What Is The Future of Berkshire Hathaway As Buffett Steps Down?
- David Abam
- 4 days ago
- 13 min read
16th May 2025
We have an exciting "News of the Day" article for you today. We discuss in detail what the future ahead is for Warren Buffett's Berkshire Hathaway as the founder and CEO, Warren Buffett steps down. We discuss who the new CEO is and why we believe not only is he right for the job, but multiple other reasons as to why we would be investing more into BH for the long term. We hope you enjoy it, and let us know your thoughts down in the comments
Major Headline
Google One tops 150M subscribers, AI tier drives growth
Google One has surpassed 150 million subscribers, marking a 50% jump since early 2024. The growth is largely driven by the $19.99/month AI-powered plan, which now accounts for “millions” of users. As search traffic slows—especially on Safari—Alphabet is leaning more into subscriptions to diversify its revenue base. Reuters
2,000+ Starbucks baristas strike over new dress code
More than 2,000 baristas across 120 U.S. Starbucks stores have walked off the job since Sunday, protesting a new dress code that limits what employees can wear under their green aprons. The updated policy, rolled out Monday, allows only solid black tops and select pants, replacing a looser dress standard. Starbucks Workers United, the union behind the strike, says the policy should be subject to collective bargaining. Morningbrew
Ben & Jerry’s co-founder removed from Capitol over Gaza protest
Ben Cohen, cofounder of Ben & Jerry’s, was escorted out of a Senate hearing after confronting RFK Jr. and lawmakers over U.S. support for Israel’s military campaign in Gaza. Video shows Cohen in handcuffs after shouting about bomb funding and food blockades. The protest disrupted Kennedy’s 2026 budget remarks and reignited debate over U.S. foreign aid and Medicaid cuts. Yahoo News
North Korean hackers pose as remote workers to infiltrate UK firms
A North Korean hacker group is using AI-generated résumés and stolen IDs to land remote IT jobs at UK companies, according to Crowdstrike. Once hired, the operatives deliver minimal work and reroute company devices to “laptop farms,” enabling covert control from abroad. Over 300 incidents have been recorded in 2024 alone, with finance and healthcare firms among the most affected. City AM
Minor Headline
US judge questions Trump order in Huawei criminal case – Reuters
US Supreme Court reviews Trump challenge to birthright citizenship – Reuters
BYD to set up European hub in Hungary – Reuters
Chris Brown charged over London club assault – Reuters
Linklaters, U.S. firms steer Evri-DHL merger. – Yahoo News
Portugal’s far-right leader collapses again before election – Reuters
Mexican influencer Valeria Marquez killed during TikTok livestream – Reuters
Hogan Lovells hikes NQ pay to €140k in Germany – Non-billable
News of the Day
The Stepping Down of Warren Buffett and The Future of Berkshire Hathaway
After more than six decades at the helm of Berkshire Hathaway, Warren Buffett—arguably the most influential investor of the modern era—is officially stepping down as CEO at the end of 2025. At 94, Buffett leaves behind a legacy that reshaped the investing world and turned a struggling textile company into a $1.16 trillion empire spanning railroads, utilities, insurance, retail, and tech.
Announcing the decision at Berkshire’s annual meeting, Buffett stated, "I think the time has arrived where Greg should become the chief executive officer of the company at year's end." Though he will still "hang around and conceivably be useful," Buffett confirmed the "final word" will now belong to his chosen successor, Greg Abel.
In this article, I wish to give a brief history of Berkshire Hathaway (BH) and “The Oracle of Omaha” Warren Buffett. I will discuss a few of his investing principles and how those principles have inspired generations of value investors. I would give a brief scorecard of Mr Buffett’s greatest wins and how he has returned 5,500,000% (five million and five hundred percent) from 1964 - 2024, while the S&P 500 has returned a respectable but insignificant 39,000% in the same period. I will then discuss who the Oracle has chosen as a successor. We would look into his career trajectory and also examine his returns. We will discuss how culturally, he is a great fit for the CEO, and how even though he shares the same ideals of longevity in investing, he is not just Warren Buffett, but will continue to grow the company to even greater heights. I would then explain how shareholders are in the right hands and why I believe he would deliver even better returns. I do not believe he would be another Buffett, I don’t think Greg Abel even wants to be, but a different yet effective CEO, and that this reasoning is why I hold and will continue to buy even more BH shares for the long term.
