New CEO Greg Abel’s approach might be frustrating onlookers. But, as a shareholder, it was exactly what I wanted to hear. 

Cash is… trash?

Berkshire’s cash reached around $380.2bn. And I sense that’s testing the patience of some investors. The S&P 500‘s up 27.96% in the last 12 months but Buffett’s firm has earned nothing like this on its excess cash reserves.

At the Annual Shareholder Meeting, Abel echoed the company’s recent view: it just doesn’t see opportunities right now.

Investors increasingly seem to be arguing for the firm to use its cash or return it to shareholders. But that isn’t what I want to hear. I don’t think Berkshire Hathaway’s a stock for most investors. But I also don’t see that as a bad thing. 

Average returns

JP Morgan used to publish a chart of an average investor’s 10-year returns. And they were a lot lower than you might think.

Source: JP Morgan Guide to the Markets Q4 2022

The average investor handily underperforms the S&P 500 over time. The biggest reason for this is psychological. Put simply, most investors just don’t have the patience to wait for opportunities. Instead, they chase quick returns. 

The result is poorly-judged moves that ultimately lead to underperformance. But Berkshire Hathaway is (I hope) built differently. The average investor might want to see Berkshire make a big move. But given their returns, why would I want Abel to listen? 

AI conundrum

The stock market theme of the last 12 months has been artificial intelligence (AI). And Berkshire Hathaway’s stayed well away.

There’s a good reason for this. In the 1994 shareholder letter, Buffett said:

“Just because Charlie and I can clearly see dramatic growth ahead for an industry does not mean we can judge what its profit margins and returns on capital will be as a host of competitors battle for supremacy.”

Even if AI’s here to stay, it’s not necessarily an opportunity. There’s still a question of who makes money from it.  The big winner might be a company that doesn’t exist yet. Or, more worryingly, it might not be any companies at all.

Flight of fantasy

Buffett often cites the airline industry as a case study. It’s a technology that changed the world, but was a disaster for investors. This is because high fixed costs and value-focused customers forced down prices. And that’s true across the industry.

The big question is whether AI will be the same. And Berkshire’s view is that it isn’t in a position to rule this out. If they’re honest with themselves, I don’t think many investors are. But they’re willing to bet on the new technology anyway.

That’s the kind of strategy that leads to low returns. And I’m pleased to see that isn’t a road Berkshire’s going down.

Berkshire and AI

The rise of AI isn’t lost on Buffett’s firm. It increases the threat of a cybersecurity attack, which is a major risk.

Overall though, it’s largely ‘business as usual’ for Berkshire Hathaway. And I see that as a very good thing. Abel reiterated that Berkshire’s cash is an opportunity, but impatient investors will need to look elsewhere.

The post Should I keep buying Berkshire Hathaway shares in the post-Warren Buffett era? appeared first on The Twelfth Magpie.

I think it is. But in terms of diversification, not every stock is the same.

Why diversify?

Investing always comes with risk. Even the best in the business can’t always see everything that’s going to happen in the future. The most effective way to protect against this is by building a diversified portfolio. That limits the impact of any individual threat.

There is, however, an obvious downside to this. Having more investments increases the number of risk factors a portfolio is exposed to. For example, adding some bank stocks to a tech-focused portfolio limits the impact of rising interest rates. But it makes a recession a bigger threat.

So how do investors know whether diversification is making things better or worse? I think there’s an important rule they can use.  

Warren Buffett

One of Warren Buffett’s principles is that risk doesn’t come from volatility. It’s the result of not knowing what you’re doing. 

I think this is right. Nobody – including Buffett – knows everything that’s going to happen, so some risk is inevitable. Diversification limits the impact of these things we can’t foresee. But if it creates more than it replaces, that’s not really helpful.

That means investors shouldn’t buy things they don’t understand just for diversification. I think that’s counterproductive.

Investors can, however, have a clear sense of what they don’t know. And some stocks offer better protection than others.

Ready-made diversification

Buffett’s own Berkshire Hathaway (NYSE:BRK.B) is a good example. It has subsidiaries in insurance, energy, retail, and more.

The firm’s stock portfolio is relatively concentrated, with a handful of major holdings. But firm is much more than these investments. 

This doesn’t entirely eliminate risks. A major natural disaster or cyber incident could end up costing the company a lot. That’s inevitable in the insurance industry. But the aim in both insurance and investing is to manage risk, not eliminate it.

