Buffett loses his heir. What next for Berkshire??

December 9, 2025

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Buffett's Successor Leaves for JP Morgan

We all know about Warren Buffett and how he’s a legendary stock picker.  (Many books have been written about this, if you were not aware somehow.)  We also know that Warren is retiring next month.  

But we weren’t concerned, because long ago Warren picked an heir to the throne.  Unfortunately, yesterday, the prince gave up his crown.  Todd Combs, who joined Buffett in 2010 to help manage the portfolio, left Berkshire yesterday to take a job at JP Morgan.  

We can debate “why”.  But the timing is interesting to say the least.  Warren, at 95 years young, will officially step down as CEO next month.  Longtime executive Greg Abel will become new CEO.  Insurance genius Ajit Jain will still run the insurance businesses.   But now the question:  who’s gonna manage the stocks??  

Let’s back up.  Why do we care?  Berkshire is the 9th largest stock in the market.  So it’s important to track.  Berkshire Hathaway (BRK/B or BRK/A) consists of three big parts:  

(1) insurance,

(2) industrial/retail, and

(3) the stock portfolio.  

The stock portfolio is worth about $270 billion at the moment.  That’s roughly 25% of the market value of the entire company.  And just as important, Berkshire has almost $400 billion in cash and T-bills on hand.  They could write a check to buy all of IBM tomorrow and still have $100bn in cash left over.  This capital needs to be allocated.  Warren is well aware that’s a drag on his firmwide return by having so much capital earning just 3-4% interest. So needless to say, the custodian of this portfolio is a very important decision.

The prevailing theory (in my little circle, at least) is that new CEO Greg Abel wants to chose his own “capital allocator” to sling stocks in Omaha.  

Or a more game-changing theory: Greg wants to leave the "stock picking" game altogether. This would focus the future stock performance of Berkshire on the core "owned" businesses -- rather than relying on Warren's stock picking prowess.

Just for fun, I’ve copied below Berkshire’s current portfolio.  You can see how it did versus the S&P 500 over the past 1, 3, 5, and 10 years.  Disclaimer: this is not a perfect representation of Berkshire’s portfolio, because they have been buying/selling different stocks along the way.  But this at least gives you a sense of how their current portfolio has done.