TLDR
- In his inaugural shareholder letter, new Berkshire Hathaway CEO Greg Abel designated Apple (AAPL), American Express (AXP), Coca-Cola, and Moody’s (MCO) as permanent portfolio holdings
- Abel committed to continuing Warren Buffett’s value-focused investment philosophy and preserving the company’s robust financial foundation
- Fourth-quarter operating profits declined 29% compared to the previous year, reaching $10.2 billion, partially attributed to insurance sector challenges
- Major holdings Bank of America and Chevron were conspicuously excluded from Abel’s list of core investments
- Warren Buffett continues as chairman with plans to work from the office full-time in a consulting capacity
Greg Abel has published his inaugural shareholder communication as Berkshire Hathaway’s chief executive, outlining four equity positions he intends to maintain indefinitely while disclosing a significant decline in fourth-quarter profits.
Abel assumed the CEO position from Warren Buffett in early 2026, following Buffett’s May 2025 retirement announcement. Buffett continues to serve as chairman and maintains a five-day weekly office presence.
Within the communication, Abel highlighted four primary equity investments that Berkshire intends to retain 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 capable management teams and promising long-range growth trajectories. He noted the firm would only “significantly adjust” these positions if fundamental long-term prospects deteriorated.
These four investments, combined with ownership positions in five Japanese trading corporations, represent approximately two-thirds of Berkshire’s total equity holdings. The aggregate valuation of these nine positions exceeds $200 billion.
What’s Not on the Forever List
Notably absent from the permanent holdings category were two companies currently among Berkshire’s five largest positions: Bank of America and Chevron. The conglomerate has substantially reduced its Bank of America ownership over the preceding 18 months, cutting the position approximately in half to roughly 517 million shares valued near $28 billion.
The Chevron investment, currently worth approximately $20 billion, was similarly excluded from Abel’s designated “forever” holdings. This exclusion has sparked considerable discussion among Berkshire analysts and investors.
Berkshire’s Apple investment has appreciated substantially beyond its initial purchase price. The firm’s average cost basis sits around $27 per share, while the current trading price hovers near $264. Although Buffett had previously reduced the Apple position by roughly 80% from its highest level, Abel’s communication indicates no additional reductions are contemplated.
Q4 Earnings Take a Hit
Berkshire disclosed fourth-quarter operating profits of $10.2 billion, representing a decline exceeding 29% from the $14.56 billion recorded during the corresponding period one year earlier. The downturn stemmed partially from diminished results within its insurance operations.
For calendar year 2025 overall, Berkshire generated operating earnings of $44.5 billion, trailing 2024’s $47.4 billion figure but surpassing the five-year average of $37.5 billion.
Berkshire’s combined cash reserves and Treasury securities totaled $373.3 billion at quarter-end, showing a modest decrease from the preceding quarter’s $382 billion. Abel referenced this substantial liquidity as “dry powder” available for deployment when attractive investment opportunities emerge.
Uncertainty persists regarding oversight of Berkshire’s ongoing equity portfolio management. Abel lacks experience as a professional portfolio manager. Investment executive Ted Weschler will oversee approximately 6% of total investments, essentially unchanged from his responsibilities prior to Buffett’s retirement.
Abel stated that “responsibility ultimately rests with me as CEO” regarding capital deployment decisions, with Buffett remaining available for consultation.
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