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Abel: Berkshire’s tradition and values ‘stay unchanged and can proceed into perpetuity’
In his first letter to Berkshire Hathaway shareholders, new CEO Greg Abel did not attempt to emulate Warren Buffett’s folksy, conversational writing type.
He did, nevertheless, emphasize he will not be making main adjustments to the way in which the corporate has operated for many years underneath Buffett’s management.
On the prime of his letter, Abel known as Buffett “arguably the best investor of all time,” and acknowledged that “Warren is clearly a really exhausting act to comply with.”
Berkshire Vice Chairman Greg Abel speaks with shareholders throughout the Berkshire Hathaway Inc. annual shareholders’ assembly, in Omaha, Nebraska, U.S., Could 2, 2025.
Brendan McDermid | Reuters
Abel wrote that final month, he “despatched a letter to our workers to emphasise that Berkshire’s cultures and values stay unchanged and can proceed into perpetuity.”
“We’re dedicated to strengthening the nice legacy” constructed by Buffett and Charlie Munger, “guaranteeing it endures via our dedication to excellence.”
Abel mentioned Munger’s remark on the 2021 annual assembly that “Greg will preserve the tradition” will “ceaselessly resonate with me” as a “reminder that our tradition is our most treasured asset, a name to take care of what defines Berkshire, and a problem to make sure our tradition continues.”
No change on buybacks or dividends
Any traders hoping Abel could be extra particular about standards for buybacks did not get satisfaction.
His sentence on the topic may have been written by Buffett himself: “We’ll purchase again Berkshire shares once they commerce under our estimate of intrinsic worth, conservatively decided, guaranteeing that repurchases improve per-share worth for persevering with homeowners.”
There have been no buybacks throughout the fourth quarter, extending a streak that goes again to Could 2024.
Abel additionally upset any shareholders hoping he would possibly reverse Buffett’s longstanding opposition to utilizing a few of Berkshire large money pile to pay a dividend.
“Our strategy to money dividends continues to be that Berkshire is not going to pay dividends as long as multiple greenback of market worth for shareholders in all fairness more likely to be created by every greenback of retained earnings.”
No ‘retreat from investing’
Abel vowed to take care of Buffett’s “fortress-like stability sheet, guaranteeing Berkshire’s basis isn’t compromised.”
Calling the money Berkshire’s “dry powder,” he acknowledged there’ll “undoubtedly be incremental alternatives to deploy our proprietor’s capital with out compromising Berkshire’s resilience. My position is to make sure our liquidity ranges and capital deployment stay intentional and deliberate.”
“Many occasions in Berkshire’s historical past, some observers have instructed that our substantial money place alerts a retreat from investing. It doesn’t. We proceed to judge many alternatives and can stay affected person and disciplined in pursuing the precise ones for the good thing about our homeowners.”
Greg Abel speaks throughout the Berkshire Hathaway Annual Shareholders Assembly in Omaha, Nebraska on Could 3, 2025.
CNBC
Berkshire nonetheless has a number of money
Berkshire’s general money decreased 2.2% within the fourth quarter to $373.3 billion as of December 31.
Excluding BNSF’s money and subtracting T-bills payable, it elevated 4.1% to $369.0 billion.
Working earnings fell 29.8% from final yr’s fourth quarter, coming in at $10.2 billion. Insurance coverage underwriting was down 54%, insurance coverage funding revenue fell 25%, whereas BNSF gained 5.3% and manufacturing, service and retailing edged 3.3% larger.
Ajit, Kraft, and the who’s working the portfolio
Abel praised Ajit Jain’s “judgment and disciple” over 4 a long time however did not present any clues on who might in the end succeed him as Berkshire’s insurance coverage chief.
He additionally gave no indication on whether or not Berkshire nonetheless plans to scale back or eradicate its stake in Kraft Heinz now that its new CEO shelved plans to separate the corporate in two, saying solely the return “has been nicely wanting satisfactory.”
Abel did affirm the accountability for Berkshire’s fairness portfolio “in the end resides with me as CEO,” with Ted Weschler persevering with to handle about 6% of the investments, together with these beforehand overseen by Todd Combs who left in December for a brand new job at JPMorgan.
Warren Buffett and Greg Abel walkthrough the Berkshire Hathaway Annual Shareholders Assembly in Omaha, Nebraska on Could 3, 2025.
David A. Grogen | CNBC
New additions to annual assembly Q&A
There will likely be some new faces becoming a member of the Q&A classes on the firm’s shareholder assembly on Could 2 in Omaha.