Berkshire does this with a strong balance sheet and a disciplined approach to underwriting. And I expect this to continue now that he’s retired.

Outlook

Berkshire Hathaway offers a lot in terms of diversification for my portfolio from one stock. But that’s not the only reason I own it. 

The firm’s financial position gives all of its subsidiaries a big advantage. The rail and energy divisions are good examples. In both cases, their competitors have high debt levels. By itself, this isn’t a huge issue given the predictable nature of the businesses.

Berkshire’s operations, however, don’t have to think about this at all. Their managers also don’t have to deal with quarterly investor calls.

That’s what I see as the company’s key strength. And I think it’s going to be a durable and important one.  

How many investments?

There’s no magic number of investments investors need in a portfolio. A better way to think about it is in terms of specific risks. 

The point of diversification is to limit the impact of anything that can go wrong. And that includes things that are impossible to foresee.

In my Stocks and Shares ISA, Berkshire Hathaway covers a range of industries. With that and some other similar businesses, I’m happy with 16 stocks.

The post How many investments do you need in your Stocks and Shares ISA? appeared first on The Twelfth Magpie.

To put that into perspective, investing just £1,000 at the start of this journey would now be worth £60,993,940 today. By comparison, the same investment into an S&P 500 index tracker would have only mustered £161,610 – 377 times less!

But what about in just the last five years?

Did Buffett beat the market?

In the last five years of Buffett’s tenure as Berkshire’s CEO, he continued to deliver impressive returns. In fact, even when the S&P 500 tumbled into a steep correction during 2022, Buffett remained in the black, achieving a positive, albeit small gain.

So how much money could investors have made with a simple £1,000 investment with Buffett’s returns?

At a 117.2% return, that means a £1,000 investment at the start of 2021 is now worth £2,172.31 using Buffett’s method versus the £1,961.96 earned by passive index investors.

But with the ‘Oracle of Omaha’ now semi-retired (he’s still company chairman) and capital deployment being led by his successor, Greg Abel, is Berkshire Hathaway still worth considering?

To buy, or not to buy

Despite being hand-picked by Buffett, some institutional investors remain on the fence about Abel’s appointment. This isn’t due to a perceived lack of skill, but rather an unproven ability to manage a massive one-trillion-dollar enterprise.

As a result, Berkshire Hathaway shares have been steadily losing their ‘Buffett Premium’ with the stock actually falling slightly behind the S&P 500 in 2026, so far. However, as a result, Berkshire shares are now trading at a genuinely compelling valuation if Abel can continue to steer the ship as Buffett did.

At a price-to-earnings ratio of just 15.5, the stock offers an undemanding entry point to a diversified investment portfolio that appears to be a bit of a safe haven in the increasingly uncertain geopolitical landscape.

After all, Berkshire’s portfolio consists of a largely US domestic earnings base covering the rail, utilities, insurance, energy, and consumer staples sectors, providing a lot of insulation against global trade disruptions. And with Abel restarting Berkshire’s buyback programme, he appears keen to start deploying the group’s enormous cash pile.

So where does that leave investors?

What’s the verdict?

Seeing Berkshire shares lag the market across the first few months of 2026 isn’t that alarming. Short-term performance is ultimately meaningless for long-term investors. And there have been plenty of periods where even Buffett fell behind his benchmark.

Yet if this evolves into a prolonged downturn due to Abel’s inability to fill Buffett’s shoes, then there’s valid cause for concern. Personally, the moves made by Abel so far appear prudent, continuing Buffett’s disciplined investing style while also seeking undervalued opportunities outside the US market – most notably Japan.

With that in mind, I think now might be a good time to mull buying Berkshire shares given the firm’s promising trajectory at a discounted price. But it’s not the only opportunity I’ve got my eye on right now.

The post £1,000 invested in Warren Buffett’s portfolio 5 years ago is now worth… appeared first on The Twelfth Magpie.

The firm also has insurance businesses, a railroad, an energy unit, and a lot of cash. And this makes it a highly diversified operation.

Diversification

Berkshire’s stock portfolio is worth $274bn. And 43% of this is Apple ($62bn) and American Express ($56bn).

Ordinarily, a lack of diversification makes for a risky business. But that’s not really the case in this situation. 

That’s because Berkshire has a lot of other assets besides its stock portfolio. These include:

• A collection of insurance operations
• A Class 1 US railroad
• An energy subsidiary
• $390bn in cash (and cash equivalents)

These are all private businesses, except for the cash. But there’s a strong case for thinking that each of them might currently be worth a lot more than $62bn.

