Buffett reveals new Berkshire has been chosen
WARREN Buffett has ruled out spinning off Berkshire Hathaway into separate businesses, in his annual letter to investors.
Buffett also revealed a successor has been chosen to fill his shoes and addressed the firm’s stake in Tesco which he previously called a “huge mistake”. This year celebrating the firm’s golden anniversary, Buffett’s highly anticipated 14-page letter reminisced about the company’s 50-year history and speculated on the next 50 and what the future holds.
Buffett lamented his inaction over selling off Berkshire’s stake in beleaguered retailer Tesco, revealing he had already “soured somewhat on the company’s then-management” in 2013, but remained its fourth largest shareholder with a four per cent stake in the supermarket until mid-October. “Our after-tax loss from this investment was $444m, about 1/5 of one per cent of Berkshire’s net worth,” Buffett revealed.
Putting that in context, he said: “In the past 50 years, we have only once realised an investment loss that at the time of sale cost us two per cent of our net worth. Twice, we experienced one per cent losses. All three of these losses occurred in the 1974-1975 period, when we sold stocks that were very cheap in order to buy others we believed to be even cheaper.”
The billionaire investor took time to assure investors he would not spin off any of the conglomerate’s numerous subsidiaries as it “makes no sense”.
The 84-year-old’s successor has been chosen by the Berkshire Hathaway board – yet that person’s name has not been revealed.