Abel and Jain will do the morning session as could be anticipated, however the afternoon session will embody Abel, BNSF’s Katie Farmer, and Adam Johnson, who runs NetJets and is president of client merchandise, service, and retailing, a new place created late final yr.
Early critiques
In an electronic mail to Warren Buffett Watch, Gabelli Funds portfolio supervisor Macrae Sykes praises Abel for protecting all of Berkshire’s main segments within the letter, saying he “confirmed humility” and “expressed readability in communication and confidence in his position as the brand new CEO.”
He additionally likes the inclusion of Farmer and Johnson in a Q&A. “Good to see the delegation of communication obligations and emergence of management past Greg and Ajit.”
Christopher Davis of Hudson Worth Companions tells me we could also be seeing “the primary ‘Abel Rule’ added to the Berkshire playbook,” a desire for rapid full management of personal companies it acquires.
He cites Abel’s remark that whereas Berkshire first invested in Pilot in 2017, its capability to handle it was contractually delayed till 2023. “That mistake is not going to occur once more.”
Davis additionally thinks Abel saying the corporate might buy massive blocks of shares from main holders “when the chance presents itself,” helps his thesis there will likely be a “very massive buyback program” of Buffett’s shares after he dies “as his youngsters put the cash to work in philanthropy.”
Famous Berkshire analyst sees a decade of 10% to 12% annual returns
Bloomstran believes Abel could also be extra aggressive with Berkshire’s money than Buffett has been.
“It is probably that Berkshire underneath Greg Abel’s management will commit a big portion of immediately’s outsized money reserves at materially larger returns than are presently being earned on U.S. Treasuries.”
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HIGHLIGHTS FROM CNBC’S BUFFETT ARCHIVE
Remark is ‘coaching in itself’ to be Berkshire’s CEO (2006)
Warren Buffett explains why his successor, who he anticipated would come from inside Berkshire, wouldn’t want any formal coaching.
AUDIENCE QUESTION: How do you practice your successors? What do you inform them? How do you summarize to them what’s essential to you? …
WARREN BUFFETT: We wish managers to hitch us who consider within the type of operation now we have, a partnership with shareholders, a lifetime dedication to the companies. We wish these individuals to hitch us.
We wish what they see after they be part of us to underscore the values now we have. So every part we can we hope is according to what most individuals would name a “tradition” at Berkshire.
So the written phrase, what they see, what they hear, what they observe. And that’s coaching in itself.
It is the identical type of coaching you get as a baby. I imply, you — if you find yourself within the dwelling and also you’re studying one thing on daily basis by the conduct of those terribly essential individuals, these large individuals which might be round you.
And a house has a tradition. A enterprise has a tradition. To some extent, a rustic can have a tradition. And we attempt to do every part that is according to that. We attempt to do nothing that’s inconsistent with that.
And, consider me, in the event you’re a brilliant Berkshire supervisor — and they’re brilliant — , they purchase into it to start out with, they see that it really works, , and it would not require formal classes or mentoring or something of the kind.
I imply, in the event you speak to our Berkshire managers, you’ll discover that they suppose persistently with how, in impact, Charlie and I believe.
There are many individuals that do not, they usually do not be part of us…
The great factor about it’s our tradition is so well-defined that there aren’t many errors, when it comes to individuals getting into it or behaving in a method inconsistent with it.
So I believe that — I do not suppose there’s any formal coaching obligatory…
CHARLIE MUNGER: At headquarters, we aren’t coaching executives. We discover them. They usually’re not exhausting to search out.
, if a mountain stands up like Everest, you do not have to be genius to acknowledge that it is a excessive mountain.
BERKSHIRE STOCK WATCH
BRK.A inventory worth: $757,000.00
BRK.B inventory worth: $504.95
BRK.B P/E (TTM): 16.15
Berkshire market capitalization: $1,089,124,099,188
BERKSHIRE’S TOP EQUITY HOLDINGS – Feb. 27, 2026
Berkshire’s prime holdings of disclosed publicly traded shares within the U.S. and Japan, by market worth, primarily based on the newest closing costs.
Holdings are as of September 30, 2025, as reported in Berkshire Hathaway’s 13F submitting on November 14, 2025, aside from:
The complete record of holdings and present market values is on the market from CNBC.com’s Berkshire Hathaway Portfolio Tracker.
QUESTIONS OR COMMENTS
Please ship any questions or feedback in regards to the e-newsletter to me at alex.crippen@nbcuni.com. (Sorry, however we do not ahead questions or feedback to Buffett himself.)
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Additionally, Buffett’s annual letters to shareholders are extremely beneficial studying. There are collected right here on Berkshire’s web site.
— Alex Crippen, Editor, Warren Buffett Watch