A Brief History of Warren Buffett & Berkshire Hathaway
If, like me have ever wondered where the name Berkshire Hathaway came from, well, it was originally a textile manufacturer formed in 1955 from the merger of Hathaway Manufacturing Company and Berkshire Fine Spinning Associates. After the merger, Berkshire Hathaway had 15 plants employing over 12,000 workers with over $120 million in revenue, and was headquartered in New Bedford. However, seven of those locations were closed by the end of the 1950s, accompanied by large layoffs; in essence, the company was struggling. In 1962, Warren Buffett began buying Berkshire Hathaway stock for his investment fund, Buffett Partnership Ltd., anticipating that as the company liquidated textile mills, there would come a tender offer when he could sell the shares at a profit. A year later, Buffett's fund owned 7% of the company. In 1964, Buffett offered to sell his shares back to the company for $11.50 each. Seabury Stanton, the manager of Berkshire Hathaway, told Buffett orally that he had a deal. A few weeks later, Warren Buffett received the tender offer in writing, but the tender offer was for only $11.375 per share. Buffett later admitted that this lower, undercutting offer made him angry. Instead of selling at the slightly lower price, Buffett bought more of the stock at an even higher price to take control of the company and fire Stanton; Stanton and his son resigned in 1965. However, this left Buffett's fund with a major interest in a declining textile business.
Interestingly, Buffett has described purchasing Berkshire Hathaway, the textile company, as the biggest investment mistake he had ever made, denying him compounded investment returns of about $200 billion over the subsequent 45 years.
Buffett’s Investment Principles
To say that Warren Buffett is one of the most successful stock market investors of the past 60 years is not a praise of him but a categorical statement of fact. His entire approach is to focus on the value of the business and its market price. Once Buffett finds a business he understands and feels comfortable with, he acts like a business owner rather than a stock market speculator. He studies everything possible about the business, becomes an expert in that field, and works with the management rather than against them. In fact, often his first act on buying shares in any company is to grant the managers his proxy vote for his shares to assure them that he has no intention to try and move the company away from its core values. Buffett champions the value investment strategy, and puts no credence in day-to-day movements in share prices, the impact of the economic mood overall, or any other external factors. He maintains a long-term perspective at all times and never loses sight of the underlying value of a business.
He is the biggest promoter and beneficiary of value investing. He doesn’t consider himself a trader nor is he in the businesses of making short term quarterly gains but true long term investment. His business principles can be simplified to these three things.
Never follow the daily stock market fluctuation
Don't worry about the general stock market as you cannot control it
Don't buy a stock, buy a business. In other words, focus on the fundamentals
These principles have inspired multiple generations of value investors who, upon Buffett’s recommendations, do not trade stocks but invest in companies and index funds with the intention of long-term investing. Though it may have its critics, Buffett always seems to be one step ahead of the entire market. He almost invented the buy-and-hold mantra in which people would buy a stable company and just hold it as it grows and benefits from said growth. His investments are so profitable, so much so that people reverse-engineer Berkshire Hathaway’s holdings in publicly listed companies by reading their official filings on a monthly or quarterly basis, and sell or buy the same percentages of the same companies he does, or just have an algorithm that replicates the investments and multiple report beating the S&P 500 year after year.
Buffett’s Astronomical Scorecard
There are times when Buffett partially liquidates BH’s portfolio, opting to increase their cash reserves. An example of this was right before the Tech Bubble of the 2000s burst; BH’s holding was 70% cash, and during the panic selloff and collapse of 2008, he deployed over $20 billion into stocks and equities, snapping up stable businesses at bargain, almost bottom prices. In 2024, while the S&P was up 20% on average, Buffett was a Net Seller of equities, reducing his holdings in
Apple: Down from $175 billion to $70 billion.
Bank of America: Reduced from $34.8 billion to $31.7 billion
Chevron: Lowered from $19 billion to $17.5 billion.
I calculated that had he held onto the $105 billion worth of Apple shares, as of mid-April (when the stock market turmoil happened due to the tariffs), he would have taken a loss of around ~22%, or $23 billion. Instead, he holds ~$350 billion in cash. There are speculations as to why he has so much cash, maybe it was because he knew he was stepping down soon, maybe it is because he foresaw the 2025 selloff and needed to be ready to find bargains. For whatever reason, BH has been astronomical in their scorecard
I mentioned in the introduction that between 1964 and 2024, his overall returns were a staggering 5,502,284%, and within the same time, the S&P 500 returned a respectable but relatively insignificant 39,054%. For those counting, his returns are 141 times the S&P 500. Under his leadership, Berkshire achieved average annual returns of 25.3% from 1957 to 1968, significantly outperforming the S&P 500's 10.5%. Would it surprise you to know that between 1995 and 2024, he beat (had higher returns than) the S&P 500 16 (sixteen) times on an annual basis.
