In the post-Buffett era, Berkshire is sitting on a mountain of cash. How the new CEO plans to use the huge cash reserve
Berkshire Hathaway's new CEO, Greg Abel, has told shareholders that he will prudently manage the company's huge cash reserves and continue its disciplined investment strategy as he tries to establish himself as Warren Buffett's successor, reports Reuters.
During the annual meeting of shareholders, the first after Buffett's retirement from the position of CEO that he held for 60 years, Abel emphasized that the group will avoid bureaucracy and will remain faithful to the principles that consecrated the company, writes News.ro.
“We don't want to be constrained by anyone”, he declared, also answering a question addressed by Buffett.
Financial results indicate solid performance: Berkshire Hathaway's operating profit rose 18% in the first quarter, reaching $11.35 billion.
At the same time, the company has accumulated a record level of cash, of 380.2 billion dollars, which Abel intends to allocate cautiously.
The transition comes at a difficult time, when investors are increasingly attracted to technology and artificial intelligence, at the expense of the conglomerate's diversified model, which includes businesses in insurance, energy, industry and retail.
In this context, the company's shares lagged behind the S&P 500 index by 39 percentage points, since the announcement of Buffett's retirement.
Although he remains chairman of the company, Warren Buffett attended the event and expressed his support for his successor, stating that “Greg does everything I did and more.” At the same time, he praised the performance of Apple and its CEO, Tim Cook, one of Berkshire's most profitable investments.
Attendance at the event was lower than in previous years, marking the beginning of a new phase for the conglomerate after the era of Buffett and former vice president Charlie Munger, who died in 2023.
Abel reiterated his long-term investment philosophy, saying he prefers to hold assets “forever” and avoid investments he doesn't fully understand.
He emphasized that it is not necessary that all available capital be invested quickly, even if market pressures are high.
In parallel, the company timidly began to buy back its own shares, with $234 million in the first quarter, the first operation of this type since May 2024, signaling that it sees opportunities even in its own capital.
