Warren Buffett’s legacy at Berkshire Hathaway is set to continue through its robust investment strategy, a colossal cash pile, and the carefully selected successor, Greg Abel, making it a potentially powerful addition to any long-term portfolio.
For decades, Berkshire Hathaway (BRK.A, BRK.B) has been synonymous with its legendary leader, Warren Buffett. Often hailed as the Oracle of Omaha, Buffett built a reputation for a “slow-but-steady” value investing approach that has delivered remarkable compound returns over half a century. While the investment world recently received the long-anticipated news of Buffett’s retirement as CEO at the end of 2025, the conglomerate’s unique structure, diversified portfolio, and strategic succession planning suggest it remains a compelling prospect for patient investors.
Understanding Berkshire Hathaway’s Core Strategy
At its heart, Berkshire Hathaway is a holding company. It owns a vast array of subsidiaries, with a significant portion being insurance-based businesses like GEICO, General Re, and National Indemnity. The insurance model is key to Berkshire’s success: premiums are collected upfront, creating a substantial “float” – money that can be invested by Buffett and his team before it’s needed to pay claims. This unique cash-generating engine has been a cornerstone of its investment prowess.
Buffett’s investment philosophy is straightforward: “Money is made in investments by investing and by owning good companies for long periods of time,” he once stated. This focus on acquiring value companies and holding them has not only built immense wealth but also instilled a conservative, long-term mindset throughout the organization. This strategy has allowed Berkshire to outperform many competitors, even during challenging economic conditions like the COVID pandemic, as highlighted by The Motley Fool.
The Distinctive Share Structure: Class A vs. Class B
One of the most talked-about aspects of Berkshire Hathaway is its stock price. The Class A shares (BRK.A) are famously expensive, currently priced around $300,000 per share. This high price is intentional, a direct result of Warren Buffett’s refusal to split the stock. His reasoning, as explained in biographies, is to discourage short-term speculation: “I don’t want anybody buying Berkshire thinking that they can make a lot of money fast.”
However, accessibility for the average investor is provided through Class B shares (BRK.B), which trade at a much more accessible price, closer to $200 per share. While Class B shares come with fewer shareholder voting rights, they offer a credible alternative for investors seeking exposure to Buffett’s investment acumen without the hefty price tag of Class A. An additional benefit for Class B shares is the ability to be inherited without the recipient incurring a gift tax.
A Global Conglomerate of Diverse Holdings
Berkshire’s strength lies in its profound diversity, spanning numerous market segments. Beyond its robust insurance operations, the company owns significant stakes in a freight railroad, energy utilities, and manufacturing, service, and retail businesses. This broad diversification, from automotive and property insurance to increasing energy holdings through companies like Occidental Petroleum, makes Berkshire Hathaway exceptionally resilient across various economic cycles.
The conglomerate also holds a massive stock investment portfolio, often scrutinized by investors for insights into Buffett’s market views. Key holdings that consistently appear in its 13F filings include:
- Apple
- Bank of America
- American Express
- Coca-Cola
- Visa
- Mastercard
- Kraft Heinz
- Procter & Gamble
- Johnson & Johnson
These investments largely reflect Buffett’s preference for mature, staple American companies. While some long-standing holdings, such as Coca-Cola, have underperformed the S&P 500 in the new millennium, Berkshire has also made dynamic moves. Notably, at its annual meeting, the company announced the complete divestment of its airline holdings, a decision Buffett explained by stating, “we will not fund a company that…where we think that it is going to chew up money in the future.” Conversely, it significantly increased its stake in Bank of America, demonstrating a continuous recalibration of its portfolio.
The Oracle’s Next Chapter: Greg Abel and the Future
The announcement of Warren Buffett’s retirement as CEO at the end of 2025, with Greg Abel taking the helm, was a widely anticipated transition. Abel, who has been intimately involved in major decisions and steeped in Buffett’s investment and management philosophy for decades, is no unknown quantity. This planned succession minimizes uncertainty, ensuring a smooth transition built on continuity.
Buffett is not merely stepping aside; he is actively orchestrating Abel’s early success. Beyond the seamless leadership transfer, Buffett is handing off a colossal cash pile that stood at over $340 billion at the end of the second quarter of 2025, according to YCharts.
The Power of a Massive Cash Hoard
This enormous cash reserve, while potentially a drag on short-term financial performance during periods of lofty market valuations, represents a significant long-term opportunity. It signifies Berkshire’s disciplined approach, refusing to overpay for assets. Should a recession or bear market occur, Abel will have unparalleled firepower to acquire high-quality companies or increase stakes in existing holdings at attractive valuations, a classic Buffett maneuver.
Furthermore, Buffett is aiding Abel with tangible actions, such as the recent agreement to purchase Occidental Petroleum’s chemicals business for approximately $9.7 billion. This substantial deal, which barely makes a dent in Berkshire’s cash reserves, allows Abel to potentially claim early success upon its completion, while any challenges could still be attributed to the outgoing leadership’s initiation. Crucially, Buffett will remain as Chairman of the board of directors, providing an invaluable resource and guiding presence for Abel as he navigates his new role.
Long-Term Outlook: A Steady Hand in Volatile Markets
For long-term value investors, Berkshire Hathaway has historically proven to be a successful investment. Its conservative strategy and diversified holdings provide a significant buffer against economic shocks. While past performance never guarantees future returns, the foundational principles that have driven its success remain firmly in place.
The upcoming leadership change, rather than a cause for concern, appears to be a well-managed evolution. With Greg Abel inheriting a financially robust enterprise and benefiting from Buffett’s continued guidance as Chairman, Berkshire Hathaway is positioned to maintain its status as an “unshakeable fortress” in the investment landscape. Investors looking for a stable, diversified holding with strategic growth potential would do well to consider Berkshire Hathaway as a cornerstone of their portfolios.
