Warren Buffet diagnosed cancer

April 19, 2012   ·   0 Comments

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Diagnosis of cancer to Legendary investor, Warren Buffet comes as a shock to the investors and business tycoons. Warren Buffet  revealed to Berkshire Hathaway shareholders in a letter yesterday that he has been diagnosed with stage 1 prostate cancer. Buffett assured shareholders that the condition was not “life threatening or even debilitating in any way,” and that additional tests “showed no incidence of cancer elsewhere in my body.”

 

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The news comes one day after Republicans in the U.S. Senate blocked the “Buffett rule,” a tax on millionaires whose idea was born of a now-famous editorial Buffett wrote in the New York Times last year, saying the rich had an obligation to pay more income tax.

Berkshire shares fell 1.5 percent in after-hours trading following Buffett’s announcement. The widely held Class B shares are up 5.9 percent year-to-date, half the gains of the broader S&P 500. Berkshire stock fell briefly when the announcement was made at the close of the stock market, but it recovered in after-hours trading. Berkshire’s B shares closed at $80.76 in regular trading, up $1.09.

Among the likely contenders, according to analysts, is Ajit Jain, a longtime Berkshire employee who now runs the company’s reinsurance business. Another possibility is Tony Nicely, the chief of Berkshire’s Geico unit. Others include the heads of several of the conglomerate’s businesses, including Burlington Northern chief Matthew Rose and MidAmerican Energy Holdings chief Gregory Abel.

The cancer diagnosis will put pressure on Buffett to reveal the person’s name.

“One of the biggest drags on the stock have been questions about succession,” said Joe Magyer, a senior analyst at the Motley Fool. “This definitely pours gasoline on the fire. Even if Buffett comes out perfectly healthy, it’s going to be a monkey on the back of the stock for a long time.”

Wrote Buffett in February “Your Board is equally enthusiastic about my successor as CEO, an individual to whom they have had a great deal of exposure and whose managerial and human qualities they admire. (We have two superb back-up candidates as well.) When a transfer of responsibility is required, it will be seamless, and Berkshire’s prospects will remain bright. More than 98% of my net worth is in Berkshire stock, all of which will go to various philanthropies. Being so heavily concentrated in one stock defies conventional wisdom. But I’m fine with this arrangement, knowing both the quality and diversity of the businesses we own and the caliber of the people who manage them. With these assets, my successor will enjoy a running start. Do not, however, infer from this discussion that Charlie and I are going anywhere; we continue to be in excellent health, and we love what we do.”

 

But he is not slowing down much. Fortune writer Carol Loomis, a long-time friend of Buffett’s who helps edit his annual letter, reported on Tuesday that Buffett was out on the town one day after his diagnosis, having dinner with the (unrelated) entertainer Jimmy Buffett.

The only major change in his schedule? He skipped his regular Monday night online bridge game, Loomis said.

 

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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