Warren Buffett Stepping Down as Berkshire Hathaway CEO, Greg Abel to Take Over
Investment Highlights and Lowlights in Berkshire Hathaway's Six-Decade Journey under Warren Buffett's Leadership
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In a surprise move, billionaire investor Warren Buffett has announced that he plans to step down as CEO of Berkshire Hathaway by the end of 2025. The 94-year-old, who has been at the helm of the conglomerate for over five decades, made the revelation on Saturday.
Buffett took control of Berkshire Hathaway in 1965, transforming it from a struggling textiles manufacturer into a powerhouse conglomerate. Over the years, he has been known for his shrewd investments and nicknamed the "Oracle of Omaha," a reference to his hometown in Nebraska.
His investments have ranged from insurance companies to tech giants, and while some have been home runs, others have been misses. Here are some of his biggest hits and misses:
Buffett's Best Investments
- National Indemnity and National Fire & Marine: Purchased in 1967, these insurance companies provided the capital for many of Berkshire's investments through the years, thanks to insurance float. Today, Berkshire's insurance division includes Geico, General Reinsurance, and several other insurers, with a float of $173 billion.
- American Express, Coca-Cola, and Bank of America: Buffett's faithful purchases of these companies during times of scandal or market downturn have paid off handsomely. The collective worth of these shares is now over $100 billion more than the amount Buffett paid for them, and that's without counting the dividends he's collected over the years.
- Apple: Buffett, who previously expressed hesitancy about tech companies, started buying Apple shares in 2016. He saw Apple as a consumer products company with highly loyal customers, and his investment grew to over $174 billion before he started selling Berkshire Hathaway's shares.
- BYD: On the advice of his late investing partner Charlie Munger, Buffett invested $232 million in BYD, a Chinese electric vehicle maker, in 2008. The value of that stake soared to more than $9 billion before Buffett began selling it off. Berkshire's remaining stake is still worth about $1.8 billion.
- See's Candy: Buffett credits this 1972 purchase as a turning point in his career. He bought the candy company for $25 million and recorded pretax earnings of $1.65 billion from See's through 2011. The value continues to grow, although Buffett doesn't routinely highlight it.
- Berkshire Hathaway Energy: Utilities provide a steady stream of profits for Berkshire. The conglomerate paid $2.1 billion for Des Moines-based MidAmerican Energy in 2000 and has since made several acquisitions, including PacifiCorp and NV Energy. Utilities added more than $3.7 billion to Berkshire's profit in 2024.
Buffett's Worst Investments
- Berkshire Hathaway: Buffett has characterised his initial investment in the Berkshire Hathaway textile mills as his worst investment ever. The textile company hemorrhaged money for many years before Buffett finally shut it down in 1985, but the Berkshire shares he began buying for $7 and $8 a share in 1962 are now worth $809,350 per share.
- Dexter Shoe Co.: Buffett calls buying Dexter in 1993 for $433 million a "disastrous mistake." He gave away 1.6% of Berkshire for a worthless business, he says.
- Missed Opportunities: Buffett has lamented not investing in tech giants like Amazon, Google, or Microsoft early on. He also missed out on a potential $10 billion profit when he failed to follow through on a plan to buy 100 million Walmart shares.
- Selling Banks Too Soon: Not long before the COVID pandemic struck, Buffett seemingly soured on most of his bank stocks. He unloaded many of his shares, including Wells Fargo and JP Morgan, at prices far below current levels.
- Blue Chip Stamps: Buffett and Munger took control of Blue Chip in 1970, but as trading stamps fell out of favor, sales steadily declined. However, the float generated by Blue Chip was used to acquire See's Candy, Wesco Financial, and Precision Castparts, all of which have become steady contributors to Berkshire.
Buffett will remain involved with Berkshire Hathaway as Chairman of the Board, with Greg Abel, the Vice Chairman of Berkshire Hathaway overseeing non-insurance operations since January 2018 and chairman of Berkshire Hathaway Energy, set to take over as CEO starting January 1, 2026. Abel is expected to maintain Buffett’s investment philosophy and approach.
- As Warren Buffett transitions from CEO to Chairman of Berkshire Hathaway, investors may be wondering about the future direction of their stock portfolio.
- For those seeking insights into the world of finance and investing, following the moves of both Warren Buffett and Greg Abel in the DEFI market could prove valuable.
- With Abel overseeing non-insurance operations, the technology sector is expected to play a significant role in Berkshire Hathaway's strategy, including potential investments in tech giants and new businesses.
- Additionally, entertainment industry professionals might find it interesting to observe how these financial gurus might choose to invest in or collaborate with media companies and content providers.
- Enthusiasts of electronic trading platforms will likely keep a close eye on Berkshire Hathaway's approach to crypto and blockchain technologies, potentially embracing innovation in this burgeoning field.
- Regardless of the sectors involved, the investment philosophy and successful track record of both Buffett and Abel suggest that their decisions should be keenly observed by anyone interested in the finance, business, or market landscape in the coming years.
