Warren Buffett shrugs off health worries
Warren Buffett has worked to reassure shareholders that he's feeling good after his recent prostate cancer diagnosis, and that Berkshire Hathaway is ready to replace the revered 81-year-old investor.
Based on the questions Buffett got from the crowd of more than 30,000 at the company's annual meeting in Nebraska yesterday, Berkshire shareholders are taking him at his word.
Despite the fact that Buffett just disclosed the condition last month, he didn't face the first question about his health until well into the Q&A session.
"I feel terrific. I love what I do," he said. Buffett told shareholders that the survival rates for prostate cancer look so good that he thinks the diagnosis is a "non-event."
It would hardly be the first time that Buffett's assessment would be trusted. Widely known as the Oracle of Omaha, Buffett, 81, is considered the greatest celebrity in investing because of his many profitable decisions. Buffett has said his four doctors caught his cancer early, and it doesn't represent a serious threat to his health. He plans to undergo radiation treatment in July, but the treatment should have little effect on his daily routine.
"I may have a little less energy, but that may mean I do fewer dumb things," Buffett said jokingly.
Still, the diagnosis is forcing shareholders to confront the fact that one day Buffett will no longer be at the helm of the conglomerate, which includes an eclectic mix of companies such as Geico insurance, MidAmerican Energy, the Burlington Northern Santa Fe railroad, Shaw carpet, Helzberg Diamonds, the Nebraska Furniture Mart and Pampered Chef. Several questions dealt with related topics, such as who will replace Buffett when the time comes.
Buffett told shareholders in this year's annual letter that the board has picked someone to succeed him as CEO if the need arises immediately, and it has two backup candidates. But Buffett hasn't publicly identified his successor. During the business portion of the meeting, Berkshire shareholders overwhelmingly rejected a proposal that would have required annual updates on how the company is preparing to replace Buffett.
However, Buffett did address a challenge that his successor may face and talked about the way his successor will approach the job.
One of the first questions of the day was about whether his successor will be able to make the same kind of deals he has, such as the $8 billion Berkshire invested in preferred shares of Goldman Sachs Group and General Electric during the crisis of 2008. Goldman and GE both wanted Buffett's stamp of approval along with Berkshire's money.
"I don't think that every deal I have made could be makeable by a successor," Buffett said.
But Buffett said his successor will still be able to make big deals because Berkshire has nearly $40 billion in cash on hand and is willing to invest large amounts quickly.
Buffett said deals like the ones with Goldman and GE haven't been as important to Berkshire as investing in Coca-Cola or IBM stock or buying entire businesses such as Iscar metalworking and Burlington Northern.
Buffett said his eventual successor will maintain the company's culture and continue to let key managers run Berkshire subsidiaries with little interference. Buffett is known for his hands-off, decentralized management style.
"You do not need to worry about my successor," he said.
Buffett always plays the role of Berkshire's chief marketing officer at the annual meeting by showcasing products made by the company that are on display in the 200,000-square-foot (18,580-square- meter) exhibit hall.
He also fulfilled his annual tradition of eating an iced 'Dilly bar' from the stand of Berkshire Hathaway subsidiary Dairy Queen.