Buffett explains his "retirement" decision: starting to occasionally lose balance, and sometimes even forgetting a person's name

Author: Bao Yilong, Wall Street Journal

Buffett admitted that the impact of age ultimately prompted him to decide to hand over the management of Berkshire Hathaway to Greg Abel.

On May 14, Berkshire Hathaway Chairman and CEO Buffett stated in an interview with The Wall Street Journal, "For some reason, I didn't really start feeling old until I was around 90, but once you start feeling old, that change is irreversible."

According to reports, Buffett noticed that he occasionally lost his balance and sometimes had difficulty recalling someone's name. Suddenly, the newspapers he read looked like they were running out of ink. These feelings coalesced into a decision over the past year, and ultimately at the Berkshire annual meeting on May 3, he announced that he would step down as CEO in December, with Abel taking over, a news that shocked the investment community at the time.

Buffett said, "True talent is very rare, rare in business, rare in capital allocation, and rare in almost all human activities. To be honest, it would be unfair not to put Abel in this position (CEO); the longer Berkshire benefits from Abel, the better."

Buffett praised Abel as both a manager and a dealmaker: "The difference in energy levels and the amount of work completed during a 10-hour workday between him and me is becoming increasingly apparent; he is more efficient in completing tasks, managing adjustments, and helping those in need."

62-year-old Abel joined the group in 1999 through Berkshire's investment in MidAmerican Energy, a utility company in Des Moines, Iowa. In 2018, Buffett promoted Abel to Vice Chairman, responsible for all non-insurance businesses of Berkshire. By 2021, he had become Buffett's chosen successor as CEO.

Passing the baton but not retiring: Buffett's version of "semi-retirement"

Buffett emphasized that although his era as CEO is coming to an end, he intends to continue working.

"My health is good, and I feel fine every day," he said, "I'm in the office, I work with people I love, and they like me quite a bit; we get along very well."

"I won't be sitting at home watching soap operas," he said with a laugh, "My interests remain the same."

The Abel era will begin in less than eight months. And when that moment arrives, Buffett will not go far—he plans to continue going to his office in Omaha and remain in the chairman position.

Buffett acknowledged that aging has diminished some of his abilities, but he stated that he still possesses perhaps the most precious and rare talent as an investor: "I have no difficulty making decisions, whether it was 20 years ago, 40 years ago, or 60 years ago when I made decisions. If there is panic in the market, I can still be useful because when prices drop or others feel panic, I am not afraid; this really has nothing to do with age."

Recently, Berkshire's massive cash and Treasury bond reserves have been increasing, drawing attention from the outside world, with people wondering where the company will trade next. Buffett said, "Abel will have ideas about where the funds should be directed."