Warren Buffett steps down at 96: son Howard takes the chair, Abel stays CEO

Warren Buffett, 96, has stepped down as chairman of Berkshire Hathaway with immediate effect, ending 60 years at the top of the company he took over in 1965. His son Howard Buffett, a director since 1993, becomes chairman. Greg Abel, who took the chief executive's job nine months ago, keeps it.

Father Time always wins. He has, however, been generous with me.

That is Buffett in the shareholder letter announcing the handover. Berkshire's Class B shares fell 0.3 percent in premarket trading. The company is worth $1.1 trillion, the only financial firm in a trillion-dollar club otherwise made up of technology companies.

The split that matters

The two jobs are now held by two people, and they are not the same job. Howard Buffett gets the chair, which in Berkshire's design is a guardian role: protecting the culture and the decentralised structure, not picking stocks or running businesses. Greg Abel runs the company and makes the capital allocation calls.

This was the plan Buffett set out years ago, and the market's near-zero reaction says it was priced in. The price-to-book multiple has done the actual moving: from about 1.62 to 1.53 since Buffett announced he was leaving the CEO role. That is the premium investors paid for him personally, being let out slowly.

Why a Pakistani reader should care

Not because you can buy the stock easily. You cannot: the State Bank's framework does not give retail investors here a simple route into US equities, and the Roshan Digital Account is built for Pakistanis abroad.

The reason is the method, which costs nothing to copy and which almost nobody does.

• Buy the business, not the ticker. Buffett bought insurance, railways, utilities and consumer brands he could explain in a sentence. The PSX equivalent is a cement, fertiliser or bank balance sheet you have actually read.
• Hold for decades, not quarters. The KSE-100 closed at a record 170,866 on Thursday, up 1,822 points in a day. Buffett's record was not built on days like that. It was built on not selling during the ones that went the other way.
• Leverage kills. He has said it for 60 years. In a market where the policy rate is 11.5 percent and one-year KIBOR 12.33 percent, borrowing to buy shares means your position has to beat 12 percent before you are level.
• Fees compound against you. Check what a fund's annual charge costs you over 20 years before you check its last quarter.

The number that explains him

Buffett bought his first shares at 11 and was still running Berkshire at 96. The bulk of his fortune was built in the second half of that span, not the first. That is not a stock-picking fact, it is an arithmetic one: he started early, avoided ruin, and let compounding run for decades without interrupting it.

The Pakistani version of that arithmetic is bleaker, because inflation at 11.1 percent eats a savings account. But the principle holds: on our national savings calculator you can see what the same monthly amount does over 10 years against 25.

What changes at Berkshire

Little, on paper. Abel has been running the non-insurance businesses since 2018 and the whole company since the start of the year. Ajit Jain still runs insurance. The decentralised structure, where subsidiary managers are left alone, is the thing Howard Buffett's chairmanship is explicitly there to protect.

The open question is the one Buffett never answered: what Berkshire does with its cash pile when the man who decided that is no longer deciding.