Warren Buffett, the 95‑year‑old legend who built Berkshire Hathaway into a $700 billion empire, has stepped down as chief executive. Starting Jan 1, day‑to‑day control passes to long‑time lieutenant Gregory Abel, while Buffett stays on as chairman.
Buffett Leaves the CEO Seat
After more than six decades of guiding the company, Buffett announced his retirement at the annual shareholders’ meeting. He will still visit the office, but he will no longer run the daily operations that turned a struggling textile mill into a sprawling conglomerate.
What Berkshire Hathaway Owns
- Railroads: BNSF Railway, one of the four Class I railroads in the U.S.
- Insurance: Large life, property and casualty insurers, plus a reinsurance operation.
- Utilities and Energy: A broad portfolio of power and utility companies.
- Consumer Brands: Brooks running shoes, See’s Candies, and others.
- Major Stock Holdings: Apple (≈$65 bn), Coca‑Cola (≈$28 bn), Bank of America (≈$32 bn), Moody’s, Visa, Mastercard, American Express (≈$58 bn total).
Greg Abel Takes Over
Abel has spent most of his career running Berkshire’s energy and utility businesses. He is not known for picking individual stocks, unlike Buffett’s famed investment team. The transition raises questions about how Berkshire will allocate its massive cash pile—about $380 bn—without Buffett’s hand‑on guidance.
Potential Challenges
- Investment Leadership: Todd Combs, a key portfolio manager, is leaving for JPMorgan, which could affect the stock‑picking side of the business.
- Operating Performance: Some Berkshire businesses, like BNSF and the Kraft‑Heinz venture, have underperformed.
- Capital Allocation: With low interest rates, holding large cash reserves becomes costly. Decisions on big acquisitions, buybacks, or dividends will test Abel.
What Might Happen Next
Abel could pursue a new large‑scale purchase, perhaps in insurance (Berkshire already owns an 8 % stake in Chubb) or expand further in utilities and Japanese trading houses where he has experience. Another option is to return more cash to shareholders through dividends or share buybacks, a move Berkshire has not made since 1967.
In any case, the company’s strong balance sheet means it can act quickly if markets fall, but its influence may be less certain without Buffett’s reputation.
Buffett’s Lasting Influence
Beyond numbers, Buffett taught a philosophy of patience, simple business models, and enjoyment of work. He often said luck played a big role and urged people to give their children enough money to have choices, but not so much that they lack purpose.
Last month, he began transferring Berkshire shares to his children’s foundations, worth about $1.3 bn, reinforcing his focus on philanthropy.
Remember, this is my view, not a prediction. Do your own research before making any investment decisions.