"With Warren Buffett releasing his last Thanksgiving letter to shareholders as CEO, many investors are likely feeling uncertain, maybe even a bit sad, as Berkshire Hathaway enters a new era. Undoubtedly, for big believers of the great Oracle of Omaha, it's probably best to stay confident in incoming CEO Greg Abel. After all, he's a man who's been trained by the Oracle himself for quite a while now. If you believe in Buffett, shareholders should also believe in Abel and Buffett's many stellar colleagues."
"In any case, as Buffett looks to "go quiet," there's no doubt that a new generation of self-guided investors stands to miss out on invaluable wisdom. Of course, there are older materials to go by, but, in any case, questions linger as to how Berkshire will fare in the post-Buffett era as it retains a record cash hoard (as well as U.S. Treasury Bills) and a supposed lack of deals attractive enough to warrant putting a big enough chunk of it to work."
"Of course, it will be interesting to see how Abel invests once he's the man in charge come January. In any case, I think standing (mostly) on the sidelines from the AI run-up could be a good thing for those investors who are worried about the downside risks come the next big AI correction, which, in my opinion, has a high chance of happening in the next three years."
"So, with that in mind, I think Berkshire shouldn't lose 100% of its Buffett premium (perhaps 75% of it could make more sense), especially if markets gravitate lower and some better pitches are thrown into what Buffett put as a "strike zone." In any case, I think Berkshire might actually be a better bet than bonds, given the current slate of valuations and how the Fed isn't guaranteed to cut rates come December."
Warren Buffett released his last Thanksgiving letter as Berkshire Hathaway CEO and will hand operational leadership to Greg Abel in January. Many investors feel uncertain about the transition, though Abel has been trained by Buffett and benefits from Buffett's experienced colleagues. Berkshire holds a record cash hoard and large U.S. Treasury Bill positions while reporting a shortage of deals deemed attractive enough to deploy significant capital. Concerns exist about a potential AI-driven market correction within the next three years. Remaining mostly on the sidelines during the AI run-up could protect investors from downside risk. Buffett will still weigh in during major market events. Berkshire's valuation and cash position may make it a preferable alternative to bonds if rate cuts do not materialize.
Read at 24/7 Wall St.
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