Berkshire’s New Broom: A Mildly Perplexing Shift

by

Old Man Buffett, you see, didn’t much care for buying back shares of Berkshire Hathaway. Not in his last few turns of the wheel as CEO, anyway. Considered it a bit like polishing the boots of a dragon you weren’t planning to ride. Greg Abel, the new steward, promptly changed that. A reversal of policy so complete, it’s almost… polite.1

The truly baffling bit? Berkshire’s share price is higher now than it was when Buffett was stubbornly refusing to participate in the usual market rituals. A conundrum, wouldn’t you say? A perfectly good reason to suspect something… different is afoot.

The Intricacies of Imaginary Value

Now, most companies require a full council meeting, a divination with tea leaves, and a sacrifice of perfectly good stationery to authorize a stock buyback. Berkshire, however, is… different. The CEO can simply decide, if he believes the price has fallen below what he calls “intrinsic value.” A term, incidentally, that’s about as solid as a dream woven from spider silk.2

Buffett, in his infinite wisdom (and let’s be honest, a healthy dose of stubbornness), didn’t think Berkshire’s price had reached that magical low point. Abel, however, does. But why now, when the price is doing a perfectly respectable jig above where it was during Buffett’s twilight years? Because “intrinsic value,” my friends, is a story we tell ourselves to justify the numbers on a screen.

It’s like valuing a goblin’s hoard. It’s not just the gold, you see. It’s the potential for mischief, the sheer audacity of collecting such a pile of shiny things. External factors, naturally. A surge in dragon sightings, for instance, tends to drive up the price of dragon-resistant armor, and therefore, the perceived value of any company making it. Abel, I suspect, has simply decided the prevailing conditions are… more goblin-friendly.

His comments about BNSF improving operating margins are telling, of course. Confidence is a powerful spell, and a little optimism can go a long way in convincing the market that a slightly overpriced train set is actually a gateway to the future.

Skin in the Game (and a Surprisingly Large Purse)

It’s heartening, in a cynical sort of way, to see Abel putting his own coin where his mouth is. He purchased a rather impressive 21 Class A shares – roughly equivalent to the annual income of a small kingdom – in the first quarter of 2026. That brings his total holdings to a sum that could comfortably fund a moderately ambitious quest.

Loading widget...

And he intends to continue this practice, investing his after-tax salary as long as he remains at the helm. A long-term commitment, to be sure. One can only assume he’s planning to build a really, really big tower.

It’s a reassuring gesture, naturally. Seeing the captain share the risks with the crew tends to prevent mutiny. Although, in the world of high finance, mutiny often takes the form of a hostile takeover.

Buffett’s Playbook, With a Slightly Different Ink

So, did Abel abandon Buffett’s playbook? Not entirely. The key is that Buffett approved of it. He gave his blessing to the repurchase program, after a quiet word, of course. Old Man Buffett still holds the title of Chairman, and, according to Abel, spends most days in the office, presumably dispensing wisdom and judging the quality of the tea.3

Charlie Munger, that venerable sage, once declared that Greg would “keep the culture” intact. A rather ominous pronouncement, when you consider the culture at Berkshire is built on a foundation of value investing, frugality, and a healthy suspicion of anything remotely resembling fun. But Abel seems to have taken it to heart. He’s playing the same tune, just with a slightly different instrument.

It’s a subtle shift, a gentle nudge in a new direction. And in the grand scheme of things, perhaps that’s all it is. A new broom sweeping the same old floor. But in a world obsessed with disruption, sometimes the most radical act is simply… continuity.

1

It’s a well-known truth that polite reversals of policy are far more unsettling than outright rebellions. They suggest a level of calculation that borders on the sinister.

2

Intrinsic value is often confused with ‘what someone is willing to pay for it,’ a concept that has baffled economists for centuries.

3

One imagines Buffett spends much of his time silently judging the interior decorating choices.

Read More

2026-03-17 10:52