Warren Buffett Diagnosed With Prostate Cancer; Will Continue to Run Company
Warren Buffett, the billionaire investor who has built Berkshire Hathaway into one of the most successful and profitable investment firms in history, announced in a letter to shareholders Tuesday that he has prostate cancer.
Buffett, 81, said in his letter that he would continue to lead his company as he has done for 50 years during his treatment. His daily radiation treatments will begin in mid-July, and he stressed that his condition is treatable and that he expects a speedy recovery.
"I feel great – as if I were in my normal excellent health – and my energy level is 100 percent," Buffett said in the letter. "I will let shareholders know immediately should my health situation change. Eventually, of course, it will; but I believe that day is a long way off."
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The announcement prompted two questions: first, what is Berkshire Hathaway's succession plan should Buffett not be able to stay at the helm, and second, why is he seeking to aggressively treat his stage 1 prostate cancer when many doctors do not recommend such treatment.
The "Oracle of Omaha," as he is affectionately known, said in February that the Berkshire Hathaway board had decided on a successor, but failed to reveal the name of the firm's future CEO.
In the February letter, Buffett say the board was "enthusiastic about my successor as CEO, an individual to whom they have had a great deal of exposure and who's managerial and human qualities they admire."
Two names often mentioned are Ajit Jain, a longtime Berkshire employee, and Tony Nicely, CEO of GEICO.
As for his treatment options, there are both aggressive and non-aggressive methods.
Stage 1, the first of four stages of the cancer, is the least severe and affects 1 in 8 men over the age of 70. According to the American Cancer Society, the five-year survival rate for local prostate cancer is close to 100 percent.
"It's a slowly progressive disease," radiation oncologist Sean Collins at Georgetown Lombardi Comprehensive Cancer Center in Washington told Bloomberg. "If someone had a short life expectancy you wouldn't treat them at all. With a 10-year life expectancy, radiation treatment is a rational decision."
More recently, Buffett's headlines have been more political than business when he suggested that those making over $1 million annually should pay a higher tax rate in order to help reduce the nations deficit and get the economy back on track. Just this week, the Senate did not have the votes necessary to pass a millionaires tax hike named after the popular investor.
Buffett has been critical of the current tax code because it allows him to pay a lower percentage of taxes compared to his secretary. President Obama has been championing the issue and is expected to continue to raise the issue, especially since he will probably be facing another wealthy businessman in former Massachusetts Gov. Mitt Romney.
Berkshire B shares rose $1.09, to $80.76, in Tuesday's trading session, but have fallen slightly in after-hours trading.
