Warren Buffett takes over as CEO of Berkshire Hathaway

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Berkshire Hathaway’s third-quarter results will be released Saturday morning. Operating profits soared and Buffett continued to hoard cash. Details can be found here.

Investors appear increasingly nervous about the year-end transition, as Warren Buffett will no longer be Berkshire’s CEO two months from now.

On May 2, the Friday before Buffett abruptly announced his plans to resign at the company’s annual meeting, Berkshire’s B stock It closed at a record high of just under $540 per share.

At that point they were ahead S&P500 For the year, it increased by 22.4 percentage points.

The gap with the benchmark index is now 10.9 percentage points, a slight improvement from Wednesday’s 12.2 percentage point difference, the largest so far in 2025.

B shares have fallen 11.5% since Buffett’s news announcement. This is still above its low in early August, when it fell about 15%, but below its near-term closing high of about $507 on September 4.

Analysts at Keefe, Bruyette & Woods are particularly concerned.

Berkshire’s rating was downgraded in a report dated October 26. A shares The company changed its rating from “market perform” (hold) to “underperform” (sell) and lowered its price target from $740,000 to $700,000.

The stock closed today at $715,740.

“GEICO’s underwriting margins are likely to peak, with lower real estate catastrophe reinsurance premiums, lower short-term interest rates, tariff-related pressures on railroads, and the risk of decline in alternative energy tax credits contributing to a downside to results over the next 12 months,” Meyer Shields and Jin Li wrote under the heading “A lot is going wrong.”

They blamed Buffett’s May announcement “largely” for the company’s underperformance compared to the S&P and other insurance stocks in recent months.

There’s also what they call Berkshire’s “historically unique succession risk,” which reflects “Mr. Buffett’s perhaps unparalleled reputation and what we see as an unfortunate lack of disclosure, which will likely deter investors who can no longer rely on Mr. Buffett’s presence at Berkshire Hathaway.”

That meant investors felt they could trust Mr. Buffett, even though Berkshire was run differently than most other companies, sometimes not issuing forecasts or meeting with analysts. Without him, Wall Street probably wouldn’t give the company and new CEO Greg Abel as much freedom.

In an article by Berkshire headlined “The New Normal…No ‘Buffett Premium,”’ the Wall Street Journal quoted KBW’s Shields as saying, “There are people who have such tremendous confidence in Warren Buffett that, for them, that is where the investment thesis begins and ends.”

But the magazine countered with Chris Blomstrand, president of Semper Augustus Investment Group, arguing that Berkshire was overvalued just before the May meeting and that Berkshire’s year-to-date gain of more than 5% significantly outperformed its GEICO rival. progressivedown 14%.

He has been buying the stock and doesn’t think Buffett’s career change is pushing down stock prices. “Everyone I know in the Berkshire world has nothing but praise and good things to say about Greg.”

Henry Asher of Northstar Group also told the paper that even if Mr. Abel’s stock-picking skills don’t match Mr. Buffett’s incredible track record, Berkshire’s operating companies will remain the same.

“They’re not going to cancel Burlington Northern’s shipments because Buffett isn’t there. Companies will continue to generate huge cash flows with or without Buffett.”

The Journal’s article confirms our prediction that Greg Abel will write an annual letter to shareholders starting next year.

(Mr. Buffett has already said that he will not be speaking at next May’s meeting as chairman.)

Buffett clearly foresaw the change in authorship when he wrote in this year’s letter before the May announcement that “in the near future, Greg Abel will replace me as CEO and write the annual letter.”

But he plans to write a letter to his three children and shareholders on Nov. 10, perhaps to accompany the family foundation gift that has become a Thanksgiving tradition in recent years.

Berkshire Hathaway disclosed in a filing this week that it sold 401,514 shares. davita on Monday for $54 million.

DVA stock has fallen nearly 8% this week after the dialysis company’s third-quarter profit fell short of analysts’ expectations due to higher patient costs and lower treatment volumes.

The stock price has fallen more than 20% during the year.

But this week’s relatively small sell-off is almost certainly not a response to falling stocks.

In its 2024 deal with DaVita, Berkshire pledged to keep its stock at no more than 45% of its outstanding shares.

In this week’s quarterly report, DaVita reported that the share buyback reduced its outstanding shares from 75.5 million to 70.6 million, while Berkshire’s stake increased to 45.6%.

Berkshire will reduce its total holdings to 31.8 million shares (currently valued at $3.8 billion), returning its stake to just 45.0%.

Similar sales have been made in recent quarters to maintain agreed levels.

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Warren Buffett said it’s natural for almost every government to devalue its currency, and that it’s “horrifying.”

Warren Buffett: We don’t want to own what we think is a currency that’s really going to hell. And that’s the big thing that concerns us about the U.S. currency.

This means that governments tend to devalue their currencies over time, and no system can beat this.

You can choose a dictator, you can choose a representative, you can do anything.

However, there will be a move towards a weaker currency, except for people.

And, of course, it’s — I mentioned it very briefly in the annual report, but what scares me in the United States is fiscal policy, because that’s the way fiscal policy is designed.

And all the motivation is to do many things that can cause problems with money.

But it’s not limited to the United States. It’s all over the world. In some places, things can get out of control on a regular basis.

You know, they’re devaluing at a breathtaking rate and it continues to do so. So you, too, people can study economics and make all sorts of arrangements.

But in the end, if you have someone to control the currency, you can issue paper money, you can do that, you can engage in currency clipping as was done centuries ago.

There will always be people. That’s the nature of their job, and I’m not singling them out as particularly evil or anything like that.

However, it is the natural progression of governments to depreciate their currencies over time, and that has important consequences.

And it’s very difficult to put checks and balances into the system to prevent that from happening.

And we’ve had a lot of fun lately, in the first 100 days or the last 100 days, whatever you want to call it, of what happens when people try to avoid fiscal risk.

And the game is not over yet, and ultimately never will be.

If you look at the Great Inflation after World War II, it’s just a list that goes on forever and the same names keep coming up.

In other words, the value of currency is terrifying.

Berkshire’s top public holdings by market value in the U.S., Japan, and Hong Kong, based on today’s closing prices.

Asset holdings are as of June 30, 2025, as reported in Berkshire Hathaway’s report filed with the 13th Floor on August 14, 2025. However, the following are excluded.

A complete list of holdings and current market value is available on CNBC.com’s Berkshire Hathaway Portfolio Tracker.

If you have any questions or comments about the newsletter, please send them to alex.crippen@nbcuni.com. (Sorry, we do not forward questions or comments to Mr. Buffett himself.)

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I also highly recommend Buffett’s annual letter to shareholders. It’s collected here on Berkshire’s website.

— Alex Crippen, Warren Buffett Watch Editor