After Buffett’s retirement, Berkshire Hathaway released its latest financial results: Q1 net profit surged 120%, and cash holdings exceeded $270 billion—a record high. How should we interpret this?

This trend began in the latter half of Buffett’s tenure—and under Abel, it has shown no signs of slowing down. Moreover, Berkshire isn’t selling off losing or low-quality stocks; it’s trimming positions in high-performing, blue-chip names. For instance, it continues reducing stakes in Apple and Bank of America—and most dramatically, slashed its Amazon position by 77%. The rationale? These companies’ stock prices have risen so sharply that they now exceed Berkshire’s own conservative estimates of intrinsic value. Next, consider the resumption of share buybacks. Buffett’s longstanding rule was to repurchase shares only when Berkshire’s stock price traded below his conservative estimate of intrinsic value—and specifically, he refused to buy back shares if the price rose above 1.2x book value per share. Berkshire’s last share repurchase occurred in May 2024; for the next 22 months, Buffett steadfastly declined to repurchase—even as cash piled up. Abel has now broken that streak: in Q1 alone, Berkshire spent $234 million on buybacks, at prices ranging between 1.45x and 1.5x book value—significantly higher than Buffett’s prior upper threshold. The market offers two interpretations: one, that Abel is more aggressive and deliberately lowered the buyback threshold; the other, that even with Buffett’s original criteria adjusted upward, Berkshire remains the cheapest large-cap stock across the entire U.S. equity market. Whichever interpretation proves correct, one conclusion is clear: Abel believes Berkshire’s stock is a better value than *any* other stock available. And Abel put his money where his mouth is: in early March, he spent $15.3 million to purchase 21 shares of Berkshire Class A stock—and pledged that, for as long as he serves as CEO, he will use his entire annual salary to buy Berkshire shares. When a CEO personally invests substantial capital into his company—and the company itself simultaneously conducts buybacks—the message is unambiguous: Abel views Berkshire’s current stock price as cheaper than the stocks it’s selling. This suggests a potential trading idea: go long on Berkshire Class B shares. The market now knows Abel will repurchase shares near current valuations—effectively establishing a floor under the stock price. Add to that an 18% year-on-year rise in operating profit, plus $14 billion in annual Treasury bill interest income, and downside risk appears extremely limited. Upside potential, meanwhile, hinges on how quickly Abel deploys Berkshire’s $380 billion in cash. If that cash remains idle indefinitely, Berkshire’s compounding growth rate will inevitably slow. Historically, Berkshire’s greatest advantage lay in Buffett’s ability to secure massive private deals unavailable to others—but Abel has yet to demonstrate he possesses that same capability.

The Post-Buffett Era at Berkshire Hathaway: Abel’s First Report Card

The central question is whether, with Buffett stepping into the background, new CEO Greg Abel can sustain—and even replicate—Berkshire Hathaway’s historic success. Since assuming leadership, Abel has taken two major actions: 1. Resumed share repurchases; 2. Personally purchased Berkshire stock. Details were disclosed in Berkshire’s Form 8-K filing dated March 4: So long as the company judges the repurchase price to be below its conservative estimate of intrinsic value, it may repurchase Class A and Class B common shares at any time—with no mandatory minimum purchase volume. First, regarding share repurchases: Berkshire is not a company that resorts to buybacks merely to prop up market confidence or maintain appearances. Buffett consistently emphasized that buybacks make sense only when the stock trades below intrinsic value—making them a rational capital allocation decision. Thus, Abel’s decision to resume buybacks signals that, in his view, Berkshire’s current share price represents an attractive investment—not a symbolic gesture. Second—and even more telling—Abel purchased 21 shares of Berkshire Class A stock for approximately $15.3 million. His current annual cash compensation stands at $25 million; this purchase effectively equates to reinvesting nearly his entire after-tax income back into the company. He also publicly committed to using his full after-tax salary to buy Berkshire shares every year for as long as he remains CEO. This goes far beyond routine ‘executive stock purchases.’ At many firms, CEOs buy token amounts—largely as a symbolic gesture of alignment with shareholders. Abel’s action is fundamentally different.

Director of H.B. Fuller R. Bailly Buys More Stock

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H.B. Fuller Director R. Bailly purchased $500k worth of shares at $50 each, marking the largest insider buy in a year. This move signals strong insider confidence above the current market price.

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