Berkshire Hathaway (BRK) just lately launched its 2025 Letter to Shareholders (additionally see full 2025 Annual Report). Often, that is once I learn Warren Buffett’s teachings and share my private takeaways (2024, 2023, 2022, and so forth). Sadly, the time has come when the brand new CEO, Greg Abel, should take over this obligation.
Within the letter, Abel does a pleasant job of itemizing all of the often-unique strengths of Berkshire Hathaway and Warren Buffett. Longtime shareholders shall be aware of these attributes, however I suppose it’s good that he repeats them himself.
- Company tradition constructed round honesty, transparency, and simple communication with shareholders.
- Decentralized construction the place subsidiary CEOs function autonomously with minimal headquarters oversight.
- Sturdy tradition of belief: managers are anticipated to run their companies independently and ethically.
- Lengthy-term possession mindset targeted on a long time, not quarters.
- Desire for proudly owning high-quality companies with sturdy aggressive benefits.
- Disciplined capital allocation, together with a willingness to carry giant money reserves till enticing alternatives seem.
- Insurance coverage operations present “float,” which acts as low-cost capital for investments.
- Restricted use of leverage and avoidance of extreme monetary danger.
- Desire for everlasting possession slightly than shopping for companies to promote later.
As seen by @TCII_Blog, Buffett is explicitly listed as somebody that shall be consulted on any share buybacks within the full annual report:
Berkshire’s widespread inventory repurchase program permits Berkshire to repurchase its Class A and Class B shares at costs beneath Berkshire’s intrinsic worth, as conservatively decided by Berkshire’s Chief Govt Officer after session with the Chairman of the Board. We’re not dedicated to a minimal or topic to a most repurchase quantity. We is not going to repurchase our inventory if it reduces our consolidated money, money equivalents and U.S. Treasury Payments holdings to beneath $30 billion. Monetary power and redundant liquidity will at all times be of paramount significance at Berkshire. There have been no share repurchases in 2025.
No buybacks in 2025, however on 3/5/26, Greg Abel introduced that they’ve began shopping for again shares once more (WSJ present article). We will solely assume which means each he and Buffett agree that BRKB very just lately traded beneath their “estimate of intrinsic worth, conservatively decided.”
As well as, Abel additionally introduced that he shall be utilizing his whole after-tax annual wage as CEO (at present ~$15 million after-tax/$25 million gross) to buy Berkshire Hathaway shares. In different phrases, he may have “pores and skin within the recreation”.
Abel, who succeeded Buffett as CEO in January, additionally mentioned in a regulatory submitting that he personally purchased about $15 million in Berkshire shares and plans to buy extra yearly.
“I’m dedicated to doing this yearly,” Abel mentioned throughout an interview televised on CNBC. “My whole wage, so long as I’m CEO. We’ll file our 10-Okay, I’ll write the letter, and after the 48-hour cooling-off interval, I’ll buy.”
I’m not a billionaire like Abel, however beginning with a $50 bonus from the now-gone ShareBuilder brokerage website within the early 2000s, I’ve constructed up a pleasant little place in Berkshire Hathaway. At any time when there’s a new brokerage bonus, I want to purchase BRKB shares as a result of the long-term return will probably no less than match the S&P 500, and it by no means distributes dividends. This implies no 1099-DIV types to cope with on the finish of the 12 months, ha. I additionally by no means promote the shares, solely transfer them round for ACAT switch bonuses or they get merged into different brokers, so no 1099-B. This all provides up once you open as many new brokerage accounts as I do…
As a 20+ 12 months shareholder now, I really feel that Abel has been saying and doing all the appropriate issues to this point. Charlie Munger famously mentioned “Greg will maintain the tradition!”, and so I want him one of the best and am holding all my shares for now. In actual fact, I believe it’s fairly potential that Berkshire will carry out even higher price-wise within the subsequent decade as Abel takes a extra energetic function in areas that he likes. Buffett had his strengths and preferences, and Abel has his personal.
Nonetheless, no person is aware of what’s going to truly occur, and folks can change over time. Have a look at what number of billionaires on the market have been corrupted by energy and cash. I’ll miss the Buffett knowledge, however I’ll nonetheless be watching (and hopefully studying) from Berkshire’s actions since I’ve my very own “pores and skin within the recreation”.