Warren Buffett Steps Down as Berkshire Chairman. Here’s What Investors Should Watch Next
Conglomerates reward investors who are willing to wait. They can look especially attractive when markets are expensive and the biggest growth trades are already packed.
Warren Buffett’s exit as Berkshire Hathaway chairman makes this a good time to see whether the model still holds up without him.
Berkshire loses its anchor
Buffett is stepping down as chairman and becoming chairman emeritus. His son Howard Buffett will take the chair under a longstanding succession plan, while Greg Abel remains chief executive after taking over in January.
This is more than a change at the top. Berkshire’s success came from running businesses well and putting their profits to work in the right places. Buffett used that approach to turn a failing textile mill into a conglomerate worth roughly $1T.
Berkshire delivered a 19.7% compounded annual return under Buffett, nearly twice the S&P 500’s return. His successors are inheriting a company built around a record few investors have ever matched.
“Father Time always wins.”
Warren Buffett, Berkshire Hathaway
Buffett will remain a director and continue sharing his judgment. Abel will run the company, while Howard will protect the culture behind it.
The portfolio question grows
Attention now turns to Berkshire’s equity portfolio, which is worth more than $350B. Its biggest names include Apple, American Express, Coca-Cola, and Alphabet.
Alphabet has grown into a roughly $35B position, making it one of Berkshire’s largest holdings. Buffett remained involved in the investment, showing how much the portfolio still depended on his eye for opportunity.
Abel has spent his career running businesses rather than picking stocks. Barron’s reported that he has no formal portfolio management experience and has mostly focused on Berkshire’s operations.
The company itself is not the concern. The real test is whether Berkshire can keep earning its premium without Buffett choosing where the money goes.
The cash pile is finally moving
Berkshire’s enormous cash pile gives Abel time to prove himself. CNBC reported that the company held $365.5B in cash, giving it plenty of room to act when markets fall.
That safety comes at a price. Cash cushions losses during a selloff but holds back returns when Berkshire cannot find enough good deals.
The stock is already feeling that drag. Berkshire shares have gained just 1% in 2026, while the S&P 500 is up more than 11%.
Abel has started putting some of the money to work. Berkshire repurchased $4.5B of stock in the second quarter, according to CNBC.
The company also agreed to buy homebuilder Taylor Morrison for $6.8B. It was Abel’s first major acquisition as chief executive.
Culture becomes governance
Howard Buffett will not run Berkshire’s businesses. His job is to protect the culture and values his father spent decades building.
He has served as a Berkshire director since 1993. His background includes farming, public service, corporate boards, and philanthropy rather than managing a sprawling conglomerate.
That is exactly how the succession plan was designed. Warren Buffett told The Wall Street Journal that Howard would not run the company.
Howard will lead the board and resist changes that could pull Berkshire away from its roots. He has also said its headquarters will never move from Omaha, Nebraska.
Buffett built a culture around patience, trust, and independence. Howard now has to keep it intact without letting Berkshire stand still.
The rotation widens
Investors looking beyond Berkshire have smaller conglomerates to consider. MarketWatch, pointed to five Japanese trading houses that follow a similar approach.
They are Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. Berkshire owns about 10% of each company, according to the report.
Their smaller size could leave more room to grow. Market values range from roughly $55B for Marubeni to about $115B for Mitsubishi.
Their valuations are also lower. The group trades at 13 to 16 times forecast earnings, based on FactSet figures cited by Morningstar. The S&P 500 trades at 3.2 times sales.
They are not perfect replacements for Berkshire. US investors must deal with currency swings and different disclosure standards.
Berkshire is still the gold standard for conglomerates. The question is whether to stay with Buffett’s fortress or follow his money into smaller versions of the same idea.
