TLDR
- In his inaugural shareholder letter, Greg Abel designated Apple (AAPL), American Express (AXP), Coca-Cola, and Moody’s (MCO) as permanent “forever” investments for Berkshire Hathaway
- The new CEO committed to continuing Warren Buffett’s value-focused investment philosophy and maintaining financial strength
- Fourth quarter operating profits declined 29% compared to the previous year, landing at $10.2 billion, with insurance underperformance contributing to the drop
- Major holdings Bank of America and Chevron were conspicuously missing from the permanent holdings designation
- Warren Buffett continues as chairman with plans to work from the office five days weekly in a consulting capacity
Greg Abel has published his inaugural shareholder communication as Berkshire Hathaway’s chief executive, outlining four equities designated for long-term retention while disclosing a significant quarterly profit decline.
Abel assumed leadership from Warren Buffett in early 2026, following Buffett’s May 2025 retirement announcement. Buffett maintains his chairman position and continues maintaining a full-time office presence.
Within his letter, Abel highlighted four primary equity investments that Berkshire intends to maintain with “limited activity.” The quartet consists of Apple, American Express, Coca-Cola, and Moody’s.
Abel characterized these companies as enterprises Berkshire “understands well,” featuring exceptional management teams and sustained growth prospects. He indicated the conglomerate would only “significantly adjust” a position if fundamental long-term prospects deteriorated.
These four equities, combined with ownership stakes in five Japanese trading houses, represent approximately two-thirds of Berkshire’s stock portfolio. The aggregate valuation of these nine positions exceeds $200 billion.
What’s Not on the Forever List
Two investments ranking among Berkshire’s five largest positions didn’t make Abel’s core holdings designation: Bank of America and Chevron. Berkshire has trimmed its Bank of America investment by approximately half during the preceding 18 months, reducing it to roughly 517 million shares valued near $28 billion.
The Chevron investment carries an approximate $20 billion valuation but likewise didn’t receive “forever” status in Abel’s communication. This exclusion has sparked discussion among Berkshire analysts.
Berkshire’s Apple investment has generated substantial gains relative to its acquisition cost. The conglomerate’s average purchase price was approximately $27 per share, contrasted with today’s price around $264. While Buffett had reduced the Apple position by roughly 80% from peak levels, Abel’s correspondence indicates further reductions aren’t anticipated.
Q4 Earnings Take a Hit
Berkshire disclosed fourth quarter operating profits of $10.2 billion, representing a decline exceeding 29% from the prior year’s $14.56 billion. The deterioration stemmed partially from diminished insurance segment results.
For complete year 2025, Berkshire generated operating profits of $44.5 billion, trailing 2024’s $47.4 billion though surpassing the five-year average of $37.5 billion.
Berkshire’s combined cash and Treasury securities totaled $373.3 billion at quarter end, declining modestly from the preceding quarter’s $382 billion. Abel referenced this as “dry powder” positioned for deployment when attractive opportunities emerge.
Questions persist regarding operational management of Berkshire’s equity investments. Abel lacks portfolio management experience. Investment executive Ted Weschler will oversee approximately 6% of investments, essentially unchanged from the Buffett era.
Abel stated that “responsibility ultimately rests with me as CEO” regarding capital deployment choices, with Buffett available for consultation.