Investors therefore shouldn’t think that an investment in Berkshire Hathaway is an outsize bet on Apple. It isn’t.

Apple sales

Buffett actually made exactly this point at the 2023 Annual Shareholder Meeting. Back then, Apple was around 40% of the stock portfolio. In response to a question about concentration, Buffett pointed out that this didn’t make it 40% of Berkshire Hathaway. And this is right.

Since then, the company has significantly reduced its stake in Apple. It’s gone from owning 915m shares to 228m. 

Share buybacks at Apple mean Berkshire’s stake has been reduced by less than it might seem. But it owns less of the iPhone company than it used to.

Investors have been trying to figure out what to make of this. In my view, though, there are more important things to focus on.

Working together

Berkshire’s private businesses create diversification for the firm. And its real strength is the way these work together. The rail and energy units create opportunities to earn high returns on insurance premiums. This is something other insurers can’t match.

Equally, the profits produced by the other subsidiaries can be used to settle insurance claims. And that allows the firm to write larger policies.

The strong balance sheet also keeps borrowing costs down across the organisation. And that’s a huge advantage for capital-intensive operations.

Berkshire’s value isn’t just its collection of assets – which are more diversified than they look. It’s the way these combine to create unique strengths.

What are the risks?

I don’t think concentration is a major issue with Berkshire. And it’s hard to find an existential threat for a company with $390bn in cash. Nonetheless, there are some risks.

The most obvious are to do with the firm’s insurance businesses. This is where the biggest potential liabilities are. The company writes some big policies and a natural disaster could lead to large losses.

There’s also a threat of changes in regulation at its rail and energy businesses limiting future returns. And no amount of cash can eliminate that.

These are worth keeping in mind. But risk-free businesses simply don’t exist and I think Berkshire is one of the safest around.

One-of-a-kind

I don’t think there’s another firm like Berkshire Hathaway in the world. And that’s not because others haven’t tried to copy it.

Building an organisation like the one Buffett put together is extremely difficult. Buying shares in it, however, is not – and that’s what I’m doing.

The post Warren Buffett’s firm has 43% of its stock portfolio in 2 names. But… appeared first on The Twelfth Magpie.

It’s not just the usual speculation about stocks trading at cheap prices. There’s a much deeper reason why a deal could be in the pipeline. 

Utilities

The company is National Grid (LSE:NG). And to see why this makes sense, we need to take a closer look at Berkshire’s utilities division.

One of its existing subsidiaries – PacifiCorp – is facing big legal risks. These are related to the California wildfires from 2020 and 2022. The business has already paid $575m to settle claims. But the number being speculated as a potential total is closer to $50bn. 

As a result, its credit rating has been downgraded. And that means higher costs and collateral requirements for borrowing.

Berkshire’s balance sheet means bankruptcy is out of the question. But Buffett has said the firm won’t finance legal risks indefinitely.  PacifiCorp has sold assets to raise cash, but the legal risk remains. And that’s where National Grid – potentially – enters the picture.

National Grid

In California and Oregon, liability comes down to PacifiCorp’s equipment causing the fires. Importantly, it doesn’t have to be found negligent. Greg Abel – Berkshire’s new CEO – sees this as contrary to the social contract between states and utilities. But the situation in the UK is different. 

In Britain, a claimant has to prove actual negligence in order to win a payout. And the chances of a forest fire are much lower in the first place.

On top of this, National Grid has recently accepted the RIIO-3 framework. That increases its allowed return to 6% (in real terms) until 2031. That means there’s a lot more regulatory certainty here than in the US. And this is what makes utilities attractive investments in the first place.

This is why some analysts have identified National Grid as a potential Berkshire acquisition. But the case doesn’t stop there.

Returns

Becoming part of Berkshire Hathaway could bring some changes at National Grid. And there’s a lot of scope for higher returns.

One is the dividend. National Grid shares currently come with a 3.8% yield. As part of Buffett’s company, that wouldn’t be necessary. Instead, the business could reinvest all the cash it generates. And an attractive regulated return makes this a nice growth opportunity.

On top of this, Berkshire could use its cash to reduce National Grid’s significant debt. That would bring down costs, boosting returns further. In other words, there’s scope for the business to reinvest more of its capital at more attractive rates. And this makes it much more attractive.

This, however, only happens as part of a firm like Berkshire Hathaway. So it’s not a reason for ordinary investors to consider buying the stock.

