--- title: "Holding a record \"cash ammunition\"! The market anticipates Buffett's successor Abel to continue the \"Berkshire myth\"" type: "News" locale: "en" url: "https://longbridge.com/en/news/271162038.md" description: "Berkshire Hathaway's cash reserves have reached a record $381.7 billion, and Warren Buffett is about to retire, with successor Greg Abel set to take over the company. Buffett, known as the \"Oracle of Omaha,\" has transformed the company from a textile manufacturer into a massive conglomerate, with stock prices exceeding $750,000. Despite Buffett's outstanding investment performance, the company has faced challenges of slowing growth in recent years, and investors will be focused on Abel's leadership capabilities" datetime: "2025-12-31T02:18:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/271162038.md) - [en](https://longbridge.com/en/news/271162038.md) - [zh-HK](https://longbridge.com/zh-HK/news/271162038.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/271162038.md) | [繁體中文](https://longbridge.com/zh-HK/news/271162038.md) # Holding a record "cash ammunition"! The market anticipates Buffett's successor Abel to continue the "Berkshire myth" The legendary figure in the financial industry—Warren Buffett, known as the "Oracle of Omaha," will officially retire this week, marking the beginning of a new era for his lifelong business empire, Berkshire Hathaway, under the appointed successor Greg Abel. For many years, Warren Buffett has been regarded as the greatest investor in the world, having transformed Berkshire (BRK.A.US, BRK.B.US) from a struggling New England textile mill—where he began buying shares at $7.60 each in 1962—into a massive conglomerate today, with stock prices exceeding $750,000 per share. Even after donating over $60 billion in the past 20 years, Buffett's personal wealth from his Berkshire stock holdings is still valued at approximately $150 billion. For decades, Berkshire's stock price has often outperformed the S&P 500, one of the benchmark indices of the U.S. stock market. Under Buffett's leadership for decades, Berkshire has acquired insurance companies like Geico and National Indemnity, manufacturing firms like Iscar Metalworking, well-known retail brands like Dairy Queen, large utility assets, and even one of the largest railroads in the U.S., BNSF. At the same time, Buffett has purchased stock assets worth hundreds of billions of dollars over the decades, achieving substantial investment returns through his famous long-term bets on companies like American Express, Coca-Cola, and Apple. Buffett's every move in the stock market significantly influences global investors' strategies, with his quarterly position changes creating considerable waves worldwide. However, in recent years, Berkshire seems to struggle to maintain a strong growth rate, as its size has become extremely large, making it difficult to find new and sufficiently significant acquisition targets. Even this fall's $9.7 billion acquisition of OxyChem, a subsidiary of Occidental Petroleum, may not significantly positively impact Berkshire's profits. Investors will closely watch what changes Abel will make to Berkshire's trajectory or its multi-billion-dollar stock investment portfolio, but they should not expect any seismic shifts. Although Abel has managed all of Berkshire's non-insurance businesses since 2018, Buffett will not choose to completely step away from Berkshire. He will continue to serve as chairman and plans to come to the office daily to help seek new investment opportunities and provide important advice when needed by Abel. **Some changes may occur** Cathy Seifert, a senior analyst at CFRA Research, stated that it is natural for Abel to make some adjustments to Berkshire's management model in certain ways. She emphasized that adopting a more flexible leadership style makes sense given the organization’s structure, which spans dozens of subsidiaries and employs nearly 400,000 people. However, Berkshire operates under a highly decentralized structure, granting its executives significant autonomy in major decisions. All relevant parties within the company have indicated that there are no plans to change this The world learned in 2021 that Abel would become Warren Buffett's personally appointed successor at Berkshire Hathaway. At an annual meeting, Buffett's long-time business partner, the late Charlie Munger, assured shareholders that Abel would continue the company's culture. One of the sales pitches Buffett has made to founders and CEOs considering selling their companies to Berkshire is that Berkshire would largely allow them to continue operating their businesses in the same way, as long as they deliver strong performance results. Seifert emphasized, "The management style in the Abel era is likely to be more flexible than in the Buffett era, but I think the investment community will likely appreciate Greg's management style, as it will, to some extent, 'tighten and streamline' things." She stated, "If this helps performance, then it is indeed beyond reproach." **Abel has played an active role in managing the company for a long time** Abel has proven himself to be a top manager who is more "hands-on" and involved than Buffett, but he still follows Berkshire's model of granting autonomy to acquired companies. Abel poses sharp questions to company leadership and holds them accountable for performance. Earlier this month, Abel did announce some leadership changes: investment manager and Geico CEO Todd Combs is stepping down, and Chief Financial Officer Marc Hamburg announced his retirement. Abel also stated that he would appoint NetJets CEO Adam Johnson as the head of all consumer, service, and retail businesses under Berkshire. This effectively creates a third large division for the company and alleviates some of Abel's workload. He will continue to manage large manufacturing, utility, and railroad businesses. Abel will ultimately face greater pressure, especially regarding the potential to start paying dividends. From the beginning, Berkshire has maintained that reinvesting profits is better than distributing them to shareholders quarterly or annually. However, if Abel cannot find productive uses for Berkshire's $382 billion in cash, investors may push the company to start large-scale dividend distributions or adopt traditional stock buyback programs to enhance the value of their holdings. Currently, Berkshire only repurchases stock