When Greg Abel walked onstage in Omaha for his first annual meeting as CEO of Berkshire Hathaway, shareholders wanted one thing: a plan for the money. Specifically, the roughly $380 billion in cash and US Treasuries that Warren Buffett, his legendary predecessor, had piled up before handing over the keys. The 63-year-old Canadian did not provide one. Investors left the meeting with what reporters called 'unanswered questions' about how the new chief executive intends to deploy the largest war chest in corporate history.
What Abel did make clear is that he is in no rush. Berkshire disclosed it had sold another $8.1 billion of stock during his first quarter in charge — the 14th straight quarter the company has trimmed its equity portfolio. Like Buffett, Abel told the audience, he sees little worth buying at today's prices. The S&P 500 is trading at record highs even as the Iran war has pushed oil prices sharply higher and rattled global supply chains. 'It's not that we don't see exceptional companies out there today,' Abel said. 'But… we're not interested in acquiring those companies at that price.'
Still, several investors detected subtle shifts. Under Buffett, Berkshire almost never sold its wholly-owned subsidiaries — businesses ranging from the railroad BNSF to the car insurer Geico. Abel signaled he would be willing to 'divest out of businesses if they need to' if operations could be improved. Darren Pollock of Cheviot Value Management said Abel did not seem eager to sell off whole divisions, but the door was no longer closed. 'It clearly means that there is going to be more scrutiny,' said Christopher Rossbach of Berkshire investor J Stern & Co.
Here is the catch with Berkshire's giant cash pile: at this scale, even doing 'something' is hard. Abel acknowledged that most of Berkshire's stock portfolio sits in a small number of very large positions, meaning the active management of those holdings is 'really limited.' The company is, as Pollock put it, a giant tanker — capable of shifting a degree or two, but not of making sharp turns. Buying or selling a few billion dollars' worth of any one stock can move the market itself. Cash, meanwhile, isn't sitting idle: parked in Treasuries, it earns a steady return while Abel waits for the kind of market dislocation Buffett spent decades exploiting.
Abel reassured some skeptics by demonstrating fluency in the operating details of Berkshire's hundreds of subsidiaries, diving into margins at BNSF and Geico in a way Buffett rarely did. 'As far as operating these businesses, it does seem like Greg is more hands-on than Buffett,' Pollock said. Abel also seemed to share Buffett's investing 'DNA': the discipline of refusing to act when prices are wrong. The tightrope is that he is following a man widely considered the greatest investor of all time, whose strategies helped Berkshire outpace the S&P 500 by more than six million percentage points. Match that and shareholders will be thrilled. Stumble — by overpaying for an acquisition, or by sitting on cash so long that returns lag — and the comparisons will be brutal. For now, the message from Omaha is patience: keep looking, wait for turbulence, and pounce only when the market hands Berkshire a bargain worth its size.
Imagine inheriting nearly $380 billion in cash and being told: don't blow it. That's the awkward inheritance Greg Abel just received from Warren Buffett — and shareholders want a plan.
Greg Abel, the 63-year-old Canadian who replaced Warren Buffett as CEO of Berkshire Hathaway, just held his first annual shareholder meeting in Omaha. The big question hanging over the event: what is he going to do with the roughly $380 billion sitting in cash and US Treasuries that Buffett built up before stepping down?
Abel's answer was, essentially, not much yet. Berkshire sold another $8.1 billion of stock in his first quarter as chief executive — the 14th straight quarter the company has trimmed its equity portfolio. He told investors that, like Buffett, he isn't excited about jumping into a stock market trading near record highs.
Picture Berkshire as something between a giant investment fund and a holding company that owns dozens of whole businesses (railroads, insurance, utilities). Abel's challenge is unusual: he has too much cash, not too little.
Berkshire is a kind of national barometer. When the most respected investing operation on earth refuses to deploy cash, it's telling you something about how expensive markets are right now. If you're thinking about investing your first paycheck, putting money in an index fund, or choosing a career in finance, watch how Abel handles this — patience versus action is the central dilemma of investing, and he's about to demonstrate it on the biggest stage there is.
Buffett ran Berkshire for 60 years and beat the S&P 500 by more than 6 million percentage points — a record nobody is going to match. The interesting question isn't whether Abel can be Buffett (he can't), but whether he can preserve the *system* Buffett built: discipline, patience, and the willingness to look boring for years until a crisis hands you a bargain. Watch for the first big deal Abel actually pulls the trigger on — its size, its sector, and its timing will define his era.