TLDR
- In his inaugural shareholder communication, Berkshire Hathaway’s (BRK.B) CEO Greg Abel designated Apple (AAPL), American Express (AXP), Coca-Cola (KO), and Moody’s (MCO) as permanent portfolio positions
- Abel’s debut letter commits to continuing Warren Buffett’s value-focused investment approach and maintaining a robust financial position
- Fourth-quarter operating profits declined 29% compared to the previous year, reaching $10.2 billion, with insurance operations contributing to the shortfall
- Bank of America (BAC) and Chevron (CVX) were conspicuously excluded from the designated core holdings roster
- Warren Buffett retains his chairman position and continues working full-time in an advisory capacity
In his inaugural communication to shareholders as Berkshire Hathaway’s chief executive, Greg Abel has unveiled four equity positions he considers permanent fixtures while disclosing a significant quarterly earnings decline.
Abel assumed the CEO role from Warren Buffett in early 2026, following Buffett’s May 2025 retirement announcement. Buffett continues serving as chairman with a full-time presence at headquarters.
The letter pinpointed four cornerstone equity investments that Berkshire intends to maintain with “limited activity.” These include Apple, American Express, Coca-Cola, and Moody’s.
Abel characterized these as companies Berkshire “understands well,” featuring exceptional management teams and sustainable competitive advantages. He indicated the conglomerate would only “significantly adjust” these positions if fundamental long-term prospects deteriorated.
These four companies, combined with ownership stakes in five Japanese trading houses, represent approximately two-thirds of Berkshire’s public equity holdings. The aggregate market value of these nine investments exceeds $200 billion.
What’s Not on the Forever List
Notably absent from Abel’s core designation were two major holdings: Bank of America and Chevron. Berkshire has systematically reduced its Bank of America position by approximately 50% during the past year and a half, bringing it down to roughly 517 million shares valued near $28 billion.
The Chevron investment, currently valued around $20 billion, likewise failed to make Abel’s permanent holdings list. This exclusion has sparked considerable discussion among Berkshire analysts.
Berkshire’s Apple investment has generated substantial unrealized gains. The company’s average cost basis sits around $27 per share, while the current trading price hovers near $264. Although Buffett previously trimmed the Apple stake by roughly 80% from its peak level, Abel’s correspondence indicates no additional reductions are 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 figure of $14.56 billion. The downturn stemmed partially from underwhelming results across its insurance operations.
For fiscal year 2025, Berkshire generated operating earnings totaling $44.5 billion, trailing 2024’s $47.4 billion but exceeding the five-year average of $37.5 billion.
Berkshire’s cash reserves and Treasury securities reached $373.3 billion at quarter-end, slightly below the previous quarter’s $382 billion. Abel referred to this as “dry powder” available for deployment when attractive investment opportunities emerge.
Questions persist regarding day-to-day portfolio management responsibilities. Abel lacks experience as an investment portfolio manager. Investment executive Ted Weschler will oversee approximately 6% of investments, essentially unchanged from the pre-retirement structure.
Abel stated that “responsibility ultimately rests with me as CEO” regarding capital allocation choices, with Buffett remaining available for consultation.
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