{"id":225766,"date":"2025-05-06T00:46:21","date_gmt":"2025-05-06T00:46:21","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/warren-buffetts-exit-proves-weve-been-thinking-about-it-all-wrong\/"},"modified":"2025-05-06T00:46:21","modified_gmt":"2025-05-06T00:46:21","slug":"warren-buffetts-exit-proves-weve-been-thinking-about-it-all-wrong","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=225766","title":{"rendered":"Warren Buffett’s Exit Proves We’ve Been Thinking About It All Wrong"},"content":{"rendered":"


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Over the weekend, Warren Buffett announced that he was going to retire at the end of this year. After 60+ years of running Berkshire Hathaway, Buffett told everyone at the annual shareholder\u2019s meeting that he was to retire at the end of the year and that Vice Chairman Greg Abel should take his place.<\/p>\n

Warren Buffett is 94 years old.<\/p>\n

Like many, I\u2019ve been a fan of Warren Buffett for decades and have read the opening pages of his annual shareholder letters<\/a> for just as long. They\u2019re fantastic because they\u2019re written in plain English, outline his thesis often, and filled with fun little anecdotes and Buffetisms.<\/p>\n

Through that time, I\u2019ve already read the criticisms of him, such as how his investment style was out of touch, but it seemed he never did. And now he leaves Berkshire Hathaway in a strong financial position, nearly $350 billion in cash, and returns that easily trump the S&P 500 over his tenure.<\/p>\n

\n\n\n\n\n\n\n\n
Annual Percentage Change
in Per-Share Market Value of Berkshire<\/th>\n		Annual Percentage Change
in S&P 500 with Dividends
Included<\/th>\n<\/tr>\n<\/thead>\n
Compounded Annual Gain \u2013 1965 \u2013 20024<\/td>\n19.9%<\/td>\n10.4%<\/td>\n<\/tr>\n
Overall Gain \u2013 1965 \u2013 20024<\/td>\n5,502,284%<\/td>\n39,054%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n

(from page 15 of the 2024 letter)<\/a><\/p>\n

For many, retirement is a carrot that is dangled in front of your face to keep you working. Call it a myth, a lie, or any other word\u2026 but it\u2019s to keep you doing something you don\u2019t want to do so you can reach \u201cretirement\u201d when you can start doing what you want to do.<\/p>\n

But here\u2019s what we can learn from someone who was one of the best investors of all time and who retired when he was 94 (or at least declared his intentions to retire):<\/p>\n

\nTable of Contents<\/summary>\n
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  1. When You Love It, You Don\u2019t Need a Carrot<\/a><\/li>\n
  2. It\u2019s Your Life, Do What You Want<\/a><\/li>\n
  3. Being Great for Decades Offers Opportunities<\/a><\/li>\n
  4. Motivation = Autonomy, Mastery & Purpose<\/a><\/li>\n
  5. Retirement Is A Lie<\/a><\/li>\n<\/ol>\n<\/details>\n

    When You Love It, You Don\u2019t Need a Carrot<\/h2>\n

    For all the articles you\u2019ll read about how early retirement is great, one thing they miss is that some people don\u2019t want to retire.<\/p>\n

    It feels good to do what you\u2019re really<\/strong> good at and Warren Buffett is really good at investing!<\/p>\n

    Retirement isn\u2019t a carrot when you love what you do.<\/p>\n

    Very few people can and want to retire in their prime. Famously, NFL great Jim Brown retired in his prime<\/a> and people were shocked. There are stories as to why but ultimately he would move on from the brutal sport to pursue something he could do for much longer \u2013 acting.<\/p>\n

    In sports, the trope is that some people play too long. In a physical endeavor, and one in which they send out a legion of young athletes every year, only the exceptional performers last longer than a few years. Some stay a little too long and the toll on the body and mind is tremendous<\/a>.<\/p>\n

    Given Buffett\u2019s performance, you could argue he\u2019s still in his prime at 94.<\/p>\n

    It\u2019s Your Life, Do What You Want<\/h2>\n

    I don\u2019t know what Warren Buffett\u2019s life is like privately. Yes, I\u2019ve read he has a mistress but that his wife was OK with it<\/a> until she passed. Then he married the mistress. They signed Christmas cards together, everyone seems cool with it, good for them!<\/p>\n

    It\u2019s easy for me to assign my values to his life. I don\u2019t want a mistress. Neither does my wife! Which are two big reasons why we don\u2019t live this way but that\u2019s our life, not his.<\/p>\n

    And one of the most revelatory times in your life is when you realize you are in control and should decide what you want for yourself and the people you care about. Like Neo unplugging from the Matrix.<\/p>\n

    Working until you\u2019re 94 may not be what you want\u2026 but he seemed to enjoy it!<\/p>\n

    It\u2019s his life and what seemed to give him the most energy was being an investor.<\/p>\n

    Being Great for Decades Offers Opportunities<\/h2>\n

    Warren Buffett was so good for so long that he was given opportunities not afforded too many others. And no matter who you are, being asked to a dance feels nice.<\/p>\n

    Courtesy of Trung Phan on X<\/a>, I learned that Warren Buffett was given the \u201copportunity\u201d to try to save Lehman Brothers during the 2008 crisis:<\/p>\n

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    Warren Buffett on the Lehman Brothers 2008 bankruptcy is the most Buffett story ever:<\/p>\n

    \u2013 He was vacationing in Alberta
    \u2013 Lehman contacted his assistant for help
    \u2013 Buffett said \u201csend me a fax and how much\u201d
    \u2013 The fax never came but they left him a voicemail (he only found it one\u2026     pic.twitter.com\/byTWFILlGA<\/a><\/p>\n

    \u2014 Trung Phan (@TrungTPhan) April 30, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

    There are so many great parts of this story (unless you\u2019re Lehman) like him using a flip phone, not checking his voicemail, people looking for a fax, not getting the report and then getting it, printing it out and redlining it, follow by \u201cWe were not in a position to lend.\u201d \ud83e\udd23<\/p>\n

    In the biggest financial crisis in quite some time, imagine being asked to be the backstop. And then saying no.<\/p>\n

    Also, important to note that during this, he did back Goldman Sachs\u2026 who is still around today.<\/p>\n

    Motivation = Autonomy, Mastery & Purpose<\/h2>\n

    Motivation is a funny thing \u2013 sometimes we wake up with a ton of it, sometimes we wake up with none, and it doesn\u2019t seem to make sense as to why.<\/p>\n

    That was until I discovered this fun 11-minute talk,<\/a> given and then animated by The Royal Society for the Encouragement of Arts, by Daniel Pink. In this talk, he explains the three factors that lead to better performance \u2013 autonomy, mastery, and purpose.<\/p>\n

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