Will it happen?

A number of analysts are connecting Berkshire Hathaway and National Grid. And there’s a lot of careful thought behind it. 

One of the major obstacles was the fact the FTSE 100 stock was up significantly in 2026. But it’s fallen 10% in the last month.

Another potential issue is the UK government’s ability to block the deal. That might scupper any deal and creates uncertainty.

Takeover talk can be good for shareholders of the company being acquired. But in this case, I’m buying shares in the one doing the acquiring.

The post Is Warren Buffett’s firm about to buy this FTSE 100 company? appeared first on The Twelfth Magpie.

In previous years, my plan’s been simple. But some things have changed over the last 12 months, so should I take a different approach in the year ahead?

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Strategy

Until this year, my strategy has been to limit my Stocks and Shares ISA deposits to £16,000. The remaining £4,000 has been invested in my Lifetime ISA where I own one stock.

The stock’s Berkshire Hathaway (NYSE:BRK.B). There are a few reasons I’ve chosen it as the starting point for my investing each year, one of which is its diverse range of subsidiaries.

This offers the kind of diversification that comes with an index fund, but with an advantage. Berkshire’s subsidiaries are very well resourced as a result of the firm’s balance sheet.

The company’s emphasis on long-term value and financial strength means I think it has a great chance of being around 50 years from now. And that’s the main thing I’m looking for.

Warren Buffett

As virtually everyone knows, billionaire investor Warren Buffett retired as Berkshire Hathaway CEO at the start of the year. And that’s why I’ve been thinking about whether to keep buying the stock this year. 

Running a company with £370bn in cash and cash equivalents isn’t an easy task. And new CEO Greg Abel made this point in his letter to investors while reporting a recent acquisition.

Berkshire recently acquired pest control business Bell Laboratories. The firm’s happy with the deal, but Abel said he wished it could have been 10 times bigger.

This highlights one of the biggest challenges for the firm. There are small opportunities, but can Berkshire find one big enough to make a meaningful impression on $370bn?

Outlook

One thing I think is going unnoticed is the prospect of Berkshire repurchasing Buffett’s shares. And Abel acknowledged the possibility of this in the letter. At today’s prices, Buffett’s stake is worth about $160bn. That’s not enough to account for the whole $370bn, but it could use a lot of it in a way that benefits current shareholders. 

Buying back Buffett’s shares would bring the share count by around 16%. That by itself would likely cause earnings per share to go significantly higher even without growth elsewhere.

On top of this, the firm does need major cash reserves for its insurance division. Having these helps turn the danger of a major liability from an existential threat to an unfortunate event.

What should I do?

Unless something major happens in the stock market before 5 April, I’ll be doing what I usually do in the new financial year. I’ll buy Berkshire shares and then figure out what else to do.

I think investors wondering why the company has so much cash might be about to get their answer soon. And I expect this to have a big impact on the business and the share price.

That means I’ll be looking to limit my Stocks and Shares ISA to £16,000 rather than £20,000. But there’s plenty investors can get done with those sums.

The post Here’s my Stocks and Shares ISA plan for 2026/27 appeared first on The Twelfth Magpie.

I’ve seen analysts ignore the issue, say it won’t happen because it would be bad, and try to compare it to entirely different situations in the past. Those are all bad strategies. So I’ve got a better one.

The AI apocalypse

The basic worry in the Citrini publication is a familiar one. It’s that AI might create a self-reinforcing cycle of job losses, weaker consumer spending, lower corporate profits, and so on.

What the piece really sets out is just how bad things could get. And in the worst-case scenario, there’s no way share prices in the S&P 500 are going to hold up at their current levels.

The stock market fell after the piece was published, but a lot of analysts were quick to dismiss it. The trouble is, a worrying number of them are unable to make any coherent case in support of their view.

One of them argued that the US economy can cope with AI job losses because it’s survived disruption before. And cited as evidence… the fact that lifts are now automatic and don’t have manual operators!?

I’m not honestly sure whether the point was meant to be serious, but I’m not sure it’s anything to joke about. And elevator operator spending was never 80% of the US economy.

Anyone thinking of investing in the stock market needs to think about what could go wrong in the next few years. But instead of hoping it won’t happen, why not make a plan for if it does?

Survival of the fittest

The companies with the best chances of surviving an AI apocalypse are the ones with strong balance sheets and big competitive advantages. And there’s one obvious name that comes to mind. 

