Warren Buffett is best known for being the chief executive officer of Berkshire Hathaway (BRK.A 0.70%) (BRK.B 0.68%), but Wall Street's focus is often on the stock portfolio inside the conglomerate. In other words, Buffett is followed because he is a highly successful stock picker. But is he really? This quote suggests another way to view the Oracle of Omaha's success.
What does Warren Buffett really do?
Buffett isn't usually very talkative when it comes to his investment approach. The best we have is broad strokes. The quick overview is that he buys well-run companies when they are attractively priced. Then Buffett holds for the long term so he can benefit from the growth of the businesses he buys over time. That is simple in theory, but much harder to put into practice.
The problem is that there's a missing piece. This quote sums it up: "The difference between successful people and really successful people is that really successful people say no to almost everything."
That includes the temptation to pursue every good investment idea you have. Now, to be fair, Buffett does not say no to everything. At the end of 2024, Berkshire Hathaway owned a widely diversified portfolio of 189 companies outright (they are subsidiaries), and it has a portfolio of publicly traded stocks on top of that (about 40 at the end of the second quarter of 2025). The common stock portfolio changes over time as well. So Buffett has said yes to a large number of investments.
He's controlled Berkshire Hathaway since 1965. So 2025 marks roughly 60 years of investing using the Berkshire umbrella as his main investment vehicle. I don't know for sure, but I believe I've traded more stocks than Buffett in much less time, and I only own about 30 today. And some day traders probably buy and sell more in a week than Buffett has traded in his entire life.
What does this have to do with Berkshire Hathaway now?
The problem with buying Berkshire Hathaway today is that Warren Buffett is slated to hand over the CEO position to lieutenant Greg Abel at the end of 2025. Investors have reacted by selling Berkshire Hathaway stock, concerned that a big change is coming.
But Buffett has been training Abel since he joined the company in 1999. At that point, Abel was the president of energy company MidAmerican, a company in which Berkshire Hathaway had acquired a controlling interest. Abel was promoted to CEO of MidAmerican in 2008, presumably with Buffett's blessing. (MidAmerican is now known as Berkshire Hathaway Energy.)
Since 2021, Abel has been the heir apparent to the CEO position at Berkshire Hathaway. He has, presumably, been involved in every major investment decision since that point, or earlier. So he's spent more than two decades watching Buffett and being mentored by him. It seems likely that Abel is steeped in Buffett's approach when it comes to running Berkshire Hathaway.
Abel will run the company and invest differently from Buffett because he is not Buffett. But he will probably take a very similar approach, which includes being selective about his investments. And it seems highly unlikely that he will suddenly begin to dismantle the subsidiary portfolio that Buffett built. In other words, Berkshire Hathaway will largely be run in a similar manner in 2026 and beyond.
But there's a safety valve, and it involves Buffett. Buffett is stepping down as CEO, but he will be the chairman of the board of directors. Abel's boss is still going to be his boss, just with a different relationship existing between the two of them.
Abel as CEO will have to get any big investment decisions approved by the board. Doing a big transaction will mean convincing Buffett that a purchase makes sense. If Abel gets too aggressive, which seems unlikely, Buffett (and the rest of the board) will be there to rein him in. So Berkshire Hathaway should remain a very selective investor, saying no to more investment opportunities than it says yes to.
Abel has his work cut out for him
Warren Buffett is a tough act to follow. And, to make things more complicated, Abel is inheriting a balance sheet with more than $340 billion in cash, as of the end of the second quarter of 2025. It will be tempting to use that cash for investments or acquisitions. But it is a testament to Buffett and Abel that they have let the cash balance grow even as the market has risen, hinting that they don't see anything worth buying. At least not yet.
When there's a bear market, that may well change. But given Buffett's training and Abel's history of helping to run Berkshire Hathaway, I'm fairly confident he's not going to burn through the dry powder buying mediocre businesses. It is far more likely that, when the time is right, and with Buffett's blessing, Abel will make a big acquisition (or two) with the same level of discretion Buffett has long shown.
In other words, despite the price swoon that suggests investors are worried about the pending leadership change, I believe that saying no (something I wish I did more often) is engrained in the Berkshire Hathaway approach that Buffett has created and is about to pass on. And that means the decline in the stock since Buffett said he would step aside could be an exciting entry point for investors who think in decades, like Buffett and, likely, Abel.
