The biggest change in years at Berkshire Hathaway (BRKA +1.35%)(BRKB +1.15%) occurred at the start of 2026, when Greg Abel replaced Warren Buffett as CEO, with Buffett taking on the role of president of the board. But how much really changed when it comes to stock picking? If Buffett's admission that he initiated a massive second-quarter investment in Alphabet (GOOG +0.80%) is any indication, the answer could be not much. But, perhaps that's the best outcome possible. Here's why.
Buffett was a good manager and a bad manager
Warren Buffett is famous because of his investment success. But that was largely driven by his acumen in buying good businesses at reasonable prices and holding them for the long term. It was not because he was good at running the businesses he bought outright for Berkshire Hathaway. In fact, Buffett was known as a hands-off manager, letting the CEOs of the businesses he acquired run them without his interference.
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That generally worked out well for Buffett and Berkshire Hathaway shareholders, but it has left the company with a sprawling collection of fully owned businesses. While many have little in common, others overlap materially. Abel has already made clear that he intends to take a different, more active approach.
When Berkshire Hathaway announced the $8.5 billion acquisition of Taylor Morrison Home, Abel specifically said that: "Over time, we expect to unify our site-built homebuilding operations into a combined platform enabling us to deliver the dream of homeownership to more Americans." It is highly unlikely that Buffett would have made a similar statement.
Given the size of Berkshire Hathaway's portfolio of owned companies, Abel likely has his hands full. Actively managing that portfolio and handling investments in Berkshire Hathaway's portfolio of publicly traded companies is a big ask. After all, Buffett himself basically only did one of those two jobs.
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Buffett won't be around forever
Buffett is already laying out the plans for his eventual passing, noting that he recently changed how he was giving away his ownership stake in Berkshire Hathaway (it's going to foundations run by his children). So investors can't expect the current separation of powers at the company to remain as it is forever, with Abel running the business side and Buffett handling the investment side.
However, the breakdown between running the business and running the investment portfolio makes logical sense. Both are big jobs. The current split could simply be a precursor to a new normal, in which one of Abel's lieutenants, or even a team, takes care of investing in publicly traded stocks. While that would be unusual for Berkshire Hathaway, it would be entirely normal for a large insurance company to operate in that manner.
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In fact, what investors may be watching unfold is really just a transition period. The old company leader, Buffett, could be slowly handing over the company to new leaders. The first step was the day-to-day management of the business, which went to Abel. The next step may be Buffett allowing more of the investment portfolio to be managed by others. Buffett has been doing this part of the job for so long that it probably makes sense to handle it as its own transition.
Abel is a different CEO from Buffett
Abel doesn't have any formal training in managing an investment portfolio. Running businesses, however, is something he's done for a long time. If the result of his taking the top spot at Berkshire Hathaway is that the insurance company starts to run more like other large insurers, with a separate asset management team, that's not a terrible outcome at all. In fact, it might be in the best interest of the company and its shareholders not to have everything resting on the shoulders of just one person, as was the case, at least in Wall Street's view, under Warren Buffett.