Buffett's investing prowess wasn’t just about money—it was about patience, principles, and playing the long game. After taking control of Berkshire in 1965, he led the company through nearly six decades of compound growth.
Between the 1960s and 1990s, while the broader market averaged 11% returns, Berkshire shares delivered a staggering 28% annually. This compounding effect turned Buffett into one of the world’s richest individuals, with an estimated fortune of $168.2 billion, nearly all held in Berkshire stock.
A key theme of Buffett's legacy is ethical capitalism. He maintained a modest lifestyle, consistently advocated for higher taxes on the wealthy, and pledged to donate most of his wealth to philanthropy. Buffett’s “value investing” strategy produced a parade of legendary investments. Here are six of his most iconic:
1. Apple (AAPL)
Holding Period: 9 years
Cost: ~$10 billion → Market Value: $75.1 billion
Why It Mattered: Buffett called it “a better business than any we own.” Despite trimming the position, Apple remains Berkshire’s top equity holding. I one of the famed shareholders meetings, he joked that Tim Cook has made BH more money than he, Buffett, ever has.
2. American Express (AXP)
Holding Period: 31 years
Cost: $1.3 billion → Market Value: $45 billion
Dividends grew tenfold, and Buffett saw the brand's staying power even during times of crisis.
3. Coca-Cola (KO)
Holding Period: 36 years
Cost: $1.3 billion → Market Value: $24.9 billion
Buffett’s belief in brand equity and global scalability turned this into a textbook case of long-term investing.
4. Bank of America (BAC)
Holding Period: 14 years
Cost: ~$15.2 billion → Market Value: $29.9 billion
Buffett praised CEO Brian Moynihan and saw BAC as a pillar of stability post-2008.
5. Moody’s (MCO)
Holding Period: 25 years
Cost: $248 million → Market Value: $11.7 billion
Buffett admired its “enormous pricing power” and its resilient, high-margin model.
6. Chevron (CVX)
Holding Period: 5 years
Cost: ~$15.4 billion → Market Value: $17.2 billion
A bet on energy security and dividends, with Buffett entering and exiting tactically.
The Transition: Buffett to Abel
Warren Buffett plans to officially hand over the reins of Berkshire Hathaway at the end of 2025 to Greg Abel, his longtime lieutenant and trusted operational chief. Abel has worked under Buffett for over two decades and has steadily built a reputation as a disciplined, thoughtful leader with deep expertise in managing complex businesses. Since joining Berkshire in 1999 through the firm’s acquisition of a controlling stake in MidAmerican Energy, Abel has risen through the ranks, eventually becoming vice chairman of non-insurance operations in 2018.
In that role, he oversees some of Berkshire’s largest businesses—including railroads, utilities, and retail. His quiet but steady influence has expanded in recent years, including key involvement in Berkshire’s growing investments in Japanese trading houses, which he noted are "investments for decades to come." Designated as Buffett’s heir apparent since 2021—a revelation made by the late Charlie Munger—Abel’s succession has been a carefully telegraphed transition, giving him ample time to build trust with shareholders and shape the future direction of the Berkshire empire.
Given the introduction and the carpet rollout that was discussed earlier, it isn't unreasonable to speculate that whoever it is to succeed Buffett would have incredible shoes to fill, even bigger than my shoes (I’m a UK. 14.5, US. 15, EU.50). Greg Abel however, seems to be the right fit for the job.
Greg Abel: Career And Investment Background
Greg Abel, a 62-year-old Canadian businessman, has been named Buffett's successor. He isn’t a flashy executive. His rise within Berkshire is a story of quiet competence, deal-making acumen, and strategic alignment with Buffett’s values. Buffett has praised his heir apparent as an effective executive whom he trusted to make big decisions. By 2023, Mr. Buffett told CNBC, Mr. Abel “does all the work and I take all the bows.” The billionaire added, “He’s a big improvement on me, but don’t tell anybody.” Furthermore, Charlie Munger said “Greg will keep the culture” which is an incredibly high praise from both Buffett and Munger
He began his career as a chartered accountant with PriceWaterhouseCoopers (PWC) before joining CalEnergy in 1992. Abel joined Berkshire Hathaway in 2000 following its acquisition of MidAmerican Energy, where he served as CEO. Under his leadership, the company grew to manage over $90 billion in assets, with operations in the U.S., U.K., Canada, and the Philippines. His portfolio included utilities, renewables, insurance, and nuclear energy—sectors requiring long-term capital discipline, a hallmark of the Berkshire approach. Appointed vice chairman of Berkshire in 2018, Abel’s responsibilities expanded far beyond energy. He became a steady hand managing operations across railroads, retail, industrials, and infrastructure, effectively serving as the company’s day-to-day manager for over half a decade.
