Berkshire After Buffett: Greg Abel Takes the Helm – What Investors Should Know

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Introduction

It feels a bit strange to talk about this, but Warren Buffett, the man many of us look up to for our investment journey, has said he will retire. This news came out at Berkshire Hathaway's yearly meeting in Omaha. It feels like the end of an era, doesn't it?

He has been leading Berkshire for 60 long years, turning it into a huge company. Read about a few interesting facts about Berkshire Hathaway.

Buffett Steps Down - Why?

For a long time, Buffett, who is 94 now, kept saying he enjoys his work too much to retire. So, this announcement at the shareholders' meeting was a bit unexpected for many.

We must also recall that on 28-Nov-2023, Charlie Munger died. Buffett and Charlie Munger knew each other since 1959, but Charlie became a partner in Berkshire only in 1978. Read about the investment style of Charlie Munger.

The people who were there in Omaha gave him a big standing ovation. You can imagine the respect they have for him.

Warren Buffett said in the shareholders' meeting that by the end of 2025, Greg Abel should take over as CEO of Berkshire.

This Abel has been working with Berkshire for a while now, looking after the non-insurance businesses.

Buffett also made it clear that he's not going to sell his shares in Berkshire. He even said he thinks Berkshire will do even better under Abel.

Who is This Greg Abel?

Greg Abel is not a new name in Berkshire.

He's been the Vice Chairman for non-insurance operations since 2018. So, he knows a lot about how things work there.

For many years, people have been saying he's the one who will take Buffett's place. He used to be the CEO of Berkshire Hathaway Energy, so he has experience running big businesses.

Buffett himself has said that Abel is very good at business and can even do some things better than him.

He even compared Abel to Charlie Munger.

That says a lot about Abel's capabilities. People who work with Abel say he's a smart and honest person. He seems to be well-respected within Berkshire.

What Does This Mean for Berkshire & Its Investors?

Now, what does Buffett's retirement mean for Berkshire Hathaway and for the investors?

Well, Abel will likely continue with the same basic principles that Buffett followed.

But, every leader has their own way of doing things. One big thing to watch is what Abel will do with Berkshire's huge pile of cash. It's a massive amount. Since the Trump's Tariff threats or may be before, Buffett/Berkshire has been selling and have now about $347 Billion inc cash.

Buffett has been a bit careful about big investments recently. He is saying, things are too expensive. Maybe Abel will have a different approach. He has a lot of experience in the energy sector, so maybe we'll see more investments in that area.

Also, Abel will be in charge of investment decisions.

Buffett will still be around to give advice, but Abel will have the final say. It will be interesting to see if he sticks to Buffett's value investing style or if he looks at new kinds of companies, maybe even tech companies that Buffett was not so keen on in the past.

Most experts seem to think that Berkshire Hathaway will continue to do well even after Buffett is gone. The company has so many different businesses, and they have a good plan for who will take over. Buffett keeping his shares also shows he believes in the future of the company.

Some people think the stock price might dip a bit when Buffett actually retires, just because of emotions. But the underlying value of the company is still strong.

Buffett's Legacy and Value Investing

Warren Buffett's way of investing, called value investing, has taught so many of us a lot.

He always focused on buying good companies for the long term. He has taught us to look for companies that have a strong advantage, what he calls an "economic moat." He also said it's important to really understand a business before investing in it and to be patient and disciplined.

Buy good businesses at reasonable prices, that was his mantra. And he always looked for honest and trustworthy people to run those businesses.

These principles have worked wonders for Buffett and for many others who followed him.

With Buffett retiring, maybe the way people think about value investing will also change a bit. Some say we need to find new ways to value modern tech companies. But the basic idea of investing in good businesses for the long term? That will probably never go out of style.

Berkshire's success over so many years proves that. It teaches us to be patient, to diversify our investments, and to stick to our principles.

Key Financial Numbers (Just a Snapshot)

Metric	2019	2020	2021	2022	2023	2024
Revenue (Billions)	$254.6	$245.5	$276.1	$302.1	$364.5	N/A
Net Income (Billions)	$81.4	$42.5	$89.8	-$22.8	$89.9	N/A
Operating Earnings (B)	$23.8	$21.9	$27.7	$30.8	$37.4	$47.4
Cash Reserves (B)	$128.2	$138.3	$149.2	$128.6	$157.2	$167.6
Insurance Float (B)	$130.6	$138.0	$146.7	$151.4	$164.0	$171.0
Apple (Approx. Value)	~$72 B	~$120 B	~$164 B	~$116 B	~$174 B	N/A
Bank of America (Value)	~$28 B	~$28 B	~$46 B	~$32 B	~$30 B	N/A

Please note: Some 2024 data was not available in the information I have.

Buffett's Investment Mantras and How to Use Them

Principle	Meaning	Buffett's Example	How We Can Use It
Long-Term Focus	Hold investments for many years, not just for quick profits.	Holding Coca-Cola for decades.	Think about where a company will be in 5, 10, or 20 years.
Economic Moat	Invest in companies that have a strong advantage over their competitors.	Investing in See's Candies because of its brand.	Look for companies that are hard for others to compete with.
Circle of Competence	Invest in businesses that you actually understand.	Avoiding tech companies he didn't understand early on.	Stick to industries and businesses you know.
Patience & Discipline	Wait for the right opportunities and don't make impulsive decisions.	Buffett will hold cash until good investment opportunities come up.	Don't feel pressured to invest all the time. Wait for good deals.
Value Investing	Buy good businesses when they are selling at a fair or cheap price.	Buying GEICO when it was undervalued.	Look for companies that are worth more than their current stock price.
Management Integrity	Invest in companies run by honest and capable people.	Trusting the management of Berkshire Hathaway Energy.	Research the people running the company you are thinking of investing in.

Conclusion

Warren Buffett's retirement is a big moment, but it's also a well-planned transition.

Greg Abel has the experience and the right mindset to lead Berkshire forward.

For us investors, this is a reminder of the timeless principles that Buffett has taught us. By focusing on long-term value and sound investment strategies, we can continue to grow our wealth, no matter who is at the helm of Berkshire Hathaway.

The legacy of the "Oracle of Omaha" will surely continue to guide us for many years to come.

Have a happy investing.