You already know who Warren Buffett is: He’s the guy who turned a tiny textile company into a $1.2 trillion conglomerate and the 8th largest publicly traded company in the world using the power of value investing.
If you’ve somehow been living under a rock for the last 60 years that Buffett has been at the helm of Berkshire Hathaway, here’s the short version:
- Buffett's strategy of picking high-quality, underpriced stocks propelled Berkshire’s shares up 5,502,284% over the six decades ending December 2024. The S&P 500 has climbed 39,054% over the same period.
- Put another way: Berkshire Hathaway shares have appreciated 19.9% annually in the last 60 years, while the S&P 500 gained about 10.4% per year.
- A single dollar invested in Berkshire at the start of Buffett’s career would be worth about $365,000 today.
Oh, and if you were anywhere near Berkshire’s investor conference in Omaha, Nebraska over the weekend, you probably heard the roaring, spontaneous applause for Buffett after the 94 year-old announced he was stepping down as CEO of Berkshire Hathaway by the end of the year.
But enough about the Oracle of Omaha. The more pressing question: Who the heck is Greg Abel, his successor?
Will Greg be Abel to live up to Buffett’s legacy?
Abel, 62, has been a part of Berkshire Hathaway since the acquisition of his firm MidAmerican Energy in 2000, but Buffett plucked him from the pack and elevated him to vice chairman in 2018, where he’s been helping Buffett run Berkshire and preparing for his future role.
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Abel has big shoes to fill—after all, Buffett is more than just your average billionaire CEO. Buffett has built a legacy that will be hard to emulate, and earned a unique level of trust from shareholders over the decades.
Berkshire’s shares dropped 5.02% today—not exactly a vote of confidence from investors.
“Certainly some of the magic of the company is lost,” said Bloomberg Intelligence equity analyst Matthew Palazola in a conversation with Brew Markets.
Among Abel's biggest challenges are maintaining Berkshire’s ability to strike deals and, of course, managing Berkshire’s massive portfolio of businesses featuring companies like Geico and See’s Candies.
Don’t forget Berkshire’s $348 billion pile of cash, either. “Any other company holding that much excess capital would certainly face a lot of shareholder angst,” said Palazola. “In a world where Greg's a CEO, it is completely fair for investors to really question why they need to hold that much excess cash,” he added.
At least one person has a vote of confidence in Abel. “I have no intention—zero—of selling one share of Berkshire Hathaway. I will give it away eventually,” Buffett said. “The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg's management than mine.”—LB