- Daily Zen
Warren Buffett was diagnosed Tuesday with prostate cancer, a development that would probably heighten the questions over his successor as the chief executive of his corporation, Berkshire Hathaway. However, Mr. Buffett has made it very clear that he would continue to run his corporation, writing to shareholders that the disease was in Stage 1 and that he had been told by doctors that it was not remotely life-threatening or even debilitating in any meaningful way.
Buffett Diagnosed with Prostate Cancer
The disclosure of the diagnosis was made just three weeks before Berkshire’s annual meeting, when thousands of shareholders descend upon Omaha, Mr. Buffett’s hometown, and for two days celebrate him as an investing giant.
A diagnosis of prostate cancer at Stage 1 means the disease has been detected at a very early stage and it has not spread beyond the walnut-size prostate gland. According to data from the National Cancer Institute, the 10-year survival rate for men with localized disease is 99.5 percent. Stage 1 prostate cancer is typically found as a result of a prostate specific antigen, or P.S.A., blood test that leads to a needle biopsy. The United States Preventive Services Task Force recommends against P.S.A. screening for men over 75, because even if cancer is detected during screening, its slow nature means the disease is unlikely to kill him and he will die of other causes.
Fierce Speculations on Succession of Mr. Buffett
Succession at Berkshire had been a topic of fierce speculation on Wall Street since long, even as some elements of Mr. Buffett’s plan have already been disclosed. His son Howard will become non-executive chairman of Berkshire, and two former hedge fund managers have been hired to eventually take over the company’s vast investment portfolios. In February, Mr. Buffett told investors that he had selected a successor for chief executive, but he did not name the person.
Whitney Tilson, the managing partner at T2 Partners and a Berkshire shareholder said, “Go to any actuarial table; a healthy, stress-free 81-year-old has a 12-year life expectancy, and I’ll take the over on that”. Still, Mr. Buffett’s letter was a reminder that he would eventually hand over the reins of Berkshire, a sprawling empire of insurers, a railroad operator and scores of other companies.
With over 50-year tenure of Mr. Buffett’s as chief executive, Berkshire has seen itself grow into one of America’s largest corporations, with a market value of nearly $201 billion. Considering that the operations that touch nearly aspect of the nation’s economy, it is sometimes considered a proxy for the business health of the United States.
The leading candidates are thought to be three of the company’s top lieutenants: Ajit Jain, the head of Berkshire’s vast reinsurance operations; Matthew Rose, chief of Burlington Northern Santa Fe; and Tad Montross, the leader of the General Re insurance subsidiary.
Meyer Shields, an analyst with Stifel Nicolaus said, “The risk is not so much who takes over for Buffett. It’s the fact that whoever takes over won’t be Warren Buffett. It will be a step down in perception and in reality”.