For the first time in over fifty years, Berkshire Hathaway is navigating a leadership transition that marks the beginning of a new chapter. With Warren Buffett officially stepping down as CEO at the end of last year, the responsibility for managing the massive 359 billion dollar investment portfolio has fallen to Greg Abel. While Abel spent his first quarter making various adjustments to the holdings, he has remained steadfast in a philosophy long championed by his predecessor: the power of extreme portfolio concentration. Rather than diversifying across hundreds of small bets, Abel continues to lean heavily into a few high conviction winners.
At the heart of this strategy are two dominant pillars, Apple and American Express, which together make up more than 35 percent of Berkshire’s invested assets. Despite Buffett trimming a significant portion of his Apple stake prior to retirement due to rising valuations, Abel sees a different future for the tech giant. In his first letter to shareholders, he described Apple as a business capable of compounding wealth over many decades. He appears particularly bullish on Apple’s pivot toward high margin subscription services and its recent push into artificial intelligence, viewing these moves as catalysts for sustained growth.
Equally vital to the current strategy is American Express, a cornerstone of the portfolio since 1991. For Abel and Berkshire, the appeal of Amex lies in its unique dual revenue stream from both merchants and cardholders, combined with an affluent customer base that typically weathers economic storms better than average consumers. Perhaps most impressive is the sheer efficiency of the original investment; because Berkshire bought in so early, the dividends alone now provide a staggering yield on cost that effectively doubles their initial investment every couple of years. By sticking with these titans, Abel is proving that while the leadership has changed, the appetite for big, bold wins remains exactly the same.