Warren Buffett announces retirement by the end of 2025, marking the exit of an era

The Last Farewell of a Legend

Warren Buffett announced that he will step down as the CEO of Berkshire Hathaway, a position he has held for nearly 60 years, by the end of 2025. On May 3, during the annual shareholders' meeting held in Omaha, Nebraska, he shared this news calmly and signaled the start of a new era. Known as the 'Sage of Omaha' to global investors, he has built public trust through a long-term perspective based on a value investing philosophy, rather than following short-term trends in the stock market. His retirement is viewed not merely as a transfer of management but as a symbolic turning point in American capitalism and global financial history. Despite being 94 years old, Buffett has continued to make management decisions actively. However, through this retirement announcement, he revealed the reason for his natural exit, stating, 'It wasn’t some magic moment I just felt that I was getting old at some point.' This decision reflects a thoughtful judgment to prepare for his departure and to pass the company on fully to the next generation.

The background and significance of the retirement announcement

This retirement is not a short-term decision, but the result of long-term preparation. Buffett has already named Greg Abel, who has been responsible for Berkshire Hathaway's non-insurance business, as his successor in 2021. Since then, he has continuously delegated authority to Abel, creating a stable succession atmosphere both inside and outside the organization. The official announcement was all that remained for the 2025 shareholders' meeting. Even after stepping down from the CEO position, he plans to maintain his role as chairman of Berkshire Hathaway. Along with this, he emphasized that he will 'never sell the company’s stock,' expressing a strong commitment to maintaining the company’s management stability and long-term vision. He also plans to continue his daily commute to the Omaha headquarters and focus more on charitable activities, including asset donations through the Giving Pledge. Buffett's decision is seen as a move that considers both continuity of management and social responsibility. Although he will step back from management, it also signifies his intention to maintain an indirect influence on the company and society. As an entrepreneur, a wealthy individual, and a philanthropist, Buffett leaves behind the message that he is not stepping away.

Succession structure and organizational transition

With Warren Buffett's retirement, the greatest attention has turned to his successor, Greg Abel. Abel, a Canadian, has managed Berkshire's core subsidiaries in the energy and utility sectors for a long time. He has been regarded similarly to Buffett for his deep understanding of the real economy, practical management skills, and cautious and restrained leadership style. Since being appointed as the successor in 2021, he has gained Buffett's and Charlie Munger's (Buffett's longtime partner) trust by participating in key investment decisions and accumulating experience in leading internal management processes. Notably, Buffett stated, "Greg understands our culture and systems better than anyone," emphasizing that he feels completely at ease with the transfer of management authority. During this retirement process, Abel has restrained from making external statements and has expressed his commitment to maintaining the existing management style, conveying the message to the market that "Berkshire after Buffett" will be sustainable without drastic changes. Under Abel's leadership, there is a high likelihood that Berkshire will prioritize strengthening existing businesses rather than pursuing large-scale mergers and acquisitions, maintaining a conservative investment strategy.

Market Reactions and Symbolic Shock

After Warren Buffett's retirement announcement, the market reacted quickly. Following the retirement announcement in early May, Berkshire Hathaway's stock price fell by about 9% over five weeks. This is in stark contrast to the approximately 6% increase in the S&P 500 index during the same period. This is interpreted as a result of the market's judgment that it could no longer expect the symbolic trust known as the 'Buffett premium.' Investors had relied on the fact that 'Warren Buffett is at the helm' as a basis for trust, going beyond short-term financial performance. The value investing philosophy he pursued has become a standard for sound judgment, unwavering even in times of crisis. Therefore, his departure has led to the symbolic loss of part of Berkshire's identity. In this regard, Jamie Dimon, CEO of JPMorgan Chase, remarked, 'Warren Buffett was one of the most moral and balanced leaders in American capitalism. His very presence was the moral center of the market.' This suggests that, beyond mere corporate performance, the ethics and social responsibility of management are critical pillars of corporate value.

Berkshire After Buffett and the Change of Era

Berkshire Hathaway's retirement is not just a change for one company. It marks a turning point in American capitalism and signifies the end of the era of value investing based on 'rational greed.' Buffett's greatest legacy is not his vast wealth or numerous mergers and acquisitions, but his principled approach to management, centered on human trust in a market of uncertainty and volatility. Berkshire Hathaway currently holds cash and cash-equivalent assets amounting to approximately $347 billion. This represents both a tremendous opportunity and a burden in the context of a changing global investment environment. The Abel administration must provide the market with answers on how to allocate this immense liquidity amid complex variables such as the restructuring of technology-driven industries, sustained high interest rates, and geopolitical uncertainty. Throughout his life, Buffett has repeatedly advised investors to 'be fearful when others are greedy, and be greedy when others are fearful.' This is not just a simple adage but a philosophy gained from decades of real-world experience. Now, it is up to his successor to inherit this philosophy and apply it to the new environment.

Conclusion: The End of an Era, The Beginning of a New Generation

Warren Buffett's retirement is not just a change of CEO, but signifies the end of an era. His management philosophy and human leadership have long influenced investors, executives, and policymakers around the globe. He has not only demonstrated how to make money but also how to handle it, the process of building trust, and the philosophy of realizing social responsibility within corporations. The void he leaves is considerable. However, at the same time, the path his philosophy has paved is clear. How Berkshire continues after Buffett and how the next generation of entrepreneurs faithfully follows and expands upon that path will be a critical turning point for the future market. Warren Buffett may have stepped down, but the beliefs and principles he left behind are still alive, serving as the most valuable legacy for the next generation.