There was a rumor online this morning that Buffett announced his retirement today and that Greg Abel and Ajit Jain were jointly at the helm of Berkshire Hathaway. But for now,After verification of Berkshire Hathaway's official website, the major mainstream financial media and Twitter, we have not found any news about Buffett's retirement reported in the market.

Although the news has not been confirmed by the official website, but think of some of the recent misoperation of the stock god, or can not help but make investors wonder whether the stock god is really "too old to eat"?

Is the god of stock getting old? Recently, there have been frequent "rollover".

On the afternoon of Feb. 22, Buffett's Berkshire released its 2019 results, which showed fourth-quarter operating profit of $4.42 billion, down 23% from a year earlier. At the end of 2019, Berkshire had a total market capitalization of $248.027 billion, an acquisition cost of $110.34 billion, a paper profit of $1376.87 and a float of 125 per cent.

In the past few months, however, Buffett has repeatedly "missed" in his operations, especially in airline stocks.

U.S. president Donald Trump said in a speech at the White House on June 6 that Warren Buffett was "right all his life" but made a mistake in selling airline shares.

"Buffett sold airline shares not long ago," Trump said. He has been right all his life, but sometimes even respectable people like Buffett make mistakes. They should keep the airline stock, because the airline stock has already broken the sky today. "

Buffett is one of the most respected investors on Wall Street and is known for his lifelong commitment to value investing. He revealed at Berkshire Hathaway's annual shareholders' meeting in early May that he had cleared all airline stocks and admitted that this was a mistake compared to the investment.

The legendary investor Warren Buffett's decision to sit on the sidelines during COVID-19 's crisis may be due to his old age, said Ken Ken Fisher, founder and CEO of $5.6 billion Fisher Investments, a well-known American fund manager known for his "smelly mouth".

Mr. Fisher said in an interview last week that Buffett, 89, like other prominent investors, has become more cautious as he grows older.

"the reality is that great investors, including my father, lose their edge when they reach a certain age," Fisher said. I'm not saying that Buffett has lost his edge, but throughout history, I can't find an example of people his age not becoming relatively static in a crisis. They became inactive in the crisis. I think that's what Mr. Buffett is. He entered a relatively inactive stage, related to his age. Am I wrong on this issue? Maybe. "

Berkshire is well prepared.

In his latest shareholder letter, Buffett explains why he and Charlie Munger think Berkshire is ready for what happens after his departure. He briefly explained five reasons:

First, Berkshire's assets are deployed in companies large and small, both wholly-owned and partly owned; overall, these companies can earn gratifying returns in the long run.

Second, Berkshire's companies are distributed in different areas, and the merger of its companies into one entity also gives Berkshire an advantage.

Third, Berkshire's financial management is so strict that it can deal with extreme external shocks.

Fourth, Berkshire's senior managers are professionally competent and dedicated. For them, Berkshire is not only a well-paid, respectable job, but also a responsibility.

Finally, Berkshire's directors, the guardians of the majority of shareholders, will not only focus on the interests of the majority of shareholders, but also continue to cultivate this rare corporate culture in large companies. "

Two talented successors

The two are by no means mediocre to be the "Buffett heir".

Greg Abel, who is about to attend the shareholders' meeting with Buffett, was born in Canada in 1961, graduated from the University of Alberta in Canada and was admitted as a certified public accountant (AICPA) in the United States. he is 59 years old.

Like many investors, Abel came from the Big four accounting firm and began his career in the San Francisco office of PricewaterhouseCoopers.

In 1992, Abel joined CalEnergy, a geothermal power company, and seven years later the company acquired MidAmerican Energy under the same name. In the same year, Berkshire Hathaway took a controlling stake in the company.

This is where the intersection of the Abel and Buffett empires began. In 2008, Abel was promoted to CEO of MidAmerican Energy, which officially changed its name to Berkshire Hathaway Energy (Berkshire Hathaway Energy) in 2014.

It is worth noting that under the control of Abel, Sino-American Energy has gradually transformed into one of the largest power producers in the United States, with annual revenues of about $20 billion, generating about 10 per cent of Berkshire's annual revenue.

Behind this, Abel is the greatest contributor. In the eyes of others, Abel regards work as life, has high work efficiency, and is a talented player full of energy.

