BRK.B
👑 Warren Buffett will step down as CEO of Berkshire Hathaway on January 1, 2026, with Greg Abel unanimously approved as his successor, marking a significant, planned leadership transition for the conglomerate.
📉 Despite a short-term 5-6% stock price dip following the announcement, Berkshire Hathaway’s financial foundation remains exceptionally strong, boasting $345 billion in cash and over $40 billion in average annual net earnings.
♟️ Buffett will transition to Chairman of the Board, ensuring continued oversight and a smooth handover, while Greg Abel faces the key challenge of effectively allocating Berkshire’s vast capital for future growth, though the company’s operational culture is considered robust.
@invertirdesdecasa:
“Berkshire Hathaway. Well, you already know, Berkshire announced, and in fact, it was approved today, as I was saying, that Warren Buffett will cease to be CEO. He will no longer be the chief executive officer, which in Berkshire Hathaway’s case, is ultimately the capital allocator. Because, again, Warren Buffett today, as you know if you’ve listened to any IDC video or elsewhere where it’s truly understood how Berkshire operates, Warren Buffett doesn’t operationally manage the insurance, train, or energy businesses. Instead, he dedicates himself to allocating capital, either by buying private companies in large quantities, of course, when a lot of capital is deployed, that’s Warren Buffett using the wallet, or in small portions through stocks. Because let’s agree that Berkshire Hathaway has owned, I don’t know, Coca-Cola for I think 30 years. For him, it’s a business. He owns 8 or 9% of Coca-Cola, and it’s as if he had partners for the other 92% because, for him, it’s a private business that generates a lot of money and has done quite well. So, that role of chief executive officer, of capital allocator for acquisitions, purchases, investments, and so on, Warren Buffett will stop carrying it out from January 1, 2026. A small clarification regarding some comments, of course, that the video and other things have generated: Warren Buffett has absolutely no need, believe me, no need at all to manage Berkshire in the shadows or in darkness or behind the scenes, or whatever qualifier you want to use. He has no need. In fact, I believe he’s doing this to make a smoother transition. Secondly, because I think Warren Buffett wants to, because he has already stated in his will that the shares to be inherited, to be distributed, will not be inherited by his children, but by philanthropic foundations, I don’t know if I’m saying it right, charitable organizations. And they will be inherited or distributed over a period of 12 to 14 years so they don’t fall into the hands of institutional investors. Warren Buffett is a chess player and will continue to be one even after he’s no longer around the offices of B there in Omaha. So, personally, I think he’s doing all this to prepare his successor a bit. Tim Cook, for example, in Apple’s case, when Steve Jobs started to get sick, going back and forth, he was already taking the reins until, well, what happened happened, Steve Jobs passed away young, and Tim Cook continued that path. I use this example because Buffett intelligently used this example in the meeting, saying, ‘Well, Steve Jobs created Apple, but Tim Cook was the one who did what he did in the last 14 years.’ So I think we’re going to see this transition. Well, today the market price I think fell 5%, 6%, which is a lot of volatility for Berkshire Hathaway’s market price, which is a rock financially speaking, $345 billion in cash. It’s really an operating business that generates net, we’re talking net after tax, more than $40 billion average, let’s say annually. There aren’t many companies in the S&P 500 that earn that. Not for nothing is it the sixth or seventh most valuable in the world. The only non-tech company trading above a trillion dollars. So, really, Warren Buffett has made a spectacular creation. I don’t think he’s doing this at all to manage it from behind the scenes. It seems quite intelligent on his part. And at the same time, it seems to me that beyond what the market did today, I said this in the video I recorded on Saturday afternoon after the meeting ended, beyond the market, the decision is already made. The transition, I imagine, will take its time, unless it’s accelerated by some natural cause, who could know? Warren Buffett is 94 years old. But it does seem to me, and this is a reading, an opinion, of course, beyond whether Buffett chose his successor or not, and I already talked about this in yesterday’s video, it’s the last video we uploaded to the channel, so you can watch it. If you want to see a bit more of what I’m about to tell you, but Greg Abel was asked a couple of questions at the meeting, and he’s quite, quite serious. I mean, he has a character; you have to manage an operating business of Berkshire Hathaway because it touches many regulators. The energy business is a sensitive business, utilities are very sensitive businesses in the United States. Not to mention insurance, not to mention railroads. I mean, the economy, as Buffett defined it in several annual letters, Berkshire is an artery of the U.S. economy. And he seems to have more than enough character to lead the company. He was asked a couple of questions and responded, ‘This is what’s needed. We need this to protect investors’ capital. We can’t squander it.’ It seems to me Greg is no amateur. We’ll see. Berkshire Hathaway operationally runs itself. We’ll have to see if it can grow at interesting rates. I think that’s the big challenge, allocating all the capital that Berkshire Hathaway has and generates. I think that’s Greg Abel’s biggest challenge, but I believe the culture is there. And well, ultimately, this was what was resolved today. Warren Buffett, I don’t know if I told you, will be Chairman of the Board. This is like a president of the Board of Directors. The Board of Directors is like a body responsible for ensuring that the CEO, the CFO, the COO of companies work in the best interest of investors because the company isn’t theirs. Even though Warren Buffett owns 15-16% of Berkshire Hathaway, I don’t know the exact number, but generally, executive and financial directors may or may not be investors in the companies. It’s better when they are aligned, but the Board of Directors’ function is to tell them, ‘Hey, the company isn’t yours, it belongs to the shareholders, so take care of it.’ So, Warren Buffett will be Chairman of the Board. How is Jeff Bezos today? Very similar. I think that example serves me well. Jeff Bezos is no longer CEO of Amazon, but he is Chairman of the Board of Directors, whom Donald Trump called when Amazon was going to start publishing what the cost of tariffs meant. They told me not to say tariffs, but duties. The cost of duties was going to be published, and since that was politically damaging, Donald Trump picked up the phone. Jeff Bezos is still on the Board of Directors, and in fact, Trump said this, to be clear, I’m not making anything up. In a matter of two or three hours, the issue was resolved. Warren Buffett will have such a stance, auditing that everything goes well, and I imagine also helping the transition to be smooth. News about Berkshire, I think that’s more than enough. You know how I think? You have to give time to a person, a project, a business. You don’t have to be anxious or such a fan of short-term success or failure, saying, ‘Ah, no.’ You have to give time; transitions take time. It seems to me no amateur was chosen.”
Watch the exact part of the video where @invertirdesdecasa talks about Berkshire Hathaway here:
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