Warren Buffett Steps Down: The End of an Era for Berkshire Hathaway

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3:33So during the salad oil scandal, there was all this negativity around American Express and the stock went down quite a bit. I think it was 50 or 60%. And he ended up loading up like 40 % of his portfolio at the time in the stock. And what I found cool about that is that he... I love this podcast because it crushes your dreams of getting rich quick. They actually got me into reading stats for anything. You're tuned in to the Investing for Beginners podcast. Led by Andrew Sather and Dave Ahern. Step-by-step premium investing guidance for beginners. Your path to financial freedom starts now. Starts now.

4:18All right, folks. Welcome to Investing for Beginners podcast. Today, we're going to talk about some news so well, and we're going to talk about what we learned from the news and from this person. But before we dive into that, we want to share with you that we have created a survey. We want to improve our podcast and we would like you to help. We want to make it more useful and beneficial for you. And so we created a survey that we would like you to fill out. To encourage you to fill out, we are offering the first 100 respondents will get a free coffee cup and a coaster, along with being entered to win a$500 Amazon gift card.

4:59That would come in handy at Christmas time, would it not? You must be 18 or older to fill out the survey and other conditions will apply. You can find the link in the show notes, einvestingforbeginners.com slash pod survey. And again, that will be in the show notes. So please, when you have a moment, fill that out. We would love that. And you get a coffee cup or a$500 gift card. So well worth your time. What are we going to talk about today? We're going to talk about the fact that today we live in a world where Warren Buffett is no longer the CEO of Berkshire Hathaway. As of today, when we're recording this, January 1st, 2026, Warren Buffett has stepped down from Berkshire Hathaway as the CEO.

5:43and to, I guess, commemorate that. Andrew and I thought we would talk about some of the things that we've learned from the Buff Dog through our investing journey. So Andrew, I guess maybe share any thoughts you have on him stepping down and maybe one of the first things that you learned from the Buff Dog. Amazing, amazing legacy. Just very cool how every year, year after year, you'd have an annual meeting and they would answer questions for hours and hours. And they didn't have to do that. So it's really cool that they knew, Charlie and Warren knew, people looked up to them, people respected their investing abilities, and they were willing to share their time when they didn't have to.

6:31And so that was amazing that they did that for so long.

6:38There's so many, so it's hard to pick. but one that really just jumps out at me is he's in Nebraska and he doesn't do the whole Wall Street thing and he whoops Wall Street. How cool is that? Before I really got into investing and even heard of Warren Buffett, I just assumed you had to be a Gordon Gekko. So you had to be born first off in the correct skyscraper, in the correct little district, vicinity. And you had to have the perfect parents and you had to have the perfect everything if you wanted to be very successful with the stock market. And Warren Buffett showed that actually you can do the exact opposite.

7:26You can be intentionally so far away from all the noise and all the hustle and bustle. and you can intentionally forge your own path and intentionally look at the stock market in a way different way than everybody else does and actually, maybe unironically, lead you to have way more success than so many other people do trying to play a game that we shouldn't be trying to play. So I just found it immensely inspiring and approachable that, you know what, if this guy in Nebraska, this friendly guy in Nebraska is able to do so well with the stock market. And then the things he says are very common sense and it's not super finance, gibberish, techie things.

8:12It's common sense stuff. That to me instantly made me feel like, you know what, maybe I can do it too. And that is such a big thing that I don't think he gets enough credit for. Doesn't. I wholeheartedly agree with that. That is one of his superpowers. And I think that's also one of the things that makes him so appealing is that he is not connected to Wall Street. And so you don't get the same car salesman-ish feeling that you can sometimes get from Wall Street and how people would react to things that happen at Wall Street. Yeah, he made you feel like every man. Like, okay, we can do this. I don't need to go to an Ivy League school.

9:00I don't need to come from, I don't have to have millions to invest. I can start and I can do this and I can build wealth for myself. And yeah, I agree with that. Along with that, something that I learned from him that I think is probably unappreciated is his power of doing nothing. The ability to, I think Charlie probably We said it to sit on your butt and not do anything is one of the hardest things to do in investing. We all feel like we have to be active, trading, doing things. And I think a lot of people forget that not doing something is an action. Choosing not to invest, choosing not to react to the noise, the news, constantly buying and selling things.

9:50That is an action to not do anything. And if you look at the large portion of his success is the fact that he has sat on his hands and not done things not too long ago during the pandemic when the market was, you know, everything was red, everything was down. The expectation was that Buffett was going to pull out the elephant gun and was going to be buying, you know, spending a whole lot of money to buy things that were on sale. And when that 13F came out and we found out that he didn't do anything, there was a lot of negativity around him. People were like, oh, Buffett's lost it. He didn't do anything.