In 2018, Abel was appointed vice chairman of Berkshire, with overall responsibility for the company's non-insurance business, covering a wide range of local furniture chains to global brands such as Golden King batteries, Fruit of the Loom underwear and DQ ice cream.

Compared with his superb business talent, Abel is much more low-key and rarely interviewed by the media. In 2018, the Fox News camera rarely captured Abel, who was running Berkshire's charity marathon in low-key and inconspicuous clothes. In the face of the media, Abel was very friendly, but only said some irrelevant beautiful words in the interview.

Another successor, Ajit Ajit Jain, is also neck-and-neck. He is 10 years older than Abel and has more life experience.

Ajit Ajit Jain was born in India in 1951 and graduated from the Indian Institute of Technology, a top university, in 1972. He is 69 years old.

After graduation, Jia joined IBM as a data processing business sales, the first year was named "Rookie of the year." Three years later, IBM terminated its business in India, and Jain left IBM and moved to the US the following year to study for an MBA at Harvard University. After that, Jain joined McKinsey to work. In 1982, Jain left McKinsey to join Berkshire Hathaway in the insurance business at the invitation of his former boss.

At that time, Jain knew very little about the insurance business and was mediocre at first. But Jain is a person with super learning ability and never spares no effort in his work. He soon grows up in practice, quickly mastering the business and becoming an expert in the industry.

According to reports, colleagues who work with Jain have said that Jain can always use Berkshire's existing resources to reach the best solution, and act quickly and decisively. Although some people think he is always taking risks, in fact, he has never let his boss expose the company to risks beyond his own.

In 2018, Jain was appointed vice chairman of Berkshire, with overall responsibility for the company's insurance business.

Buffett and Munger have always been green-eyed for Jain. As early as when Jain first joined the company, Buffett was acutely aware that "the company has acquired a rare genius" and joked that "if Munger, Jain and I are going to sink, we can only save one person, just choose Jain."

Munger also valued Jain's performance and even praised that Berkshire's reinsurance business was an important factor in Berkshire's success today, which was officially created "from scratch."

A replica of Buffett?

Before 2020, Buffett was basically equal to the two successors.

In 2018, the two were simultaneously promoted to vice chairman of Berkshire Hathaway. At the shareholders' meeting in 2019, the two men answered shareholders' questions at the shareholders' meeting for the first time, and Buffett spoke highly of both. In this year's shareholder letter, Buffett did not hesitate to praise the two, saying that they are outstanding talents, both as managers and as individuals.

The two are also equal in salary. Prior to his appointment as vice chairman, Jain was in charge of the reinsurance sector and Abel was in charge of the energy sector, both of whom were paid an annual salary of $16 million plus a bonus of $2 million in 2018, according to media reports. The salary of senior executives is determined by Buffett.

In terms of business ability, the two candidates may be neck and neck, but Buffett seems to prefer Abel.

It is widely believed that Abel is more similar to Buffett. He is cautious, quiet, but confident, has killer instincts in business, and likes to laugh and laugh at himself as much as Buffett. Buffett also described Abel as a "rock star".

According to CEO Brad Kinstler, Berkshire's See'sCandy candy company,In some places, there is really no difference between Abel and Buffett.It is reported that Kessler has a close relationship with Buffett and has been reporting directly to Buffett for many years.

In addition to Buffett's preference, age may also be a consideration. Abel is 59 years old, and Jain is 69 years old. although his working ability is still on the charts, it is also a "rare year". In the long run, Abel appears to be more "in the prime of life".

What is certain is that whether it is Jain or Abel, the successors of the Berkshire empire are top-notch.. Buffett once wrote in a shareholder letter, "Jain and Abel are rare geniuses, and they both have the blood of Berkshire."

Perhaps, if you look at the broader picture, Abel is not so much Buffett's overtime as Abel and Jain, the next "Buffett and Munger" of the Berkshire empire.

Early in Buffett's business career

Buffett worked in Buffett-Falk & Co from 1951 to 1954. The company worked as an investment salesman, a securities analyst at Graham-Newman Corp from 1954 to 1956, a partner at Buffett Partnership and Ltd from 1956 to 1969, and chairman and CEO of Berkshire Hathaway since 1970.

