There's a scene in The Godfather — the classic, the 1972 one — where Don Corleone hands power over to Michael and says, more or less: "I've done my time." The camera doesn't show fireworks. It shows a tired old man in a garden.
Warren Buffett went out like that. Quiet. But the last earnings report of his reign? That one screamed.
The numbers nobody wanted to put in a big headline
Berkshire Hathaway reported its fourth-quarter 2025 results on Saturday — the last with Buffett sitting in the CEO chair. Operating profit: $10.2 billion. Sounds like a lot, right? Well, it's nearly 30% less than the $14.56 billion from the same period a year earlier.
Translating from Wall Street jargon into plain English: the machine the Oracle of Omaha built over six decades simply made a lot less money. And the main culprit? Insurance — the beating heart of Berkshire since forever.
Underwriting profit from insurance — which is basically the money left over after paying out claims — dropped 54%. From $3.41 billion to a measly $1.56 billion. Investment income from the insurance segment also took a beating of nearly 25%, going from $4.08 billion to $3.1 billion.
Damn, that's a crater.
The full year didn't save it either
If you're thinking "well, one bad quarter happens to anyone" — fair enough, let's look at the full year. Operating profit for 2025 came in at $44.49 billion, versus $47.44 billion in 2024. Down almost 7%.
Total earnings — the one that includes stock market gains and losses — plummeted from $89 billion to $66.97 billion. A 25% drop. And yes, Berkshire always warns that this line is volatile and that smart investors shouldn't pay too much attention to it in the short term. I agree. But $22 billion less is $22 billion less, no matter how pretty the disclaimer in the press release.
Oh, and buried in the middle of those numbers, a $4.5 billion impairment on Kraft Heinz and Occidental Petroleum. The bet on ketchup and oil isn't exactly paying pride dividends.
The mountain of cash nobody's using
This is where things get philosophical — or infuriating, depending on your point of view.
Berkshire didn't repurchase a single share during the quarter. Zero. Zilch. Cash dipped from $381.6 billion (a record) to $373.3 billion. Meaning it only went down because the business breathed, not because there was any major capital allocation.
That's three hundred and seventy-three billion dollars sitting there. That's more than the GDP of entire countries. It's more than the market cap of 95% of S&P 500 companies.
Buffett always said he'd only buy when he saw something at a fair price. But at some point, hoarding cash stops being prudence and becomes paralysis. The guy who wrote the most brilliant capital allocation playbook in history simply... stopped allocating.
Charlie Munger — may he rest in peace — would probably have some dry quip about this.
Greg Abel: the heir to the throne without the magic crown
Greg Abel took over in January 2026 and has already sent out his first annual letter to shareholders. He promised to maintain the culture of "financial strength and capital discipline" that Buffett built.
Looks good on paper. But here's the naked truth: nobody buys Berkshire because of Greg Abel. They buy — or bought — because of Buffett. Class A shares rose just 10% in 2025, while the S&P 500 advanced 16.4%.
For a company that since 1965 has delivered 19.7% annualized compound returns — nearly double the S&P — and accumulated over 6,000,000% in total gains (yes, six million percent), trailing the index in the founder's final year is, at the very least, symbolic.
What does this mean for you?
It means even the gods of the market bleed. That no fortress lasts forever. That power transitions — whether at Berkshire, in a family, or in a country — are moments of fragility, not premature celebration.
And it means, above all, that you should stop worshipping any single figure and start understanding the numbers behind the myth. Because Buffett's Q4 numbers? They don't lie.
The question that lingers: if the greatest investor of all time didn't know what to do with $373 billion, what makes you think that Instagram finance guru knows what to do with your five grand?
