Warren Buffett is known as the Oracle of Omaha due to his investment success at the helm of Berkshire Hathaway (BRK.A 0.24%)(BRK.B 0.38%). The stock has created many millionaires under Buffett's watch, as it has wildly outperformed the broader market.
However, Buffett is handing the reins of CEO to top lieutenant Greg Abel at the start of 2026. Is Berkshire Hathaway still worth buying?
What is Berkshire Hathaway?
From a big picture point of view, Berkshire Hathaway is a massively diversified conglomerate. Under the company's umbrella, it owns businesses in various sectors, including insurance, transportation, utilities, energy, retail, and manufacturing, among others. It is one of the most diversified companies you are likely to find on Wall Street.
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However, Berkshire Hathaway isn't just a company; it is the investment vehicle of Warren Buffett. In some ways, it operates like a mutual fund. That's largely because Buffett takes a hands-off approach to management, preferring to focus on using the company's cash to invest in, and sometimes buy all of, other companies.
That's actually in keeping with how Buffett views investing. His approach is to buy well-run companies when they are attractively valued and then hold them for the long term, benefiting from the growth of those businesses over time. If a company in which Buffett has invested is doing OK, there's no need for him to get involved. Thus, he spends most of his time on how to invest Berkshire Hathaway's cash.
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A good model to follow, but could it be better?
When Buffett steps down, he will hand the company off to Greg Abel, who has worked under Buffett for decades. It is unlikely that the new CEO will step in and make dramatic changes to what has been a long, successful business approach. Moreover, Abel will still have to report to Buffett, since the former CEO will remain the chairman of the board of directors.
The risk of Abel making some early missteps, meanwhile, is mitigated by the company's strong balance sheet. At the end of the third quarter, the company held over $380 billion in cash and short-term investments. That cash is not only a safety valve, but it is also an opportunity since Abel could find constructive ways to put that money to work.
NYSE: BRK.A
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All of that said, there's another opportunity here that Abel may open up. While Buffett has been hands-off with the companies he has brought under the Berkshire Hathaway umbrella, Abel could take a more active role. If Abel does that well, it could lead to improved operating performance across the various companies Berkshire Hathaway owns.
This could be an interesting lever for Abel to pull, noting this Buffett comment from the 2024 annual report: "In 2024, Berkshire did better than I expected though 53% of our 189 operating businesses reported a decline in earnings." Clearly, 2025 could be different, but with 189 companies soon to be under Abel's tutelage, there's always going to be some business that could be improved. Abel's background is as a manager, so it wouldn't be surprising to see him take a more active role in the day-to-day operations of the company.
Subtle change could unlock material value
It is unlikely that Abel will suddenly and dramatically change the way Berkshire Hathaway operates. The current business model has been so successful that such a move would be difficult to justify, let alone get past Buffett and the rest of the board of directors. However, Abel is a different person and will manage the company differently than Buffett did.
If, as seems likely, Abel keeps the same basic approach when it comes to investing in companies, Berkshire Hathaway could still be a millionaire-maker stock. Meanwhile, if Abel takes a more active role with the companies Berkshire Hathaway owns, the story could be even more positive for long-term investors. That said, the value created from improving how Berkshire Hathaway's various businesses are run could take longer to materialize.
In other words, it may take some time before Wall Street fully understands how well Abel is really doing.
