TLDR
- In his inaugural shareholder letter, Greg Abel designated Apple (AAPL), American Express (AXP), Coca-Cola, and Moody’s (MCO) as permanent portfolio holdings
- The new CEO committed to continuing Buffett’s value-focused investment approach and maintaining the company’s robust balance sheet
- Operating earnings for Q4 declined 29% compared to the previous year, reaching $10.2 billion, with insurance operations contributing to the decline
- Bank of America and Chevron received no mention among Abel’s designated core positions
- Warren Buffett continues as chairman, maintaining a full-time office presence in an advisory capacity
Greg Abel has released his inaugural shareholder letter as Berkshire Hathaway’s CEO, highlighting four stocks designated for long-term retention while disclosing a significant quarterly earnings decline.
Abel assumed the CEO position from Warren Buffett at the beginning of 2026, following Buffett’s retirement announcement in May 2025. Buffett continues serving as chairman with a full five-day weekly office schedule.
The letter outlined four primary equity positions that Berkshire intends to maintain with “limited activity.” These include Apple, American Express, Coca-Cola, and Moody’s.
Abel characterized these as companies Berkshire “understands well,” featuring solid management teams and promising long-term growth trajectories. He indicated the company would only “significantly adjust” a position if fundamental long-term prospects deteriorated.
These four companies, combined with investments in five Japanese trading houses, represent approximately two-thirds of Berkshire’s total equity holdings. The aggregate value of these nine positions exceeds $200 billion.
Notable Absences from the Core List
Two positions ranking among Berkshire’s five largest were excluded from Abel’s core designation: Bank of America and Chevron. Berkshire reduced its Bank of America holdings by approximately half during the preceding 18 months, leaving roughly 517 million shares valued near $28 billion.
The Chevron position, valued around $20 billion, also failed to receive Abel’s “forever” designation. This exclusion has sparked considerable discussion among Berkshire observers.
Berkshire’s Apple investment has appreciated substantially beyond its initial purchase price. The company acquired shares at an average cost of approximately $27 each, while current trading levels hover around $264. Buffett previously reduced the Apple position by roughly 80% from its peak level, though Abel’s letter indicates further reductions are unlikely.
Q4 Earnings Decline
Berkshire disclosed Q4 operating earnings of $10.2 billion, representing a decrease of more than 29% from the prior year’s $14.56 billion. Insurance operations contributed to the earnings weakness.
For the complete 2025 fiscal year, Berkshire generated operating earnings of $44.5 billion, trailing 2024’s $47.4 billion while exceeding the five-year average of $37.5 billion.
Berkshire’s cash reserves and Treasury securities totaled $373.3 billion at Q4’s conclusion, declining modestly from the previous quarter’s $382 billion. Abel referenced this as “dry powder” available for deployment when attractive opportunities emerge.
Questions persist regarding daily portfolio management responsibilities. Abel lacks experience as a portfolio manager. Investment manager Ted Weschler will oversee approximately 6% of investments, maintaining his previous allocation before Buffett’s retirement.
Abel stated that “responsibility ultimately rests with me as CEO” concerning capital allocation choices, with Buffett remaining available for consultation.
