Warren Buffett’s upcoming retirement from Berkshire Hathaway has raised concerns among investors. Greg Abel is set to take over as CEO at the beginning of next year. This leadership transition is causing some to question how much of Berkshire’s success is tied to Buffett’s leadership.
Berkshire Hathaway comprises a mix of privately held businesses like Dairy Queen, railroad operator BNSF, and insurer GEICO. It also has a diversified portfolio of publicly traded stocks. The company is sitting on $278 billion in cash.
Recent trading activities add to the uncertainty. Berkshire has reduced sizable stakes in Bank of America and Capital One Financial. At the same time, recent purchases of shares in companies like Constellation Brands and Domino’s Pizza have yet to show significant gains.
Buffett’s leadership and Berkshire’s future
It seems Buffett is cleaning house before his departure. Long-term stocks have been pared back.
Underperformers like Ulta Beauty and Kraft Heinz have been significantly reduced or are rumored to be on the chopping block. The upcoming Q2 report won’t include details of these stock trades. But it will likely draw attention to recent actions and possibly spur discussions about Berkshire’s strategic shifts.
This conversation, in turn, could impact confidence in the company’s future. Despite the concerns, Berkshire Hathaway is likely to remain promising even without Buffett’s presence. Its business fundamentals and investment portfolio position it for continued success, five, ten, and twenty years from now.
The Motley Fool has positions in and recommends several of the companies mentioned, including Bank of America, Berkshire Hathaway, Domino’s Pizza, and Ulta Beauty.
