Berkshire Hathaway: The Complete Investment Guide for 2026

Understanding the Investment Powerhouse

Berkshire Hathaway stands as one of the most successful conglomerates in corporate history. What began as a struggling textile manufacturer was transformed over six decades into one of the world's most successful companies, now valued at over $1 trillion. As the company enters a new chapter with Greg Abel assuming the CEO role on January 1, 2026, investors worldwide are watching closely to understand what this transition means for their portfolios.

This comprehensive guide explores everything you need to know about Berkshire Hathaway: its business model, investment strategy, leadership transition, financial performance, and what the future holds under new leadership.

What is Berkshire Hathaway? A Business Overview

Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) is a multinational conglomerate holding company headquartered in Omaha, Nebraska. The company engages in diverse business activities, including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing and services.

Core Business Segments

1. Insurance Operations: The foundation of Berkshire's success lies in its insurance businesses, including GEICO and National Indemnity. As of September 30, 2025, the insurance float was approximately $176 billion, providing massive capital for investments.

2. BNSF Railway: Burlington Northern Santa Fe operates as the largest freight railroad network in the United States, transporting consumer goods, coal, and industrial products across North America.

3. Berkshire Hathaway Energy: A major utility holding company with extensive reach across the country, managing power generation and distribution infrastructure.

4. Manufacturing and Retail: The conglomerate owns numerous wholly owned subsidiaries ranging from See's Candies to Brooks Running, each operating with considerable autonomy.

The Stock Portfolio

• Beyond its operating businesses, Berkshire maintains a massive equity portfolio. As of September 30, 2025, the top 5 holdings are Apple Inc. (22.69%), American Express Co. (18.84%), Bank of America Corp. (10.96%), Coca-Cola Co. (9.92%), and Chevron Corp. (7.09%).

Warren Buffett: The Oracle of Omaha's Legacy

Warren Buffett's investment philosophy shaped not just Berkshire Hathaway but modern value investing itself. His approach emphasized:

• Long-term value investing: Buying quality businesses at reasonable prices and holding them indefinitely

• Circle of competence: Investing only in businesses you thoroughly understand

• Management quality: Partnering with excellent management teams

• Economic moats: Favoring companies with sustainable competitive advantages

• Patient capital allocation: Waiting for compelling opportunities rather than forcing investments

From 1965 to 2024, Berkshire Hathaway has only underperformed the S&P 500 for a full year 20 times, yet Berkshire Hathaway's total gains from 1965 to 2024 were over 5,500,000% compared to the S&P 500's 39,000%.

Greg Abel Takes the Helm: New Leadership for 2026

Who is Greg Abel?

• Greg Abel, 63, took over as CEO after Buffett, 95, spent six decades transforming a struggling textile manufacturer into one of the world's most successful companies. Abel started his career collecting, cleaning, and redeeming empty soda bottles for just 5 cents a piece, building entrepreneurial instincts from a young age.

Abel's Professional Journey

• Abel began his career as a chartered accountant with PricewaterhouseCoopers in their San Francisco office. In 1992, he joined CalEnergy, a geothermal electricity producer. Abel became CEO of MidAmerican in 2008, and the company was renamed Berkshire Hathaway Energy in 2014. In January 2018, Abel was named Berkshire Hathaway's vice chairman for non-insurance operations and appointed to Berkshire's board of directors.

Buffett's Endorsement

• Buffett promised Abel will be "the decider" and will be able to get more done in a week than he himself can accomplish in a month. He praised Abel for not being a "distorted individual," saying he "lives what would look like a normal life" even though he will run a company with 400 thousand employees.

• In a recent CNBC interview, Buffett told CNBC he'd rather have new Berkshire CEO Greg Abel handle his money "than any of the top investment advisers or any of the top CEOs" in the U.S.

Financial Performance and Current Position

Record Cash Position

• When Greg Abel takes over as Berkshire Hathaway CEO in 2026, he will have a $377 billion war chest at his disposal. At the end of the third quarter, Berkshire Hathaway had over $72 billion in cash and cash equivalents and over $305 billion in U.S. Treasury bills.

Recent Earnings Performance

• According to the latest financial reports, Berkshire continues demonstrating operational strength across its diverse businesses. The company reported strong operating earnings in Q3 2025, though investment gains fluctuated due to market volatility.

Stock Performance in 2025

• The conglomerate ended 2025 with a gain of 10.9%, notching its 10th straight year of positive returns. However, this performance lagged the S&P 500, which many analysts attribute to a "succession discount" as markets processed the leadership transition.

Investment Strategy Under New Leadership

What Will Change?

While Abel is expected to maintain Berkshire's core principles, some differences may emerge:

• Operational Focus: Abel is viewed as more hands-on than Buffett, potentially bringing operational improvements across subsidiaries.

• Capital Allocation: Buffett may still be chairman, but Berkshire's next big deal (or big buyback) will likely have Greg Abel's fingerprints on it.

• Dividend Question: He will also eventually face more pressure to start paying a dividend, though this remains speculative.

What Will Stay the Same?

• Experts say he's not expected to initiate any major shake-ups at the decades-old company. He's exhibited a commitment to Berkshire's decentralized structure, which gives acquired companies a large degree of autonomy to run their operations.

Recent Strategic Moves and Acquisitions

OxyChem Acquisition

• On October 2, 2025, Berkshire Hathaway Inc. announced plans to acquire OxyChem, Occidental Petroleum's petrochemical unit, in a deal valued around $10 billion. This acquisition demonstrates continued strategic expansion in the energy sector.

