OMAHA, Neb. (Nebraska Examiner) – On Jan. 1, Warren Buffett starts his second retirement.
The first was in 1956, when he returned to Omaha from a year and a half in New York City working for his investment mentor, Benjamin Graham. Buffett planned to quietly earn his fortune using Graham’s investment lessons and his own nerdy ability to spot “cigar butt” companies that had more value than anyone else realized, yielding a few guaranteed “puffs” of profit.
Back then, Warren’s family members and a few friends had other ideas: If you’re doing so well with your own money, how about doing the same with ours?
Investing for friends
His brief retirement ended. He formed some small investment partnerships, a modest start to an unprecedented career of capitalistic success that created a trillion-dollar company named after a defunct textile company whose specialty was making silky linings for men’s suits. No matter that men now rarely wear suits or care about linings.
Nearly 70 years later, Berkshire Hathaway attracts millions of investors, turning thousands of them into millionaires, and brings thousands of them to Buffett’s hometown of Omaha each spring in what is, for other companies, the most mundane of group events: a corporate annual shareholders meeting.
“Looking back I feel that both Berkshire and I did better because of our base in Omaha than if I had resided anywhere else,” Buffett wrote in his letter this fall to shareholders.
It’s not something in the water, as he often speculates lightheartedly. But it’s hard to argue that his story, unmatched in free enterprise history, would have taken the same course elsewhere.
How did it happen?
The early partnerships seemed so odd that mainline financial advisors warned clients away. Buffett bought and sold stocks without telling his investors what he was doing, because he didn’t want others copying his money moves. He simply told his partners at the end of the year what their money had earned.
Most people with money to invest shunned him. No blue-chip stocks? Secret investments? No dividends? Bah!
But some who met him in person believed his investment philosophy and gave him their money to manage, trusting his honesty despite his secret ways. Those who kept their money with Buffett to this day are, as the phrase goes, “comfortable.”
Reporter Robert Dorr wrote the first local story in 1966 about Buffett’s investment success finding those bargain investments, headlined “Investor at 11, Warren Buffett controls $45 million fund at 35.”
Changing approach
Buffett’s investing philosophy changed when he met and spent hours talking with fellow Omahan Charlie Munger, who had moved to California. Through those discussions, Buffett and Munger developed a practice of investing in great companies at reasonable prices, with the idea of big profits over the long term. Buffett had ended his partnerships after running out of “cigar butts,” and many of his investors followed him into Berkshire, his new investment “vehicle.”
Another major turn came when Buffett bought an insurance company, National Indemnity, from Omahan Jack Ringwalt in 1967. Insurance became Buffett’s biggest single business, unleashing a river of cash to invest in a wide range of businesses, from chocolates to electricity to railroads to windmills to couches.
To learn about reinsurance — the business of taking on risks from other insurers — Buffett read Omaha University library books on the subject, a place now known as the University of Nebraska at Omaha. Those library books are still there, but the checkout cards marked with “Warren Buffett” and the dates have long since been replaced by barcodes. He also hired a reinsurance expert, George Young of St. Louis.
When Berkshire’s stock became publicly traded, Buffett had new rules to follow. If he made a big investment in a company, he had to tell everybody. Same thing if he sold shares. His annual report included details about Berkshire’s holdings, which now included some entire businesses.
The mainline investment public took notice, and Berkshire’s shares, previously traded privately here and there, moved to the New York Stock Exchange. News coverage helped prompt thousands of investors, including large index funds, to buy Berkshire shares.
Known beyond investing
The noninvesting public learned about him, too. World’s richest man. Ethical businessman stepping in to solve the Salomon Brothers scandal. Philanthropist who gave away his money rather than setting up a family dynasty. Folksy philosopher who once advised, “Invest in yourself.”
The first Berkshire meeting in Omaha was in the employee lunchroom at National Indemnity. After moving to bigger and bigger venues, the meeting ended up in the city’s largest sports arena.
As the meetings grew, Buffett added a separate in-person session for hundreds of foreign shareholders, because they had traveled so far, answering questions mostly about how he viewed their countries as investment locations. He held annual press conferences for the dozens of reporters who came but forbade cameras until the cell phone took over.
The meeting’s exhibition hall sideshow sold chocolate bars, work gloves, auto insurance, mattresses, plastic ducks, campers, books and other company products. All in Omaha.
In the recent letter, Buffett named the fellow Omahans who helped him along the way. Besides Ringwalt and Munger, who died in 2023 just short of 100 years old, he listed wives Susan Thompson Buffett and Astrid Menks and business friends Stan Lipsey, Walter Scott Jr., Don Keough and the Blumkin family. He praised Omaha’s public school system, attended by his children and many of his grandchildren.
Retirement talk
At the May 2025 meeting, Buffett announced his retirement as CEO and named Vice Chairman Greg Abel to succeed him. He’ll remain as chairman and available for advice but won’t be on the stage at the 2026 annual meeting, May 2.
Shareholders can be assured Buffett still cares about them. After all, his investments have created shares with a market value of $1.08 trillion. These days, Berkshire owns $270 billion worth of stock, lots of it in blue chips. To name just a few of the ABCs, there’s Amazon, American Express, Apple, Atlanta Braves, Bank of America, Capital One, Charter Communications, Chevron, Chubb and Coca-Cola.
Over the past 64 years, Berkshire has accumulated 64 businesses. A few of the better-known: Burlington Northern Railroad, GEICO, Fruit of the Loom, MidAmerican Energy, NetJets, Pampered Chef, Nebraska Furniture Mart, Helzberg Diamonds, Borsheim’s, Johns Manville, Duracell, Brooks Sports and Dairy Queen. He lists them in broad categories: insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, services and retailing.
Not to mention accumulating $380 billion in cash, currently available for investing or purchasing.
Lasting work
Buffett also built a corporate structure that he believes will be a lasting model for Greg Abel and Berkshire’s board of directors. That is, a big insurance arm with steady flows of cash for more investments and purchases.
And there’s this: Through family foundations and the Gates Foundation, Buffett has given away Berkshire shares that today are worth $224 billion. He still has about $150 billion left.
At 95, Buffett wrote that he is finally feeling the effects of age, citing declining balance, hearing, vision and memory, as well as general energy. Years ago, he had charged his three children with telling him if he was losing his “marbles.” But he made the decision himself. Difficulty seeing, especially, is hard to bear when your primary waking activity has been reading.
Buffett wrote that he feels generally good, comes to the office five days a week and works with wonderful people. Take it from a fellow retiree: He’ll find out that whatever course his retirement takes, it’ll be different from his usual job.
His final words to shareholders:
“Remember to thank America for maximizing your opportunities. But it is – inevitably – capricious and sometimes venal in distributing its rewards.
“Choose your heroes very carefully and then emulate them. You will never be perfect, but you can always be better.”
Steve Jordon covered Warren Buffett, Berkshire Hathaway and business for decades at The Omaha World-Herald. He retired in 2018 and lives in Omaha. He wrote “The Oracle & Omaha: How Warren Buffett And His Hometown Shaped Each Other,” now in a commemorative edition.
Nebraska Examineris part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Nebraska Examiner maintains editorial independence. Contact Editor Aaron Sanderford for questions:info@nebraskaexaminer.com.
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