years.

The SPDR S&P 500 ETF (SPY) is up 103% over the last five years.

My hypothesis that BRK-B’s long term return would be close to the S&P 500 return can go  into the garbage bin. 

I believe that the reduction in the number of shares outstanding by more than 12% since 2020 in Berkshire Hathaway combined with higher earnings has really helped this magnificent performance. 

There was a university prof that said that an individual's share picking skills could only be judged statistically significant after about 70 years. 

Of course Warren started investing when he was still a kid, but he has been allocating capital now for Berkshire since he took control in 1965 for sixty years plus. 

He is fast becoming the living proof that the efficient market hypothesis is bull. 

The company that he built is basically an insurance company that uses the float (money from investment premiums held by insurance companies that hasn’t been paid out for insurance claims yet) to make investments into whatever asset Warren and Charlie fancied most at the time. 

In other words an leveraged investment company with permanent capital. 

Perhaps two factors made the company tick most of all; asset allocation and great insurance results.

Going forward, what is the outlook?

Before the arrival of Mr. Ajit Jain the insurance results were not always that satisfying. 

He was born in 1951. Not exactly a spring chicken anymore either. 

There has been very little talk about him from the chatter after the annual shareholder meeting, but I would say here is another key man risk for BRK-B. 

Berkshire’s success is dependent on an ever increasing amount of float with good insurance underwriting results. 

The second part of the puzzle is asset allocation. The share price dropped 5% after Warren Buffett announced his retirement so that tells us how important the key man risk is here as well. 

Everybody always knew one day the company would have to go on allocating assets without Warren’s input. 

We are not there yet, but that day is coming closer. 

The book “The Outsiders” by William Thorndike (recommended by Mr. Buffett himself) talks about eight super capital allocator CEOs. 

The Teledyne CEO was Henry Singleton. Warren called him the best capital allocator ever. 

When those eight CEOs retired some of their companies started to struggle. 

It takes a lot of personality to ignore the short-term whims and allocate capital for the long term. 

Has Warren Buffett built the company great and robust enough to continue to be amazing?

Time will tell. Thanks for reading, dear reader. 

May the force be with you.

Always make your own investment decisions.

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