We’re all but certainly about to see an amazing record come to an end. Warren Buffett has a self-imposed goal — increase Berkshire Hathaway’s (BRK.B) net worth per Class A share by more than the S&P 500 over a rolling five-year period — is sure to come to an end. The index’s cumulative total return at the end of September was 48 percentage points higher than Warren Buffett’s $292 billion company.
At age 83, every financial media outlet has riffed on when Warren Buffett is going to hang up his investment tool belt and ride off into the sunset. And of course, he will exit the game eventually.
But the question is increasingly looking to be whether he’s going to go out like John Elway (a champion) or go out fighting till the bitter end when is skills are clearly diminished, a la Brett Favre.
Everyone has an opinion on this subject. Here’s mine:
Go to a Beach?
That’s not Warren Buffett’s style.
Buffett appeared on The Dan Patrick Show on Jan. 22 to discuss his $1 billion bonanza for anyone that create a perfect March Madness bracket, and he told Patrick that as a kid he dreamed about owning the Washington Redskins.
Countless Redskin fans — myself a fanatic since 1973 when Joe Theismann left my hometown Toronto Argonauts to sign with Washington as a third-string QB and occasional kick returner — gasped with anticipatory glee only to be brought back to reality by Buffett’s comments that some rich people buy art, houses, boats, etc., but he buys investments.
That’s not likely to change. A well-known quote of Warren Buffett tell us as much:
“I do what I do because I love to do it, not because I need the money. It’s fun and I surround myself with people I enjoy seeing every day.”
It’s this philosophy that longtime friend and Fortune editor Carol Loomis elaborated on in her 2012 book Tap Dancing to Work, a collection of Fortune articles culled from 46 years of material. In Berkshire Hathaway’s 2004 shareholders letter, Warren Buffett clearly states that the primary job of its directors is to find a successor should he die, become disabled or lose his mind.
That doesn’t leave much of a mystery. He’s in this till the end.
Is Warren Buffett Losing His Touch?
A quick Google search of the phrase “Warren Buffett losing his touch” produces 4,690 results. That’s an incredibly large number of results on a single, mundane subject. Many will view his miss of the five-year rolling return as further evidence that his skills are slipping, or alternatively, that the behemoth of a holding company has become too big to outperform in essence becoming index-like.
Either way, calls for his retirement will likely continue to be heard. But is that fair?