You know that scene in The Dark Knight where the Joker says "nobody panics when things go according to plan"? Well, yeah. The plan was simple: Greg Abel takes the throne at Berkshire Hathaway, writes a nice little letter to shareholders, reaffirms Master Buffett's values, and everyone moves along clapping.
Except the market didn't read the script.
The Stumble
Berkshire's class A shares opened the week down 4.2%. The reason? Fourth quarter 2025 results that made Wall Street gulp hard: operating profit of $10.2 billion — a nearly 30% drop compared to the same period last year.
The main villain? The insurance segment, historically the beating heart of the Berkshire machine. Underwriting profit plummeted 54%, going from $3.41 billion to a measly $1.56 billion. When the insurance engine coughs, the entire conglomerate sneezes.
But let's be fair: a bad quarter in the insurance business happens. Natural disasters, above-average claims, market cycles. This is nothing new for anyone who's followed Berkshire for over two decades. Buffett himself warned countless times that isolated quarters are noise, not signal.
So why did the market react like this?
The Mountain of Money That Won't Move
Because the real problem isn't the weak quarter. It's the damn $370 billion mountain of cash and Treasuries that's still sitting there, dead still, collecting golden dust — and Greg Abel, in his first communication as CEO, basically said: "all good, no worries."
No dividend. No major acquisition. No bold signal. Not a single move that told the market: "I'm the guy now, and I'm putting this money to work."
Meyer Shields, analyst at KBW, didn't hide his frustration: "We were surprised by the absence of any kind of dividend, and even more so by the sustained declaration that they don't intend to pay dividends." He added that, given the absurd cash position and the company's cash generation capacity, there was an expectation that the CEO transition would come with some signal in that direction.
Abel, however, chose the safe route: he repeated Buffett's mantra about reinvestment and opportunistic share buybacks when trading below intrinsic value. Copied the playbook. Word for word.
And here lies the cruel irony of succession: when you inherit the throne of a genius, being too faithful to the playbook can look like a lack of personality.
The Other Side of the Coin
Not everyone was selling and crying. Brian Meredith at UBS played the rational guy in the middle of the panic: he reminded people that Berkshire is, by nature, a defensive fortress. And with current geopolitical tensions running high, that profile might be exactly what the market will want to embrace.
"Historically, BRK shares have outperformed the market during periods of volatility, benefiting from diversified revenue streams, liquidity position, and predominantly U.S.-focused businesses," Meredith wrote.
Valid point. Buffett built Berkshire precisely to be the bunker you want to have when the world catches fire. And with $370 billion in cash, that bunker has more than enough ammo to buy assets from whoever's desperate — if Abel has the guts to pull the trigger.
Meredith also noted that, looking ahead, he expects management to focus on improving BNSF's (railroad) operating margins to close the gap with competitors, and on increasing customer retention at Geico while maintaining profitability.
The Question Nobody Wants to Ask
Look, I get Greg Abel. The guy took over the most iconic company in American capitalism. Any bold move that goes wrong will be compared to what Buffett would've done. Any conservative decision will be called cowardice. It's an impossible game to win in the short term.
But Nassim Taleb taught us something: the difference between a bureaucrat and a decision-maker is that the latter has skin in the game. Abel needs to, at some point, stop being the temple's caretaker and become the priest with his own voice.
$370 billion sitting idle isn't discipline. It's paralysis with a designer label.
The question that lingers: is Abel waiting for the perfect opportunity — like Buffett did in 2008, buying Goldman Sachs with a bazooka — or does he simply not have the stomach to do what needs to be done?
The market already sent its message. Now it's on him.
