Billionaire investor Warren Buffett announced on Saturday that he plans to resign as CEO of Berkshire Hathaway by the end of the year. This unexpected decision comes as a surprise to many, especially since the 94-year-old had previously expressed no desire to retire. Known as one of the wealthiest individuals globally and a legendary investor, Buffett has transformed Berkshire Hathaway from a struggling textiles manufacturer into a thriving conglomerate since taking the helm in 1965.
A Legendary Journey with Berkshire Hathaway
Buffett’s remarkable journey began with a vision: to acquire undervalued businesses and stocks. His strategic investments earned him the iconic title of the “Oracle of Omaha,” highlighting his roots in Nebraska and his profound impact on Wall Street.
Key Highlights of Buffett’s Investment Career:
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National Indemnity and National Fire & Marine: Acquired in 1967, these companies marked Buffett’s initial foray into insurance investments. The insurance float, or premium money available for investment, has significantly contributed to Berkshire’s growth. By the end of the first quarter, this float reached an impressive $173 billion.
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Strategic Stock Purchases: Buffett has a knack for timing. He invested in American Express, Coca-Cola, and Bank of America during turbulent times. These investments collectively hold a value exceeding $100 billion beyond their initial purchase price, excluding dividends.
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Apple Inc.: Initially cautious about tech stocks, Buffett took a leap in 2016, investing over $31 billion in Apple. He recognized the brand’s loyalty among consumers, leading to a staggering investment value of more than $174 billion before he began to sell shares.
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BYD Company: Following advice from his late partner Charlie Munger, Buffett invested $232 million in the Chinese electric vehicle manufacturer in 2008. This stake has appreciated to over $9 billion.
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See’s Candy: Buffett considers his 1972 acquisition of this candy company a pivotal moment in his career. He paid $25 million, reaping pretax earnings of $1.65 billion through 2011, highlighting the importance of investing in quality businesses at reasonable prices.
- Berkshire Hathaway Energy: Utilities have been a steady profit source. Buffett acquired MidAmerican Energy for $2.1 billion in 2000, which later expanded through acquisitions. Utilities contributed over $3.7 billion to Berkshire’s profits in 2024.
Notable Investment Missteps
Despite his successes, Buffett has faced challenges:
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Berkshire Hathaway’s Textile Business: Buffett has labeled this venture as his worst investment. The textile operation lost money for years until its closure in 1985, although it did provide initial capital for other acquisitions.
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Dexter Shoe Company: Buffett regrets purchasing Dexter for $433 million in 1993, a deal that cost him 1.6% of Berkshire in exchange for a failing business.
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Missed Opportunities: Reflecting on his investment journey, Buffett admitted that some of his biggest mistakes involved deals he didn’t pursue, including early investments in Amazon, Google, and Microsoft.
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Selling Bank Stocks Prematurely: Right before the COVID-19 pandemic, Buffett divested many of his bank stocks, including Wells Fargo and JP Morgan, at lower prices. Both stocks have more than doubled since then.
- Blue Chip Stamps: After taking control in 1970, Buffett and Munger faced declining sales as trading stamps fell out of favor. However, the float generated from Blue Chip was instrumental in acquiring key businesses like See’s Candy.
Warren Buffett’s legacy is a fascinating blend of triumphs and lessons learned. As he prepares to step back from his role, the investment world watches closely to see who will take the reins of Berkshire Hathaway and how it will evolve in the future.
