Warren Buffett Says He Has Prostate Cancer
Updated from 5:32 p.m. ET to include statistics about prostate cancer survival .
NEW YORK ( TheStreet) -- Warren Buffett has stage I prostate cancer.
"The good news is that I've been told by my doctors that my condition is not remotely life threatening or even debilitating in any meaningful way," Buffett wrote in a letter disclosing the illness to Berkshire shareholders.
"I received my diagnosis last Wednesday. I then had a CAT scan and a bone scan on Thursday, followed by an MRI today. These tests showed no incidence of cancer elsewhere in my body. My doctors and I have decided on a two-month treatment of daily radiation to begin in mid-July. This regimen will restrict my travel during that period, but will not otherwise change my daily routine."
The revelation of the disease -- though one of the more treatable forms of cancer when caught early, and common among older men -- brings to the forefront all the questions and fears about succession planning at Berkshire Hathaway. The market has used any sign of succession instability at Berkshire as a reason to sell shares in the past, and shares dropped by close to 2% in after-hours trading after the letter was released on Tuesday.
Buffett has played his succession cards close to his vest, only writing in his annual letter to shareholders that the board of directors of the company knows who he recommends as his successor. Recently, Buffett hired two hedge fund managers to run portions of his investment portfolio. In fact, the hiring of hedge fund manager Todd Combs, which caught the market by surprise, also had the unintended effect of reminding investors that succession planning was an unresolved issue at Berkshire, and shares sold off on that headline.
A good reason for Buffett's lack of detail on his succession plan became apparent last year when the former head of Berkshire's MidAmerican Energy, David Sokol -- widely viewed as the front runner for Buffett's job -- had to resign after revelations that he had traded in shares of Lubrizol, a company he recommended to Buffett as an acquisition. The current short list bandied about in the press since Sokol's resignation includes Ajit Jain, the head of Buffett's reinsurance business; Tony Nicely, the head of Geico, and Matthew Rose, the head of Burlington Northern.
The broader issue for shareholders of the company is that Berkshire's vast empire spans financials, utilities, the housing market, consumer goods, and a huge railroad in Burlington Northern, though Buffett has well-regarded top lieutenants for most portfolio flagships, and the managers of wholly owned Berkshire subsidiaries have always had wide latitude in running their businesses.