Things have changed significantly for Berkshire Hathaway (BRKA 0.46%) (BRKB 0.38%) during the past five years. One of the conglomerate's architects, Charlie Munger, died back in 2021. And last year, its longtime chief executive officer and legendary investor, Warren Buffett, said he was stepping down as the company's head. Given these changes, many investors are skeptical of Berkshire Hathaway's future. However, there are still good reasons to buy the stock. Let's consider two of them.
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1. An enduring culture
What has made Berkshire Hathaway so successful during the past few decades? Buffett and Munger's leadership is undoubtedly an important part of it. They ran the company, acquired new subsidiaries, and invested in stocks according to a set of principles and a culture they fostered across the entirety of the business.
It's going to be hard for anyone to fill Buffett and Munger's shoes, but Greg Abel, the company's new CEO, seems determined to run Berkshire Hathaway according to the same set of principles, something he communicated quite explicitly both within the company and to outside observers.
As Abel said in his recent first letter to shareholders as CEO of the conglomerate, "Last month, I sent a letter to our employees to emphasize that Berkshire's culture and values remain unchanged and will continue into perpetuity."
NYSE: BRKA
Key Data Points
Abel shared this letter with Berkshire Hathaway's shareholders. Now, the good news is that Abel does not have to emulate Buffett and Munger exactly. After all, when the latter first started, they had nothing like a Berkshire Hathaway in its current iteration to work with. Abel is inheriting a robust, cash-rich corporation with a significantly diversified pool of subsidiaries, many excellent leaders, and a culture and legacy of excellence. He isn't building from scratch.
It's not that leading Berkshire Hathaway from here on out will be easy, but having to start over would be exponentially harder, in my opinion. Given Abel's long tenure with the company, his track record as he oversaw the company's noninsurance operations, the fact that he was chosen by Buffett himself, and his intention to keep the foundations and culture of the business intact, Berkshire Hathaway's future still looks bright.
2. Scooping up shares on the dip
Buffett announced his retirement on May 3, 2025, during the company's annual shareholder meeting. The stock fell sharply after the announcement, and although it has recovered somewhat, it is still down almost 10% since then. Meanwhile, the S&P 500 is up by a strong 20% during the same period.
Berkshire Hathaway's poor share performance during the past 10 months no doubt reflects the fact that some investors no longer want anything to do with the company now that Buffett isn't leading it. For those who put their faith -- and it isn't a blind faith, as we have seen -- in Abel's ability to successfully head the company from here on out, this represents a great opportunity to purchase Berkshire Hathaway's shares on the dip.