when Buffett believes the share price is cheap, and he has not done so since early 2024. Nevertheless, since Buffett controls nearly 30% of the voting rights in the stock, Abel will be able to avoid significant negative impacts from such pressures for a time. This percentage will gradually decrease after Buffett's death—by agreement, his children will distribute his substantial shares to charitable organizations. **Berkshire has an incredibly solid long-term foundation** Many of Berkshire's subsidiaries tend to fluctuate dramatically with economic cycles, generating substantial profits during periods of national economic expansion. However, Berkshire's stock, with "Oracle of Omaha" Buffett at the helm and possessing a large cash flow asset, often achieves excess alpha investment returns far exceeding the S&P 500 index during periods of significant volatility in the global stock market. Berkshire's utility assets typically generate stable profits year-round, while its insurance companies, such as Geico and General Reinsurance, provide over $175 billion in premium funds Can be used for investment before the claim expiration. Notable institutional investor Chris Ballard, managing director at Check Capital, stated that he believes most of Berkshire's businesses "can almost operate well on their own." He is optimistic about the prospects of Berkshire under Abel's leadership becoming increasingly bright. One of the biggest questions currently is how much further change there will be in the company's leadership after the departure of legendary veteran Todd Combs—if there will be any at all. Ajit Jain, the head of the insurance business and vice chairman, has been highly praised by Buffett himself and is now 74 years old; many CEOs of Berkshire's subsidiaries continue to work past retirement age because they enjoy serving Buffett. "As long-term shareholders, we are not too concerned about Todd Combs' formal departure, nor do we see it as the beginning of some negative iceberg," Ballard emphasized. Some investment companies led by Ballard himself even consider Berkshire as their largest holding. "Todd's situation is unique. It just reminds us that Warren's departure as CEO and the separation of him from Berkshire's daily operations is imminent, and they are preparing for a new phase—of which we are still very much looking forward to." **With record "cash ammunition," Buffett's successor is about to make a grand plan, will Berkshire's stock price rebound significantly?** James Shanahan, a senior analyst from Wall Street financial giant Edward Jones, stated that Berkshire, under the "Oracle of Omaha" Warren Buffett, exceeded expectations in the third quarter, mainly benefiting from significant improvements in its insurance underwriting business and the solid contribution from its aerospace parts manufacturer, Precision Castparts. The analyst also believes that Abel, who will succeed Buffett at the end of the year, will rebuild investor confidence based on Berkshire's record cash reserves of nearly $400 billion. Third-quarter performance data shows that, without any stock buybacks, Berkshire's cash reserves ballooned to a record level of $381.7 billion, with short-term U.S. Treasury reserves even exceeding the Federal Reserve's holdings of U.S. Treasuries. This is the last quarterly performance report during the tenure of "Oracle of Omaha" Warren Buffett as CEO of the business empire headquartered in Omaha, Nebraska. The 95-year-old "prophet of Omaha," who has been active in global business and financial markets for decades, will officially step down as CEO of Berkshire on January 1, 2026, at which point his designated successor, Greg Abel, will take over. Abel will also begin to represent Berkshire in announcing quarterly performance reports and writing annual shareholder letters starting in 2026. There is no doubt that Buffett continues to advocate the "cash is king" strategy with practical actions, as Berkshire's cash reserves hit a historic high again. The world's most famous stock investor has shown an overwhelming preference for cash since 2024, interpreted by the market as a bet that the U.S. economy and U.S. stocks will face turmoil. This massive conglomerate and investment giant continues to sell off its stock assets, such as Apple and Bank of America, without conducting any stock buybacks Promoting the continuous expansion of Berkshire's cash reserves. This cash hoarding initiative has also been interpreted by some Wall Street investment institutions as Buffett's intention to leave enough "cash bullets" for the "Abel era"—that is, striving to leave ample room for imagination in Berkshire's future operational maneuvers. ![1767146828(1).png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20251231/1767146844463445.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Shanahan stated in a recent research report: "Berkshire currently holds over $380 billion in cash reserves, an increase of $48 billion since the beginning of the year. In the third quarter, the scale of stock sales exceeded purchases by $6 billion, marking Berkshire as a net seller of stocks for 12 consecutive quarters (with a cumulative net sale of $183 billion). Additionally, Berkshire has not repurchased any of its own shares for five consecutive quarters." Shanahan noted: "After a significant underperformance following Buffett's announcement that he would step down as CEO at the end of the year, we recently upgraded Berkshire's rating from 'hold' to 'buy,' as this sell-off presents a buying opportunity. We believe that incoming CEO Greg Abel will rebuild investor confidence over time. Furthermore, we expect that in the short term, if Abel increases investment activities and/or implements stock buybacks based on the substantial cash flow, it could become a strong catalyst for Berkshire's stock price." ## Related News & Research - [National Presto Wins Major U.S. Army Ammunition Order](https://longbridge.com/en/news/280844825.md) - [Rheinmetall Price Target Lowered as MWB Notes New Supplier in German Ammunition Market](https://longbridge.com/en/news/280953601.md) - [US Army’s first new grenade since the Vietnam War uses shock waves to kill](https://longbridge.com/en/news/281492677.md) - [ZAWYA: NBK resumes Al Jawhara prize draws](https://longbridge.com/en/news/281466379.md) - [Airline Emirates says Iranian nationals barred from entering or transiting UAE](https://longbridge.com/en/news/281300990.md)