Berkshire Hathaway (NYSE:BRK.B) isn’t insulated from AI. In fact, it increases one of the biggest risks for the firm – a major insurance liability coming from a cybersecurity attack.

The company however, isn’t ignoring this or pretending it won’t happen based on nothing but hope. It’s making sure it has the cash reserves that will put it in a position to adapt and survive.

Berkshire’s strong financial position also benefits the firm in other ways. It means its other subsidiaries – including its railroad and its utilities business – are in a stronger position than their rivals.

Investors often focus on the company’s stock investments. But the deals that interest me most are the ones that aren’t available to others, like buying a chemicals business from Occidental Petroleum.

That kind of opportunity is unique to Berkshire. And combining that with a strong case for thinking the firm has a better chance to survive an AI apocalypse makes a strong case to consider buying.

Being ready

Exactly what the implications of AI are going to be for the US economy will become clearer over time. But those who pin their hopes on blind optimism are playing a very dangerous game.

More importantly, there’s no need to. A much better strategy is to find companies that take potential risks seriously and make preparations to deal with them if and when they show up.

The post How to prepare for an S&P 500 crash appeared first on The Twelfth Magpie.

According to Martin Lewis, the LISA is being replaced with a product for first-time buyers only. That’s no use to me, so I’m figuring out what I should do.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

LISA strategy

As it stands, the LISA can be used for two purposes. One is buying a first home up to a value of £450,000 and the other is in retirement after the age of 60. 

The annual contribution limit is £4,000, which comes out of the wider £20,000 ISA limit. But the big advantage is that anything deposited gets a 25% bonus from the UK government.

A 25% head start gives me a pretty good chance of outperforming the wider stock market over the long term. That’s why it’s been my top priority in recent years.

Unlike a Self-Invested Personal Pension, withdrawals from an ISA aren’t taxed. But since I have to wait until I’m 60, I’ve been taking a distinctive approach to buying stocks in my LISA.

What I’ve been buying

While I’m looking to maintain a diversified portfolio, I’ve only bought one stock in my LISA. The stock is Berkshire Hathaway (NYSE:BRK.B) and there’s a reason why I’ve taken this approach.

Unlike my Stocks and Shares ISA, I incur costs whenever I make an investment in my LISA. Since this includes a flat fee per transaction, I try to pay it as infrequently as possible. 

The majority of my investing is done in my Stocks and Shares ISA, where I don’t pay transaction fees. And that gives me a bit more scope to be flexible.

While I’m always looking to invest for the long term, there’s an additional cost to making a change in my LISA. And that’s why I use it for my Berkshire Hathaway investment.

Long-term thinking

Of all my investments, I think Berkshire Hathaway is the one I’m least likely to want to sell before I reach 60 (in 2048). There are a few reasons for this. 

First of all, it’s the company that I think is most likely to be around 22 years from now. The cash on its balance sheet by itself should be enough to protect it against all but the worst disasters.

It also has a diversified collection of subsidiaries that operate in durable sectors. Rail, for example, is one of the rare industries where companies can issue 100-year bonds.

A major disaster could cause a big loss in its insurance business. But beyond that, the risk-averse nature of the way the firm is run makes me very optimistic about its long-term prospects.

What should I do?

Martin Lewis thinks the LISA is going to go in 2028. If that happens, I’ll focus on my Stocks and Shares ISA – but I still expect to be buying Berkshire Hathaway shares.

Unless something changes dramatically, the firm’s long-term prospects mean I’ll still want it to be part of my portfolio. And that will be true in whatever wrapper I end up using for my investments.

The post The ISA system is changing — here’s what I’m doing appeared first on The Twelfth Magpie.

Investors though, need to think about the question of what will happen to the company on the sad day Buffett is gone from it entirely. And there’s an important risk to consider.

Buffett’s shares

The issue for Berkshire shareholders has two parts to it. One is that Buffett has been an extremely good leader for the company and will be an extremely tough act to follow. 

On this front, I think there’s reason to be optimistic about Greg Abel. The new CEO has wasted no time in getting to work by making a move to sell off the firm’s stake in Kraft Heinz. 

More generally, Abel has a reputation for being much more involved with Berkshire’s subsidiaries than Buffett was. And this might be what the company benefits from most going forward. 

Berkshire’s size means acquisition opportunities that can make a difference to its profits are hard to come by. So a CEO focused on improving the existing operations could be what’s needed.

Buffett’s shares

The other issue for Berkshire shareholders is what happens to Buffett’s shares in the company. These are set to be distributed to various philanthropic organisations, but what comes next?

