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Berkshire Hathaway has released its final quarterly results under Warren Buffett, reporting a nearly 30% drop in operating earnings, while new CEO Greg Abel issued his first, longer shareholder letter affirming continuity in culture and capital discipline.
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Abel’s emphasis on retaining earnings over dividends and his reassurance that Berkshire’s very large cash pile is not a retreat from investing highlight how capital deployment philosophy may evolve in the post-Buffett era.
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We’ll now examine how Abel’s stance on retaining earnings and patient cash deployment shapes Berkshire Hathaway’s investment narrative for shareholders.
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To own Berkshire today, you need to be comfortable with a slower growth profile, a very large cash position and a management team that prizes balance sheet strength over headline earnings. Greg Abel’s first quarter in charge delivered a near 30% drop in operating earnings, largely from insurance, and his letter leaned hard into retaining earnings rather than paying dividends, which reinforces Berkshire’s long-standing reinvestment mindset rather than upending it. In the short term, the key catalysts remain how that cash hoard is put to work and whether any large acquisition or stepped-up buybacks emerge, alongside clarity on troubled exposures like Kraft Heinz and PacifiCorp’s wildfire liabilities. The latest results do not radically alter that picture, but they do push insurance performance and regulatory risk higher up the watch list.
However, one risk around Berkshire’s utility and wildfire exposure deserves closer attention. Berkshire Hathaway’s shares have been on the rise but are still potentially undervalued by 40%. Find out what it’s worth.
Nineteen private investors in the Simply Wall St Community place Berkshire’s value between about US$659,800 and a very large US$1.26 million per A share, underlining how far views can stretch. Set that against the current focus on insurance weakness and wildfire liabilities, and you can see why it pays to compare several perspectives before forming your own view.
Explore 19 other fair value estimates on Berkshire Hathaway – why the stock might be worth as much as 66% more than the current price!
Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.