Under Abel's leadership, Berkshire Hathaway Energy (BHE) became a significant player in the U.S. energy sector:
Renewable Energy Investments: BHE invested over $30 billion in renewable energy projects, making it a leader in wind and solar energy.
Infrastructure Development: The company committed $18 billion to build high-voltage transmission systems, facilitating the distribution of renewable energy across multiple states.
Strategic Acquisitions: Abel oversaw significant acquisitions, including NV Energy and parts of Dominion Energy's natural gas operations, enhancing BHE's portfolio.
These initiatives not only expanded BHE's operational footprint but also aligned with global trends toward sustainable energy.
Abel’s track record is more than operational—he delivers returns. From 2010 to 2022, divisions under his leadership added $53 billion in equity and increased earnings by $7 billion. According to Morningstar research cited by the Financial Times, his capital allocation generated 13% returns, outpacing the 10.6% from Berkshire’s portfolio managers and even Buffett himself during that window. He’s also respected across Berkshire’s decentralised empire. CEOs across the company, from Dairy Queen to Brooks Running, consistently cite Abel’s responsiveness, strategic vision, and operational insight. His board memberships, including at The Kraft Heinz Company, and leadership roles in energy-focused institutions reflect both a global perspective and industry-specific depth.
How Is Mr. Abel Expected To Run Berkshire? And Why I’m Along For The Ride
Though Mr. Buffett won renown as one of the most successful stock pickers of all time, his successor’s strengths lie more in running businesses. That is in part a reflection of what Berkshire is today: an empire of often-disconnected businesses that together employ more than 392,000 workers.
Mr. Abel is not expected to choose the companies that go into Berkshire’s investment portfolio — the company already has two executives, Todd Combs and Ted Weschler, who were hired by Mr. Buffett to help with that. But he will oversee the kinds of big deals that the conglomerate is perhaps uniquely able to strike, given the $347.7 billion in cash that it is sitting on. (Mr. Buffett has called that his “elephant gun.”)
A similar transition to this, I believe, is akin to the transition that happened in Apple many years ago, when Tim Cook succeeded Steve Jobs. From a purely creative lens, one could argue that Apple has stalled on innovation at best and regressed at worst, citing examples of Siri in the AI boom and the monotony of their current phone product line. They would be thoroughly wrong, as under Cook’s leadership, Apple has initiated and grown its wearables and accessories division to capture significant market share. They would also be incredibly wrong, as objectively, in all aspects, Apple is a much larger company. For example, under Tim Cook, Apple’s market capitalisation grew from $364 billion to $3.68 trillion, with revenues in the hundreds of billions. Apple has an entire city in China called iPhone City, employing just over 350,000 people. Tim Cook may not be a visionary, but his keen eye and operational excellence have quite literally grown Apple by a minimum factor of 10. In the same logical progression, I believe that although Greg Abel may not be a visionary like Buffett, he has all that it takes; the blessing of leadership, including Buffett (his guidance as chairman of the board) and Munger, operational exceptionalism, and finally a $350 billion Elephant Gun to take Berkshire Hathaway from a $1.09 trillion market capitalisation to a $10 trillion market cap at the very least. This is why I am investing greatly in BH and holding for years to come.
Conclusion:
Warren Buffett’s departure marks the end of an era, but Berkshire Hathaway’s future remains in capable hands. Greg Abel, a seasoned operator with a proven track record in capital allocation and long-term value creation, embodies the same disciplined, patient ethos that defined Buffett’s reign. While Abel may not replicate Buffett’s legendary stock-picking genius, his operational expertise and strategic vision position him to steer Berkshire’s vast empire toward continued growth—particularly in infrastructure, energy, and global markets. The transition mirrors Apple’s shift from Steve Jobs to Tim Cook: a move from visionary leadership to executional excellence, with a focus on scaling an already formidable enterprise.
For shareholders, the key takeaway is continuity with evolution. Abel inherits a cash-rich conglomerate primed for opportunistic acquisitions, a culture of decentralized management, and a portfolio built for resilience. His mandate isn’t to be "the next Buffett" but to leverage Berkshire’s unique advantages in a changing economic landscape. While no one can replace Buffett’s mythic influence, Abel’s pragmatic leadership suggests Berkshire’s best days may still lie ahead. For long-term investors, this isn’t a time for hesitation—it’s an opportunity to double down on a company engineered to endure. The Oracle is stepping down, but the machine he built is just warming up.
Gen Z Word of the Day: Silent serve
Meaning: When someone does something iconic, impressive, or shady without saying a word.
Example: “She unfollowed him right after the breakup — silent serve.”
Comentários