[the first few pages]
Warren Buffett sits down at the microphone as he usually does, dressed in a suit and holding a diet Coca Cola. The sea of people in front of him had been waiting for several hours, some even camped out overnight, in anticipation of Buffett’s impromptu event.
Over a month ago he had been seen abruptly leaving a board meeting and rushing off in an ambulance to his local hospital. He hadn’t been seen or heard from for weeks. Naturally, the news industry speculated about Berkshire Hathaway succession plans. For years everyone had assumed it would be one of his chief investors, either Greg Abel or Ajit Jain.
But just two days ago both Abel and Jain announced they had agreed on a farewell settlement with Buffett and would be starting their own investment firms. The news was shocking. For over a decade now Buffett had been under heavy pressure to finalize his succession plans. Last year he mentioned Abel and Jain as obvious top candidates and most assumed it would be one of them, so their recent departure notices sent shockwaves through the financial world. News outlets, online forums, and taxi drivers alike speculated as to what would happen next. And what exactly was Buffett’s health status? Some demanded he make his intentions knows, others fought for his right to privacy and to prioritize his own health first.
Then yesterday Buffett issued a press release saying he had been released from the hospital and would be hosting a special event the next day. In wry Buffett style, he wrote:
To the Shareholders of Berkshire Hathaway Inc,My letter this year is short and to the point, as any good business pitch should be.I have been released from the hospital and am in good health. Well, good enough health to write. And good enough health to report that Berkshire enjoyed an annualized return of 27% this year, far beyond the S&P500’s 12%. As always, focus on operating earnings (see below).This year's shareholder meeting will take place tomorrow 6pm local time in Omaha City Park. It will be broadcast live so feel free to tune in.As for the event itself, the first 10,000 people will be allowed entry. No reservations, no fees, no press passes. Must be 18+ years old.I apologize for the short notice but time is-a-wastin' and it's about time I announce my successor.Charlie and I feel good about the company's position and we are confident Berkshire will continue to outperform for decades to come, whether or not I am writing this letter. Tomorrow I will show you just how confident how I am.Berkshire Hathaway's next CEO will be in attendance at tomorrow's meeting. Five contestants will be chosen from the audience to participate in a special challenge, and the winner will be the CEO.Think Willy Wonka meets an MBA crash course meets The Apprentice / Survivor. Only my name isn't Willy, it's Warren. This will be my last annual Woodstock for Capitalists. Here's to going out with a bang! Warren Buffett
Chairman of the Board
Wild speculation ensued over Buffett’s next move and there was feverish demand to be one of the 10,000 event attendees. Flight sold out in minutes, car rentals and nearby hotels soon followed. From around the world, both Buffett loyalists and opportunists alike scrambled to make their way to Omaha, Nebraska in mid-west USA, home of the heralded ‘Oracle of Omaha’ Buffett, for the chance to take over the $600 billion company he built up from a small textiles business.
Buffett taps the microphone and complete silence descends among the crowd. Everyone turns to face the podium.
Buffett inspects the audience and notes a delightful melting pot of ethnicities and socio-economic levels. Good, exactly as he intended with the location and short notice. He notices several large tents set up behind the seating area, presumably of the richer folk, and further in the distance he sees smaller tents, some makeshift, presumably the more average joe type.
The richer crowd are fairly noticeable. American tech billionaires, Arab sheiks of oil money, African princes of precious metals, Eastern Asian businessmen. The stereotypes were laughably accurate. Buffett notes this group makes up roughly one third of the audience, recognizes no one from previous years’ meetings, and shrugs. Rich people who smell an opportunity to get richer. Who was he to try to change the course of history? He wasn’t anti-rich. He was quite rich himself, after all.
The second third are the typical attendees — loyal Berkshire shareholders, Buffett enthusiasts, and investors worldwide. Most of this group wear clean dark suits or business casual clothing.
The third group is a hodgepodge of people positioned directly in front of the podium. From doctors, to farmers, to truck drivers — all Americans who lived within a few hours of Omaha. While people of means were able to secure expensive travel and fly in from around the world on a moment’s notice, Buffett wanted to make sure there would be room for the average American. This group excited him the most.
Buffett taps the microphone again, assures it’s on and working, and begins to speak:
Thank you all for coming today. I am as excited as ever to talk to you about the good work we do here at Berkshire. This year we will dispense with the usual horse and pony show and focus on one thing and one thing only: who will be my successor. I will select five of you to come up here for a panel of sorts with the crowd. One of you will be eliminated by the conclusion of today’s meeting, and the remaining four will continue on. Any questions?
Dead silence. The crowd had been transfixed to Buffett’s every word and it took them a moment to register he was no longer speaking.
Three excruciatingly slow seconds pass before a hand shoots up from the crowd. Buffett nods in that direction.
“How will you choose the candidates?” the voice asks quietly.
Buffett smiles. The voice came from the third group of average Americans.
Great question. I’m looking for those who are sharp but humble, quick on their feet and decisive, someone brave with integrity, who’s not afraid to ask questions, someone who will lead by example. You demonstrated some of those qualities just now. You were the first to act, only after politely raising your hand, and you asked the most pertinent question under discussion. You are candidate #1. Come on up here!
Gasps erupt among the crowd and general applause follows soon after as everyone turns to watch the lucky first candidate walk up to the podium. The candidate looked shocked and took a moment before moving an inch, then timidly made their way up to the front.
Buffett smiles warmly at Candidate #1, gestures to the row of five seats nearby, and turns to the microphone:
Now, for the remaining four candidates. Here’s how it’s going to work…