TLDR
- Berkshire Hathaway’s new CEO, Greg Abel, designated Apple (AAPL), American Express (AXP), Coca-Cola, and Moody’s (MCO) as permanent “forever” holdings.
- In his inaugural shareholder letter, Abel commits to upholding Buffett’s value investing approach and maintaining a “fortress-like balance sheet.”
- Berkshire’s fourth-quarter operating earnings dropped 29% year-over-year to $10.2 billion, partially attributed to insurance segment underperformance.
- Bank of America and Chevron were conspicuous omissions from Abel’s list of core holdings.
- Warren Buffett will continue serving as chairman, working a five-day week in an advisory capacity.
In his first shareholder letter as CEO of Berkshire Hathaway, Greg Abel has outlined four stocks intended for long-term ownership and disclosed a significant quarterly earnings decline.
Abel succeeded Warren Buffett at the beginning of 2026, following Buffett’s retirement announcement in May 2025. Buffett retains the chairman title and will continue his five-day office schedule.
The letter pinpointed four core equity investments that Berkshire intends to maintain with “limited activity.” These are Apple, American Express, Coca-Cola, and Moody’s.
Abel characterized these companies as ones Berkshire “understands well,” praising their robust management and prospects for sustained growth. He stated the firm would only make a “significant adjustment” to a holding if its long-term prospects materially changed.
Together with investments in five Japanese trading houses, these four stocks constitute approximately two-thirds of Berkshire’s equity portfolio. The collective value of these nine holdings exceeds $200 billion.
What’s Not on the Forever List
Two of Berkshire’s top five holdings were excluded from the core list: Bank of America and Chevron. Berkshire has already reduced its Bank of America position by nearly half over the last 18 months, leaving about 517 million shares valued at approximately $28 billion.
Although Chevron’s stake is worth around $20 billion, it was also missing from Abel’s “forever” group, an omission noted by observers of the company.
Berkshire’s Apple investment is now valued significantly above its original cost. The average purchase price was about $27 per share, versus a current price near $264. While Buffett had previously trimmed the Apple stake by roughly 80% from its high, Abel’s letter indicates no plans for additional sales.
Q4 Earnings Take a Hit
Berkshire announced fourth-quarter operating earnings of $10.2 billion, a decline of over 29% from $14.56 billion in the year-ago period. The drop was partly fueled by softer results in the insurance operations.
For the full 2025 year, Berkshire recorded operating earnings of $44.5 billion, lower than the $47.4 billion in 2024 but higher than the five-year average of $37.5 billion.
The company’s cash and Treasury holdings totaled $373.3 billion at the end of Q4, a modest decrease from $382 billion the previous quarter. Abel referred to this reserve as “dry powder” available for deployment when attractive opportunities emerge.
The management of Berkshire’s daily equity portfolio remains an open question. Abel lacks a portfolio management background. Investment manager Ted Weschler will oversee only about 6% of the investments, a proportion consistent with the period before Buffett’s retirement.
Abel stated that “responsibility ultimately rests with me as CEO” for capital allocation choices, with Buffett on hand for consultation.
