There's a scene in The Godfather Part III where Michael Corleone, already tired and sick, tries to pass the torch. The problem is never the handoff ceremony. The problem is the day after. When the captains look at the new boss and think: "can this guy take a punch?"
That's exactly what's happening at Berkshire Hathaway right now.
The letter everyone was dying to read
Greg Abel, 63, a Canadian from Edmonton, published his first annual letter as Berkshire's CEO this Saturday. Warren Buffett, now 95, stepped down as CEO in early 2026 and stays on as chairman — a sort of "pope emeritus" of American capitalism.
And what did Abel write? Basically: I'm not changing a damn thing.
Decentralized management? Keeping it. Fortress balance sheet? Keeping it. Debt used sparingly? Keeping it. Dividends? Not a chance in hell. The no-dividend policy stays intact as long as every dollar retained creates more than a dollar of market value. The board reviews this annually, but the message is loud and clear: "your money makes more in my hands than in yours."
Abel quote that deserves to be framed:
"We will assess value carefully, act patiently, and hold for the long run — preferably forever."
That's pure Buffettism. Practically a catechism. The question is: does reciting the catechism mean you actually live the faith?
$373 billion in cash and the art of doing nothing
Berkshire's cash position closed 2025 at $373.3 billion. Three hundred and seventy-three billion dollars. For perspective: that's more than the entire GDP of Chile.
Abel made a point of pushing back against the narrative that this mountain of money means Berkshire is "retiring" from investing. He calls it "strategic dry powder" — gunpowder saved for when the right opportunity shows up.
And here's the brilliance that most LinkedIn analysts completely miss: an investor's greatest skill isn't buying. It's waiting. Buffett waited. Abel promises to wait too. Nassim Taleb would call this optionality — you keep the cash pile fat so you have the right, but not the obligation, to strike when the market bleeds.
The problem? Waiting is easy when you're Warren Buffett and the market treats you like a demigod. Waiting when you're Greg Abel and you need to prove you're more than just an operations guy... that's a whole different ballgame.
The portfolio: who stayed and who vanished from the list
Abel confirmed that the stock portfolio will remain concentrated in a small group of American companies: Apple, American Express, Coca-Cola, and Moody's. The philosophy is decades of compounding, not portfolio churning.
A detail that didn't go unnoticed: Bank of America disappeared from the highlight list. It was the third-largest position at the end of 2025, and Abel simply didn't mention the bank among his favorites. Coincidence? In Berkshire's chess game, nothing is a coincidence.
Another relevant point: Abel will personally oversee the stock portfolio. Ted Weschler continues managing about 6% of the portfolio, absorbing the positions that were Todd Combs' — who recently left Berkshire for JPMorgan. The message is clear: capital allocation is the CEO's responsibility. Period.
What this letter really says (between the lines)
Look, a new CEO's letter is always an exercise in diplomacy. Abel did his homework: he paid reverence to Buffett ("a very tough act to follow"), reaffirmed the values, promised continuity.
But the market doesn't run on promises. It runs on execution.
The truth is Abel is a top-tier operator — the guy managed subsidiaries, knows the business inside out, has 25 years at the company. But running subsidiaries and allocating hundreds of billions in capital are completely different sports. It's like saying a great goalkeeping coach can manage the national team. It might work. But it's a different game entirely.
Abel himself admitted with rare honesty: "I will not be your CEO for the next 60 years, as simple arithmetic..." — the sentence was cut off in the report, but the humility was there.
Post-Buffett Berkshire won't be tested in the good years, but in the next crisis. When the market melts down and everyone's screaming "sell everything," who's going to hold the wheel?
Abel swears he will. The market is still deciding whether it believes him.
And you — would you trust $373 billion in the hands of a guy who's never been tested in the eye of the hurricane?