In 1950, 20-year-old Buffett had $9800 ($96000 in 2016). After graduating with a master's degree in 1951, Buffett wanted to work at Graham / Graham-Newman, an investment company founded by Graham, but was initially declined by Graham, so he returned to work at his father's securities firm to work in business. Finally, in 1954, he got what he wanted and joined Graham / Newman with a salary of $12000 ($105000 in 2016). Graham is a strict boss and investor and absolutely complies with the value investment law that will be called the Graham principle, which requires a very wide margin of safety (intrinsic value-market price). Buffett thinks it is reasonable, but there are doubts about whether the strict enforcement of the rules will miss some stocks of other value. In 1956, Graham retired and closed the company. Buffett already has $174000 ($1500000 in 2016).

Buffett United Co., Ltd. (Buffett Associates, Ltd.) was established in 1956, which was Buffett's first investment partnership. Buffett offered just $100 as a general partner (general partner), and he asked one of his partners, a doctor, to find ten doctors for $10000 each. The last eleven agreed to contribute a total of $105000 ($840000 in 2016) to join as a limited partner (limited partner). Buffett later founded several partnerships one after another and finally merged into Buffett Partnership Co., Ltd. (Buffett Partnership, Ltd.). Buffett spends almost all of his time running a business except sleep. Buffett thoroughly practiced Graham's value investment philosophy, which grew at an average compound interest rate of more than 30 per cent a year between 1956 and 1969, compared with 711 per cent in the general market. During this period, he mainly adopted the following three modes of investment:

• Value investment: buy securities that meet the Margin of Safety, that is, the stock price is lower than the intrinsic value, while meeting established criteria in terms of return / risk characteristics.

• Carry trade: the occurrence of specific events that have nothing to do with changes in the market, such as mergers and acquisitions, liquidation, etc., to grasp the possible changes in its share price.

• Control: buy a large number of positions, unite with other shareholders, or launch a proxy war in an attempt to influence the company concerned.

Buffett, who did not have much money at this time, followed Graham's value investment, that is, the strict emphasis on "the price is lower than the value", and there were many carry trades, which were very different from the later practice.

Buffett's rich career

In January 1962, Buffett's limited partnership had a market capitalization of $7178500, of which $1025000 belonged to Buffett.

Buffett's limited partnership began buying a stake in Berkshire Hathaway in 1962. Berkshire is a large textile company. Due to the declining industry, the market price of the stock is lower than the company's working capital (working capital). Warren Buffett finally disbanded the partnership and devoted himself to Berkshire's operation. Because of the collapse of the textile industry, Charlie Munger, now Berkshire's vice president, saw the acquisition as a big failure.

Buffett also admitted: "this is a stupid mistake to make history." He also believes that if all the funds had been bought directly into the insurance business at that time, the value would have more than doubled now. However, Berkshire has become one of the world's largest holding companies after Mr Buffett made good use of the company's excess cash to acquire private companies and buy stakes in publicly listed companies. At the heart of Warren Buffett's strategy is the insurance company, which focuses on its huge cash position, the "float", the reserve that insurers must set aside to cover future claims. In essence, this is not owned by the insurance industry, but it can be used to obtain investment income.

Influenced by his good friend and business partner Munger, Buffett's investment style during this period broke away from the Graham principle (completely focused on the price below value) and began to focus on some high-quality enterprises with a lasting competitive advantage. Although the past practice has achieved good results in the early days, with more and more money, Buffett found that it could not be used for huge capital and long-term operations. At this time, Munger's advice helped him.

Buffett recalled: "the advice Charlie gave me was simple: forget your past practice of buying an ordinary business at a good price, and buy a good business at an ordinary price." Buffett didn't want to adopt this approach at first because of his past success. But with Munger's constant reminders and persuasion, this has finally become Berkshire's most important investment philosophy in the future.

Buffett likens these advantages to a "moat" (a degree of monopoly) that allows companies to isolate competitors from a safe distance. Compared with the "commodity" type of companies, due to the lack of differences in the products they sell, they face strong competitive pressure. Coca-Cola Company can be said to be the most typical example of an enterprise with a broad moat. Because even if the taste is similar, consumers are still willing to pay a higher price to buy Coca-Cola Company, rather than try other more ordinary drinks. Investing in such a broad moat has become the most high-profile deed of Berkshire Hathaway, especially its tendency to buy the whole company rather than trading on the open market.