10:33How could he not take advantage of this? That's just part of the way he invests. He operates on his schedule, not the market's schedule. And I find that really refreshing. And it's a lot of ways freeing. So you don't feel like you have to march to the rhythm and beat of what Wall Street is doing because that's a pretty frenetic pace. And there's a lot of chaos and craziness that goes on with it too. And it just feels too chaotic for me. And so I think the way that Buffett does it in his mindset has always felt very freeing to me and kind of refreshing, like jumping into a nice cool bath after taking a hot run kind of thing.

11:16So that's something I definitely learned from him. Yeah. And I think he knew it. And he seemed to have structured his life very strategically in a way where he could put himself in the best chances to double down on those strengths of his. He mentioned he never read analyst reports. Like, just give me the 10K. Give me the source material. I don't need to hear what somebody who is probably very influenced by the other people around him think about a certain company. And that's just what he did. One of the things he did, which I think you have to have a certain level of, I guess,

12:07it's maybe not possible for everybody to be this way or to find success in this way. But he said no to so many things. I think I remember him saying something about that. All the things he said no to allowed him to focus on what he was good at, which was learning about these businesses and really mastering and keeping the long-term in mind. I think he knew what he was doing. It's obvious, right? He's talked about it. But he had not only had the idea in his mind of how he was going to be different, but he also structured his life differently than everybody else. And I think it helped pronunciate his advantages.

12:57And that played out in a lot of his investments. Yeah, it certainly did. Yeah, it certainly did. I think one of the things that I learned from him was this idea of having a circle of competence and trying to kind of play within that circle of competence. One of the things that's kind of nice about being a retail investor is that we don't have to chase the hot stock. We don't have to chase the returns. We don't have to chase the craziness that goes on in the market because we're not a fund manager. We have the ability to follow our curiosity and learn about things that we're interested in as opposed to, oh, I got to invest in airlines, so I'm going to have to go learn about airlines.

13:49And if you don't have any interest in learning about airlines, and it's something that doesn't interest you and it doesn't really fall within your circle, you don't have to invest in it. And I think the fact that you can, to your point, say no to a lot of different things, I find gives me a lot of freedom to, I guess, explore my curiosity. Things that I'm interested in, Andrew may not necessarily be interested in and vice versa. But that allows each of us to follow our path and find things that will work for us as individual investors. And I think that that is one of his hallmarks of success is that he didn't stray from what he knew and what he felt comfortable with.

14:39And again, going back to Andrew, he said no to a lot of different things. We only can guess at the opportunities that he has been presented throughout his investing life because of his reputation, his returns, and just the sheer amount of money he's sitting on. I'm sure he's had lots of opportunities that we never knew about. And the fact that he was able to say no to those and stay true to his circle, I think speaks volumes to his character as well as what he was trying to teach us as individual investors. Now, I know people are, oh, he bought Apple. That's a tech company. Well, yes, but he also has said the reason why he bought it was because he understands customer behavior.

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18:33Check it out at einvestingforbeginners.com slash 60. Yeah, that's a good one. What else comes to mind for you? um well i didn't necessarily learn it from buffett but i certainly felt like uh he was he was the one uh out um i guess you know spreading the word and that's the idea that mr market is uh a crazy person and that he's kind of he's kind of our servant not our guide and that we need to approach the market as Ben Graham described it, basically a psychotic. And that we need to stay within our circle of competence, understand what drives us to buy or sell things, and to basically try to learn to ignore the noise.

19:30Wall Street is going to show you a lot of noise. If you watch CNBC, you're going to see a lot of that noise. Interesting tidbit. I heard a story about Buffett yesterday. Somebody was asking Becky Quick, who was the woman who's interviewed him probably the most. And she asked his secretary if he ever watched CNBC, the stock market news. and she said in the 30 or 40 years that she worked for him, not to her knowledge, she said he would turn it on, but he would leave the sound off just because he wanted to see if there was any big news, but he never listened to it. So to me, that really kind of speaks volumes to how he was trying to ignore what Mr.

20:17Market is trying to serve up to him every day. And that was something that I definitely learned from him. I read it from Ben Graham first, but I definitely learned to respect it from Buffett. That's cool. I feel like one of the great ways he demonstrated that early in his career was his purchase of American Express. During the salad oil scandal, there was all this negativity around American Express and the stock went down quite a bit. I think it was 50 or 60 % and he ended up loading up 40 % of his portfolio at the time in the stock. And what I found cool about that is that he knew the business.

