Warren Buffett Says He's 'Playing in Extra Innings'

Warren Buffett is addressing something he doesn’t often talk about: His mortality.

The 93-year-old chairman and CEO of Berkshire Hathaway, kicked off the holiday season as he frequently does, giving away a chunk of his fortune to charities. Buffett donated roughly $870 million to four family-run foundations in late-November. (Last year, his donations to the four foundations were valued at $750 million.)

These pledges supplement the lifetime pledges he made in 2006 that will continue until his death. That opened the door for Buffett to discuss the future a little in his comments to shareholders: “At 93, I feel good but fully realize I am playing in extra innings,” he wrote.

The Susan Thompson Buffett Foundation, named after his wife, was the primary recipient, with Buffett awarding it some 1.5 million shares of Berkshire Hathaway stock. Another 900,000 shares will be split among The Sherwood Foundation, The Howard G. Buffett Foundation and NoVo Foundation, three charities run by his children.

His children (who are between the ages of 65 and 70), Buffett noted, will be the executors of his will as well as the named trustees of charitable trust that will receive over 99% of his wealth. And any decisions they make must be unanimous.

“They were not fully prepared for this awesome responsibility in 2006, but they are now,” he wrote.

Buffett plans to give away all of his Berkshire shares through annual gifts. In 1986, he famously told Fortune his three children would receive “enough money so that they would feel they could do anything, but not so much that they could do nothing.” The current schedule for the share giveaway, he has said, will be completed 10 years after his estate is settled.

While the comments were largely tied to his charitable trust, Buffett also addressed the future of Berkshire Hathaway, perhaps seeking to prematurely calm investors whenever his time comes.

“Berkshire – one of the largest and most diversified companies in the world – will inevitably encounter human errors in judgment and behavior,” he wrote. “These occur at all large organizations, public or private. But these mistakes are unlikely to be serious at Berkshire and will be acknowledged and corrected. We have the right CEO to succeed me and the right Board of Directors as well. Both are needed.”

In the short term after his passing, Buffett noted that Berkshire’s path is unlikely to change much, since it will be supported by his holdings. As the new executive team begins to navigate the markets, he said the company will “earn whatever reputation it deserves.”

Buffett has an investing philosophy that’s different than many other traders. He tends to hold onto the stocks he buys for long periods. When he sells, it can move markets. His overarching philosophy is buy what you know.

"Never invest in a business you cannot understand,” he once said. "You have to learn how to value businesses and know the ones that are within your circle of competence and the ones that are outside."

Buffett currently has a net worth of $121 billion, according to Bloomberg’s Billionaire’s Index, making him the world’s ninth richest person. His note encouraged investors to keep believing in his company long after he is gone.

“Decay can occur at all types of large institutions, whether governmental, philanthropic or profit-seeking,” said Buffett. “But it is not inevitable. Berkshire’s advantage is that it has been built to last.”

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