The quarterly ritual of Form 13F filings – a rather vulgar display of wealth, if one considers it – arrives with predictable punctuality. Wall Street, ever the stage for grand illusions, awaits these pronouncements with the breathless anticipation usually reserved for a particularly scandalous divorce. And now, the mantle has passed. Berkshire Hathaway, for decades a beacon of – shall we say – sensible investment, is no longer guided by the hand of Mr. Buffett, but by Mr. Abel. A change of stewardship, naturally, demands a closer inspection of the spoils.
One observes that the portfolio, a considerable assemblage of capital amounting to some $318 billion, is not merely large, but remarkably concentrated. A vulgar man might call it a lack of diversification; a discerning eye recognizes it as a deliberate assertion of conviction. Nearly 61% of these funds reside within a mere five equities, a testament to the enduring power of – and, dare I say, the stubbornness of – focused investment. Let us examine these chosen few, these pillars of the Abel inheritance.
- Apple (AAPL 0.48%): 19.5% of invested assets
- American Express (AXP +2.52%): 15.3% of invested assets
- Coca-Cola (KO 0.04%): 10.1% of invested assets
- Bank of America (BAC +1.12%): 8.2% of invested assets
- Chevron (CVX 0.03%): 7.6% of invested assets
The Illusion of Permanence
Mr. Buffett, in a moment of uncharacteristic sentimentality, designated eight companies as “indefinite” holdings. Coca-Cola and American Express, predictably, were among them. To hold a stock for decades is, of course, a curious habit. It suggests either exceptional foresight or an exquisite inability to admit error. These two, having graced the Berkshire portfolio since 1988 and 1991 respectively, have become less investments and more… companions. One suspects Mr. Abel will find it difficult to sever such long-standing relationships, even if logic dictates it.
The yield on cost, a vulgar metric, is nonetheless compelling. Berkshire enjoys returns of 63% on Coca-Cola and 39% on American Express, relative to their original purchase price. To sell such cash cows would be… uncivilized. It is a truth universally acknowledged that a man in possession of a good yield must be in want of no further investment.
The Price of Popularity
Mr. Abel, while undoubtedly competent, will inevitably bring his own inclinations to the table. However, a shared appreciation for value remains. While Mr. Buffett’s investments in Apple and Bank of America proved astute, the bargain is no longer there. Apple, despite its loyal clientele and prodigious share buybacks (over $841 billion since 2013 – a truly staggering sum), has become rather… popular. Its price-to-earnings ratio has tripled since 2016, suggesting that the market has discovered its charms. Years of lackluster physical device sales further suggest a premium valuation, bordering on the extravagant.
Bank of America, too, has lost its luster. In 2011, Mr. Buffett acquired preferred stock at a considerable discount. Now, it trades at a 31% premium to book value. A most unseemly state of affairs. One suspects Mr. Abel will quietly begin to prune these overgrown branches.
The Pragmatism of Petroleum
Chevron, however, may prove to be a more enduring companion. Mr. Abel’s tenure at MidAmerican Energy has undoubtedly instilled in him an appreciation for the intricacies of the energy sector. Chevron’s integrated model – encompassing drilling, pipelines, chemical plants, and refineries – provides a degree of insulation against the vagaries of crude oil prices. A most sensible arrangement, and one that aligns perfectly with the principles of prudent investing.
While change is inevitable – and, indeed, rather tiresome – the fundamental tenets of Berkshire Hathaway will undoubtedly endure. The pursuit of value, the aversion to complexity, and the unwavering commitment to long-term thinking. These are not merely investment strategies; they are a philosophy. And a rather elegant one, at that.
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2026-02-27 13:13