21:03So already from a logical perspective, I'm sure he had it mapped out in his head. Like, this is how I think this could play out and what the real risks are to the business. But there's also stories that have floated around saying that he went to different restaurants to see if people were still using their American Express cards. and I love that idea of it's just like there can be so much noise and panic and people on Twitter and people in the YouTube comments and all these different places where people say this company is toast or this company is old or whatever and your opinion doesn't matter like what actually matters is the customers what customers is that company serving?

21:55And are they even aware of whatever Wall Street drama is going on with the company? And is it, more importantly, is it changing their behavior? Are they still using the products and services like they used to? Or has it made their behavior change? So Buffett didn't just logically say, yeah, the business will be fine, and then made the purchase. He went to verify by looking at what are the customers actually doing. And so just a great way of, I think, double checking your assumptions, right? But then also just not letting all the random opinions of other people who don't matter cloud your judgment.

22:41And that's the kind of thing you need to have the conviction to make big moves like that. And I think it's so cool that he stuck to his guns like that. And it obviously worked out for him. It certainly did. Yeah, it certainly did. I guess along the lines of what that experience with American Express was, I think the only reason, one of the reasons why he was able to take advantage of that was because he knew the company so well. And he was able to really, I guess, leverage that knowledge to what he was experiencing out in a real world to help him make a decision that the noise that you were hearing was just offering an opportunity.

23:28And I think the thing I learned from him kind of related to that is this idea of gathering knowledge, reading, learning. uh you know there's all kinds of quotes about buffett and reading and and you know to paraphrase some of them you know the only way to the only way to get knowledge is to read 500 pages a day now whether or not he actually said that or not i can't i haven't been able to verify that but i have seen that quote floating around on the on the interweb uh or whether or not that's true or not what is true is that he would read six seven eight hours a day and he was primarily reading some news and mostly company reports.

24:11And he wasn't just reading American Expresses. He was also reading competitors' reports and trying to get any information he could on that company as opposed to just focusing on solely American Express. He was also focusing on the competitors, the industry, maybe tangential industries and how that could impact them. So for American Express nowadays, it would be the travel industry. How is the travel industry faring? And that will have an impact on what happens with American Express. And so he would read all the information around that to give him a full picture of what was going on with the company.

24:51And so as soon as I started learning about Buffett and what he was doing, I remember seeing a black and white picture of him sitting at his desk with a stack of financial reports on the desk, his feet up on the desk and reading a financial report. And that image is still stuck in my head to this day. And it had a big influence on me. And if I wanted to be serious about this investing game, I needed to read. and I needed to start reading financial reports from the company. So that's what I did. I've told the story before, but I picked up the JP Morgan one. It started there.

25:33But note to self, don't do that next time. And for those out there who have not read a financial report, please don't make that your first. But I really learned that reading is the not fastest way, but the surest way to success in investing. The more you can read, the more you can learn. And the more you learn, the more you can make better decisions. And that's what investing is all about. So that's another thing I learned from Buffett. Yeah, good one. What else passed to mind? Moats. He's all about moats. You have any thoughts on moats? Yeah.

26:17he bought Geico that was one of his best buys of all time and one of the things that was cool not only did he so I guess kind of giving a little counterpoint to what you just said not on purpose but he actually took the initiative to go find the the CEO of Geico and spend time with him and ask him all these questions he had about the business. So I thought that's cool too. It showed he's not just a bookworm, but he also, to me, I kind of interpret it as like, do whatever it takes to get where you're trying to go. Take that extra step. So he really took the initiative and did something that I think even would scare some of us today to think like, am I going to randomly cold call a CEO and ask them to explain their business to me.

27:16And it wasn't beneath him to do that. And so that's how he learned about insurance. And eventually that led to him not only buying Geico, but then converting Berkshire Hathaway when his partnership bought that company, converting it, eventually making it an insurance company on its own, and literally living off the dividends of that for decades and decades and decades. So understanding that moat and how strong of a moat insurance businesses can have definitely played a massive role. I mean, is there a better place to be able to have a bunch of capital to allocate than in an insurance business where customers are giving you float ahead of time.

28:07And the way that the insurance company is going to make money is by making investments and taking that income, and that's your profit. So yeah, I mean, a perfect business model for the most suited investor and capital allocator. It's the exact spot you want to be in if you're buying and holding stocks for the long term. And that's how he was able to find himself positioned in. And it was in that search of trying to learn a business and learn its moat, its competitive advantages, that kind of all played into that journey. So it's huge, huge, huge, huge. Not just even from the investing side, but just how it set himself up and shareholders of Berkshire, for sure.

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