Introduction to Warren Buffett’s Legacy
Legendary investor Warren Buffett is stepping down as CEO of Berkshire Hathaway after six decades at the helm, but he’s not quite ready to retire. In a media release, Berkshire said its board of directors has unanimously voted to appoint Greg Abel, vice chairman, non-insurance operations, as president and CEO come January 2026. Buffett, who has been CEO of Berkshire since 1970, will remain chairman of the company’s board of directors.
Warren Buffett’s Strategy
Buffett took control of Berkshire in 1965, back when the company was a struggling textile manufacturer. He recounted his experience in those early days, noting that he initially tried to improve and expand the existing textile operation before eventually coming to his senses and heading into insurance and other industries. Many people have tried to explain Buffett’s success, with one Financial Times article noting that his strategy is “more than great stock picks and insurance premiums.” A paper called "Buffett’s Alpha" suggests that his exposure to low-risk, cheap, and high-quality stocks is key. The authors of the paper state that Buffett has boosted his returns by using leverage and sticking to a good strategy for a very long time period, surviving rough periods where others might have been forced into a fire sale or a career shift.
Who is Greg Abel?
Greg Abel has been with Berkshire since 2000, when the firm bought MidAmerican, an energy company he had been running. He joined the board as vice chairman, non-insurance operations, in 2018. Abel was named vice chairman in 2018 along with Ajit Jain, and in a 2014 letter to shareholders, Charlie Munger wrote about the two as potential successors, describing them as "world-leading" business executives. Buffett has also spoken highly of Abel, saying that he understands capital allocation as well as he does and will make decisions in the same framework.
Berkshire’s Path Forward Under Abel
Buffett’s words indicate that he sees Berkshire and Abel following the framework he has laid out, but there may be some evolution. Morningstar analyst Gregg Warren believes that the groundwork for a successful transition at Berkshire has been in place for decades. He notes that Buffett and Munger were skilled at acquiring businesses that were a good cultural fit, and expects this to continue. However, Warren suggests that the new managers will probably work with a slightly different opportunity set and evolve Berkshire from what has historically been a reinvestment machine into one that is more focused on returning capital to shareholders.
Recent Activities and Future Plans
Berkshire’s recent activities include diversification of its portfolio via strategic acquisitions and investments. In January 2025, Forest River Bus & Van, a Berkshire subsidiary, announced its acquisition of L.A. West Coaches to enhance its product portfolio in the luxury transportation market. Berkshire Hathaway Energy is also currently exploring the production of lithium carbonate and other minerals from its geothermal power plants in California’s Imperial Valley, aligning with the company’s interest in renewable energy and sustainability. A joint venture with Occidental Petroleum was publicized in June 2024, which will be useful for the demonstration and deployment of TerraLithium’s direct lithium extraction.
Conclusion
In conclusion, Warren Buffett’s legacy at Berkshire Hathaway is undeniable, and his decision to step down as CEO marks the beginning of a new era for the company. With Greg Abel at the helm, Berkshire is expected to continue its successful trajectory, with a focus on returning capital to shareholders and evolving into a more diversified and sustainable business. As the company moves forward, it will be interesting to see how Abel’s leadership shapes the future of Berkshire Hathaway and its various subsidiaries.
