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Greg Abel is in a tough position. He’s about to replace the most famous investor in the world as CEO of Berkshire Hathaway Inc. (BRK.A., BRK.B) at a time when economic uncertainty is the big story, value investing isn’t as popular, and some shareholders are questioning why the company is hoarding record amounts of cash—almost $350 billion.
Warren Buffett has said that Berkshire will be better under Abel’s management and has said Abel understands businesses “extremely well.” So what can we expect from Abel next? What has he said is “absolutely critical” for Berkshire’s future?
Key Takeaways
- Greg Abel says not much will change when he replaces Buffett as CEO of Berkshire Hathaway.
- Buying well-run, cash-generating companies with good long-term prospects at reasonable prices remains the company’s focus.
- Buffett has said that Abel “understands capital allocation as well as I do” and that Berkshire’s prospects “will be better under Greg’s management than mine.”
Berkshire’s Values Won’t Change
At the end of the first quarter of 2025, Berkshire Hathaway had about $348 billion in cash reserves. For some investors, that’s not a mark of success, but of missed opportunities.
Buffett has defended the company’s cash pile. “We have made a lot of money by not wanting to be fully invested at all times,” he said at Berkshire’s annual shareholder meeting in May. He has noted that sometimes, investment prospects are lacking. “Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities,” he wrote in his 2025 shareholder letter.
People tend to listen to him, but Abel might not be granted the same patience.
That pressure, however, isn’t expected to force Berkshire’s next CEO to shift corporate strategy. Abel has said that the approach that worked for the past 60 years—buying well-run, cash-generative companies with good long-term prospects at reasonable prices—will continue.
Cash Is King
Buffett often described Berkshire’s big stash of cash as a safety net rather than a sign of failure. Abel shares that philosophy. He said in May that access to lots of cash is “an enormous asset to have,” adding that it allows Berkshire to “weather the difficult times and not be dependent on anybody.”
Berkshire has so much to spend because it’s been selling ample holdings—more than $100 billion in stock in 2024 alone—and paring back share repurchases. Another reason is the nature of the businesses Berkshire owns.
Abel, who joined Berkshire in 2000, has said the company will continue to target and nurture companies generating lots of cash. “We have a great set of operating companies that do produce significant cash flows,” he said. “We intend to continue to ensure that’s a strength of Berkshire as we go forward. It’s absolutely critical to our long-term success.”
The Power of Patient Capital
Berkshire investors generally can’t complain about how the company has been run. However, some might hope the new boss won’t be so hesitant to spend cash.
Abel said that before pulling the trigger, “the value relative to the risks has to be right.” A key factor is determining the economic prospects of target companies five, 10, and 20 years from now and seeing if that’s reflected in the share price. If the valuation is too lofty or the company’s future is unclear, Abel said Berkshire won’t invest.
“It’s really the investment philosophy of how Warren and the team have allocated capital for the last 60 years,” he said. “It will not change, and it’s the approach we’ll take as we go forward.”
The Bottom Line
Berkshire Hathaway’s corporate strategy isn’t expected to change when Abel takes over as CEO. If a company doesn’t produce significant cash flows, trade at a reasonable price, or have clear long-term economic prospects, Abel says he won’t buy it, regardless of how much excess cash Berkshire is sitting on.