In view of this, Berkshire currently holds a large number of business groups that dominate in different industries, some of which focus on individual niches, otherwise they are bound to have certain characteristics that stand out from their competitors.

Buffett's investment "golden" law

1. Take advantage of the stupidity of the market to make regular investments.

2. The purchase price determines the rate of return, even for long-term investment.

3. Investors will benefit from the compound growth of profits, transaction costs and tax avoidance.

4. Don't worry about how much a company will make in the coming year, just care about how much it will make in the next five to 10 years.

5. Only invest in enterprises with high certainty of future income.

6. Inflation is the worst enemy of investors.

7. The investment concepts of value type and growth type are the same. Value is the discounted value of the future cash flow of an investment, while growth is only a forecasting process used to determine value.

8. The investor's financial success is in direct proportion to his understanding of the investment enterprise.

9. "margin of Safety" assists your investment in two ways. The first is to buffer the possible price risk, and the second is to obtain a relatively high rate of return on equity.

10. It is foolish to own a stock and expect it to rise next week.

Even if the Fed chairman secretly tells me the monetary policy for the next two years, I will not change any of my investments for it.

12. Ignore the rise and fall of the stock market, do not worry about the changes in the economic situation, do not believe in any forecasts, do not accept any inside information, and only pay attention to two points: A. What stock to buy; B. Buying price.

The six elements of Buffett's undefeated stock market

First, make money instead of losing money

Buffett is often quoted as saying: "the first rule of investment is not to lose money; the second rule is never forget the first rule." "because if you invest one dollar and lose 50 cents, you will only have half of the money left, and you will not be able to return to the starting point unless you have a 100% return.

Buffett's greatest achievement was that he experienced three bear markets between 1965 and 2006, while his Berkshire Hathaway lost money for only one year (2001).

Don't be deceived by the earnings

Buffett prefers to measure corporate earnings by return on equity. The return on equity is divided by the net income of the company by the equity of the shareholders. it measures the percentage of the company's profits in the shareholders' capital and can more effectively reflect the profit growth of the company.

According to his value investment principle, the company's return on equity should not be less than 15%. Among the shares of listed companies held by Buffett, Coca-Cola Company has a return on equity of more than 30 per cent and American Express Co 37 per cent.

Third, look at the future

Buffett is called "the Prophet of Omaha" because he is always consciously trying to tell whether the company has a good future and whether it can continue to be successful for the next 25 years. Buffett often says to look forward through the window, not in the rearview mirror.

One way to predict the future of a company is to calculate how much the company's expected cash income is worth today. This is Buffett's way to assess the intrinsic value of the company. Then he will look for companies that seriously deviate from that value and sell at a low price.

Fourth, insist on investing in companies that can form a huge "barrier" to competitors.

Predicting that there are bound to be risks in the future, Buffett favors companies that can pose a huge "economic barrier" to competitors. This does not necessarily mean that the company he invests in must monopolize a certain product or market. For example, Coca-Cola Company has never been short of competitors. But Buffett is always looking for companies that have a long-term competitive advantage and make his predictions of corporate value safer.

One of the reasons Buffett was reluctant to invest in technology stocks in the late 1990s was that he couldn't see which company had enough long-term competitive advantage.

If you want to bet, bet on the big one.

Most value investors are conservative by nature. But Buffett is not. The $62 billion he invested in the stock market was concentrated in 45 stocks. His investment strategy is even more radical than that number. The top 10 stocks account for 90% of his total investment in his portfolio. "this is in line with Buffett's investment philosophy," said Justin Fuller, a senior equity analyst at Morningstar. Don't hesitate, why not invest your money in your favorite investment? "

Be patient and wait

If you change hands in the stock market, you may miss the opportunity. Buffett's principle is: don't change hands frequently until you have a good investor.

Buffett often quotes legendary baseball batter Ted Williams as saying: "to be a good batter, you must have a good ball to play." "if he doesn't have a good investment, he'd rather hold cash. According to Morningstar, cash accounts for more than 18% of Berkshire Hathaway's investment, while most fund companies have only 4% of it.