FRI, NOV 24, 2023

WARREN BUFFETT WATCH

Buffett prepares to pass philanthropic baton to his children

Warren Buffett told shareholders this week his three children, who are between 65 and 70, which is "hard for their father to believe," are the executors of his current will and also the "named trustees of the charitable trust that will receive 99%-plus of my wealth pursuant to the provisions of the will."

He writes, "They were not fully prepared for this awesome responsibility in 2006, but they are now."

That was the year, as detailed in a Fortune article, Buffett started his annual mid-year donations of Berkshire shares to the Bill & Melinda Gates Foundation, as well as a foundation named for his first wife, and three foundations run by his children.

He laid out a schedule in which the number of shares decreases by 5% each year.

Howard, Susie, Warren, and Peter Buffett at the 2011 Berkshire Hathaway annual meeting. (Photo: AP | Nati Harnik)

The announcement about his children's new roles came in comments by Buffett in a Berkshire news release detailing additional Thanksgiving gifts of shares worth more than $866 million to the four family foundations.

1.5 million shares valued at $541.5 million to the Susan Thompson Buffett Foundation, named after his first wife.
300 thousand shares valued at $108.3 million to the Sherwood Foundation, chaired by his daughter, Susan A. Buffett.
300 thousand shares valued at $108.3 million to the Howard G. Buffett Foundation, chaired by his older son.
300 thousand shares valued at $108.3 million to the NoVo Foundation, run by his younger son, Peter, and Peter's wife, Jennifer.

It's the same number of shares as when he started what may become a new holiday tradition last year with donations worth around $759 million, but the value is higher due to a 14.2% increase in the price of Berkshire's B shares since then.

Buffett writes that the three children must "act unanimously" as they administer the charitable trust, which will have a "broad" charter.

"Laws in respect to philanthropy will change from time to time, and wise trustees above ground are preferable to any strictures written by someone long gone."

In addition, the trust will be "self-liquidating after a decade or so and operate with a lean staff."

"After my death, the disposition of my assets will be an open book – no 'imaginative' trusts or foreign entities to avoid public scrutiny but rather a simple will available for inspection at the Douglas County Courthouse."

Bill and Melinda Gates join Warren Buffett at a news conference in June 2006, announcing the Gates Foundation would be getting substantial annual donations of Berkshire stock from the Omaha billionaire. REUTERS/Shannon Stapleton

Buffett's move to put his children in charge of the trust may be bad news for the Gates Foundation.

He told it in 2006 that he was "irrevocably committing to make annual gifts ... throughout my lifetime," but that he would "soon write a new will that will provide for a continuance of this commitment – by distribution of the remaining earmarked shares or in some other manner – after my death."

We don't know if that is still his intention, but it seems notable that the Gates Foundation is not mentioned in Buffett's comments as he gives his children a lot of discretion over the leftover Berkshire shares after he dies.

There have already been suggestions the Gates Foundation contributions could end when Buffett dies.

Last year, The Wall Street Journal reported that the Susan Thompson Buffett Foundation, which supports abortion rights, was expecting it would get the remainder of Buffett's fortune.

Berkshire sells stake in Indian digital payments company

A QR code of Paytm is seen at a mobile repairing shop in Kolkata, India, November 9, 2021. REUTERS/Rupak De Chowdhuri

Berkshire Hathaway has sold its entire 2.5% stake in the parent company of the Indian digital payment company Paytm.

Citing exchange data, CNBC TV-18 reports Berkshire received around $164 million from today's sale, booking a loss of $72 million after investing around $300 million in 2018.

BUFFETT AROUND THE INTERNET

Some links may require a subscription

Wall Street Journal (subscription): Warren Buffett Is Going Big, Not Home, in Japan

Business Insider: Warren Buffett's company has built a record $157 billion cash pile so he can capitalize when the economy tanks, veteran professor Steve Hanke says

The Globe and Mail (Toronto): How to find stocks with an ‘economic moat’

Business Insider: Warren Buffett likes Uber's strong brand and value to customers, his deputy told a leading tech investor

HIGHLIGHTS FROM THE ARCHIVE

How to “keep from ruining your kids” through inheritance (2013)

Warren Buffett explains his views on inherited wealth, giving back to society, and why parents should talk about their will with their adult children.

BERKSHIRE STOCK WATCH

BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Nov. 24, 2023

Berkshire's top holdings of disclosed publicly-traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.

Holdings are as of September 30, 2023 as reported in Berkshire Hathaway’s 13F filing on November 14, 2023, except for:

Mitsubishi and Mitsui, which are as of June 12, 2023. Tokyo Stock Exchange prices are converted to U.S. dollars from Japanese yen.
Occidental Petroleum, which is as of October 25, 2023

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

I want to thank all my nearly 132,000 subscribers for receiving the newsletter. I am grateful to you all. (A special thanks to those of you who actually read it.)

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

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Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

900 Sylvan Avenue, Englewood Cliffs, NJ 07632

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