Portfolio Adjustments

• Throughout 2025, Berkshire continued its pattern of being a net seller of equities. Notable moves included trimming positions in Apple and Bank of America while adding to holdings in companies like SiriusXM and Constellation Brands.

Leadership Appointments

• In December 2025, Berkshire Hathaway announced leadership appointments, including Todd Combs departing to join JPMorgan, signaling organizational changes alongside the CEO transition.

How to Invest in Berkshire Hathaway

Understanding the Two Share Classes

• Class A Shares (BRK.A): Trading at approximately $700,000+ per share, these carry full voting rights and have never been split. They represent the original shares from Buffett's era.

• Class B Shares (BRK.B): Created in 1996, these trade at a fraction of Class A prices (1/1500th the value) and offer greater accessibility for individual investors. They carry reduced voting rights but provide identical economic exposure.

Investment Considerations

Pros:

• Diversified exposure to multiple industries and asset classes

• Strong management team with proven track record

• Massive cash reserves providing flexibility

• No dividend means tax-efficient compounding

• Decentralized structure empowers subsidiary leaders

Cons:

• Size creates challenges finding needle-moving acquisitions

• Recent underperformance versus S&P 500

• Leadership transition uncertainty

• Valuation complexity across diverse holdings

• No quarterly earnings calls or forward guidance

The Future of Berkshire Hathaway: Key Questions

How Will Abel Deploy the Cash?

With over $380 billion in cash and equivalents, capital allocation represents Abel's most important early test. Investors will watch for:

• Major acquisitions in familiar sectors

• Share buyback programs

• New investment positions

• Potential dividend initiation

Can Berkshire Maintain Its Culture?

• Berkshire's unique corporate culture emphasizes trust, autonomy, and long-term thinking. Maintaining what Charlie Munger called a "seamless web of deserved trust" will be critical for Abel's success.

What About Investment Management?

• Following Todd Combs' departure to JPMorgan, questions arise about Berkshire's investment team structure. Ted Weschler remains, but the future structure of investment management responsibilities remains unclear.

Berkshire Hathaway vs. Other Investment Options

Compared to Index Funds

• Berkshire offers concentrated exposure to specific value-oriented investments versus broad market diversification. While index funds provide passive market returns, Berkshire aims to outperform through active management and business ownership.

Compared to Other Conglomerates

• Unlike diversified companies like General Electric or 3M, Berkshire maintains decentralized management, allowing subsidiaries significant operational independence. This structure differentiates it from traditional corporate conglomerates.

As a Core Portfolio Holding

• Many value investors view Berkshire as a core holding, providing diversified exposure to quality businesses with patient capital allocation. The stock has historically served as a defensive position during market volatility.

As Warren Buffett passes the CEO baton to Greg Abel, Berkshire Hathaway enters uncharted territory. The company's success over the next decade will depend on Abel's capital allocation decisions, his ability to maintain corporate culture, and how effectively he deploys the record cash position.

For investors, Berkshire represents both opportunity and uncertainty. The fundamentals remain strong: diversified businesses generating consistent cash flow, a fortress balance sheet, and experienced management. Yet the "succession discount" in recent stock performance reflects legitimate questions about replicating Buffett's extraordinary track record.

Despite underperforming 20 times since 1965, there is one key stat that matters most: Berkshire Hathaway's total gains from 1965 to 2024 were over 5,500,000% compared to the S&P 500's 39,000%. That's an annual average of 19.9% compared to 10.4%.

The company's stability, breadth of operations, and patient approach to value creation suggest Berkshire Hathaway will remain a cornerstone holding for value-focused investors. As Greg Abel himself remarked when taking the helm, the focus will be on preserving what made Berkshire great while adapting to new market realities.

Whether you're a long-term shareholder or considering your first position, understanding Berkshire's unique structure, investment approach, and transition dynamics is essential for making informed decisions in this new era of leadership.

Questions About Berkshire Hathaway

Q: What makes Berkshire Hathaway unique?

• Berkshire combines operating businesses with a stock portfolio, an insurance float for investment capital, and a decentralized management structure that empowers subsidiary leaders.

Q: Why doesn't Berkshire pay dividends?

• The company has historically reinvested earnings for superior returns rather than distributing cash. This tax-efficient approach has compounded value for long-term shareholders.

Q: Is Berkshire Hathaway a good investment in 2026?

• This depends on your investment goals and time horizon. The company offers quality businesses, a strong balance sheet, and experienced management but faces challenges from size and leadership transition.

Q: How does Berkshire Hathaway make money?

• Revenue comes from insurance premiums, railroad operations, utility services, manufacturing sales, retail operations, and investment income from its stock portfolio.

Q: Will Greg Abel change Berkshire's strategy?

• While maintaining core principles, Abel may bring operational improvements and different capital allocation priorities. Major strategic shifts seem unlikely given his stated commitment to Berkshire's culture.

Q: Should I buy Class A or Class B shares?

• For most individual investors, Class B shares offer practical accessibility. Class A shares suit institutional investors or those wanting full voting rights.

Q: What is insurance float, and why does it matter?

• Float represents premiums collected before claims are paid. Berkshire invests this capital, generating returns while maintaining reserves for future claims.

Q: How much of Apple does Berkshire own?

• Apple represents Berkshire's largest stock holding at approximately 22.69% of the equity portfolio as of Q3 2025.

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