Those organisations are likely to sell the stock, either because they want to or because they have to. And this raises the possibility that they might fall into the hands of activist investors. 

New shareholders could push for changes that might cause the share price to jump in the short term, but aren’t in the firm’s long-term interests. And that’s the risk. 

Buffett owns around 15% of Berkshire’s economic interest, but the nature of the Class A shares makes this over 30% of the voting power. So someone buying these could have a very big say.

Berkshire’s defences

Buffett’s stake is worth around $150bn, so it would take a lot for any individual or organisation to buy the shares. But it isn’t entirely out of the question and it’s a risk I’ve been thinking about.

Over the last few years, Berkshire Hathaway has – very conspicuously – grown its cash reserves to $382bn. That’s more than enough to buy Buffett’s shares when the time comes.

In other words, Berkshire might stop a potential activist by buying Buffett’s stake before anyone else can. And the company has done something similar before, back in 2012. 

This would also benefit investors by reducing the number of shares outstanding. While the firm needs cash to cover potential insurance liabilities, $200bn should be more than enough for this.

Berkshire without Buffett

Investors have been wondering why Berkshire Hathaway has been accumulating huge capital reserves. Buffett has said for some time that it isn’t because he’s expecting a stock market crash.

One potential reason, though, is that it puts the company in a strong position to deal with what happens when Buffett’s shares are sold. And this isn’t just about fending off a potential risk.

Buying back around 15% of the firm’s equity should benefit existing shareholders in a major way. That’s why I hold the stock and why I’m still a buyer at today’s prices.

The post Why I’m still betting on Berkshire Hathaway – even after Warren Buffett appeared first on The Twelfth Magpie.

As we start 2026, here are some of his thoughts.

1. Be patient. Don’t chase enthusiasm

With the ‘Buffett Indicator’ reaching a staggering 230% versus its post-2000 average of 110%-130%, the US stock market’s among one of the most richly valued in the world right now. And as a result, the billionaire has suggested investors become far more disciplined and selective with their choices.

“Because of market levels, ideas are few – but not zero.”

Clearly, Buffett believes valuations are stretched. And with a track record of holding out for more attractive prices, it isn’t surprising to see him take a more cautious stance in the current market environment. In fact, looking at Berkshire’s balance sheet, Buffett and his team have accumulated over $380bn of cash & equivalents.

Yet, as he highlighted, there are still opportunities to be had. And throughout 2025, even though Berkshire was a net seller of US stocks, the company was still deploying capital in niche opportunities.

This included health insurance (UnitedHealth), residential housing (Lennar and D.R Horton), American steel (Nucor) and, quite unusually, AI cloud computing (Alphabet). And these aren’t the only investments Berkshire’s recently been making.

2. Volatility’s part of the journey

Even as a value investor, Buffett’s encountered and endured multiple periods of widespread market volatility. In fact, over the last 60 years, Berkshire Hathaway’s share price has collapsed more than 50% on three separate occasions. And Buffett’s warned this will eventually happen again.

“Our stock price will move capriciously, occasionally falling 50% or so as has happened three times in 60 years under present management.”

However, he also reiterated that this is just a normal part of the investing journey:

“Don’t despair; America will come back and so will Berkshire shares.”

Some of Buffett’s biggest investing success stories are those made during times of crisis. A perfect example is Coca-Cola – one of Berkshire’s most profitable investments. Buffett started snapping up shares in 1988 shortly after the 1987 stock market crash, profiting from widespread volatility instead of panicking about it.

Is Berkshire still a good investment?

With the mantle of leadership being passed along to Greg Abel, Berkshire Hathaway’s transitioning into a post-Buffett era. But that doesn’t mean its shares are less attractive.

Abel has already demonstrated his strong understanding of capital discipline and long-term thinking throughout his journey of building Berkshire Hathaway Energy. And with a fortress balance sheet flooded with cash, he has plenty of financial flexibility to execute his vision.

Of course, steering Berkshire won’t be an easy task. The sheer size of the business makes future grow far more challenging. And since he’s not viewed as an icon in the same way Buffett is, investors and shareholders may hold him on a much shorter leash.

Nevertheless, much like Buffett’s timeless wisdom, I think Berkshire Hathaway shares are still worth considering in 2026, especially for investors who are unsure about how to navigate a complex market environment.

The post As Warren Buffett retires, here’s his final piece of advice to investors. appeared first on The Twelfth Magpie.