Greg Abel can’t be Warren Buffett. But does that matter?

V Keshavdev

The world’s greatest investor, Warren Buffett, has often said that he won the ovarian lottery: born in the right place, at the right time, with the right wiring to capitalise on America’s century of prosperity. But it’s a rather modest assessment from a man whose genius transformed a textile mill into a $1-trillion investment behemoth that thrived on insurance float, and whose annual letters to shareholders are considered the gospel of investing.

Now, with Buffett stepping down at the age of 95, handing over the reins to one of his trusted lieutenants, Greg Abel, effective January 2026, there’s another kind of lottery at play. Abel didn’t choose to succeed a legend, he was chosen. If Buffett won the ovarian lottery by birth, Abel won by selection.

There is no doubt Abel, a Canadian by birth, is talented. A disciplined operator who built Berkshire Hathaway Energy (BHE) into a powerhouse and allocated billions in acquisitions.

Yet, the question that is afloat is whether talent is enough to succeed a legend?

Repricing an Enigma

Lawrence Cunningham, author of Berkshire Beyond Buffett, insists that the system Buffett built is sustainable. “These guys have Berkshire blood in their veins. They may know more and embrace these values even more deeply than Warren,” Cunningham, who has written several books on Buffett, told in an episode of “The Investor’s Podcast.”

But the market isn’t still confident of the transition. Since Buffett announced his retirement last May, the Berkshire stock has fallen 10%. The so called ‘Buffett premium’ is now fast turning into a ‘succession discount.’

Gaurav Dalmia, chairman of Dalmia Group Holdings and a long time Berkshire observer who first met Buffett in 1988 on a New York subway, sees multiple forces at work. “I suspect two or three parallel things are happening,” he tells Fortune India. “One, there’s normal succession-related uncertainty. This happens in all companies. It need not be a reflection on quality of management or any succession-related challenges. Two, this is amplified by the star quality that Buffett had. No matter how capable the successor is, it’s hard to fill his shoes. Think of the shoes that Satya Nadella had to fill in at Microsoft. But he came out with flying colours.”

The third factor Dalmia adds is the dominant theme prevailing on Wall Street. “All the excitement these days is around artificial intelligence and tech. So, perhaps Berkshire would have lagged the market anyway,” says Dalmia.

Robert P Miles, author of The Warren Buffet CEO and creator of The Genius of Warren Buffet Course, notes that Buffett himself anticipated this repricing. “Buffett has said that he expected Berkshire to decline 20-25% upon the worldwide news of his death,” Miles tells Fortune India. “So, in essence he has already prepared his shareholders with the handoff of his CEO duties. Now, he gets to see how Greg handles his expanded duties and assist as needed.”

Yet for investors watching their stock lose ground to the broader market, preparation doesn’t soften the blow. The market is rendering its verdict not on what Berkshire might become, but on the fact that it will no longer be a company run by Buffett.

The Choice: Abel Over Jain

The succession itself raised eyebrows. Greg Abel got the nod over Ajit Jain, the insurance savant who was instrumental in generating float of over $174 billion, that has enriched the moat around Berkshire. Such is his genius that Buffett once said that if he, [the late] Charlie Munger, and Jain were drowning and you could only save one, “swim to Ajit.”

Yet Abel, not Jain, will be the CEO. The official reasoning is straightforward: Abel at 62 is much younger to Jain, 73, and he’s running the sprawling non-insurance business. He’s demonstrated capital-allocation skill through energy acquisitions. More importantly, he’s an operator, and builder of businesses.

Miles believes the leadership structure has been at work. “Greg has been doing the managerial work since 2018 when he became vice-chair of non-insurance. Ajit continues to be in charge of the insurance subsidiaries. Both Abel and Jain have a deep managerial bench.”

He also highlights a crucial organisational evolution that Abel has seen through at Berkshire: "Abel has already been doing the job as CEO of non-insurance companies for seven years and CEO of BHE before that. He has already created a new position of president and Adam Johnson will oversee 32 subsidiaries. Johnson also continues as CEO of NetJets. Jain continues as vice-chair of insurance. Weschler continues as investment manager.”

The reality is Berkshire isn’t just an insurance company that invests its float, it’s a conglomerate that happens to have an insurance engine. The CEO needs to allocate capital across railroads, utilities, manufacturing, retail and equities. Buffett’s reputation opened doors. His patience allowed him to wait for the right pitches and made Berkshire the buyer of choice for family businesses. In some sense his very existence has been the invisible moat around Berkshire.

In a way, while Abel inherits the portfolio, the magic remains with Buffett.

The Early Tremors

A subtle change is already underway.

Todd Combs, one of Buffett’s handpicked stock pickers, is joining JP Morgan. Longtime CFO March Hamburg is retiring and so is Ajit Jain. Whitney Tilson, a Berkshire devout and the editor of Stansberry’s Investment Advisory, mentions in an article that he’s never seen anyone leave for another company in the conglomerate’s history, until now.

Miles though has a different take on Combs departure, viewing it as a validation rather than a red flag. “Combs did a remarkable job at GEICO with record underwriting profits. He was not in line to replace Buffett or Jain. My guess is Jamie Dimon created a position at JP Morgan for him to be groomed as his replacement.”

But does benign interpretation explain the broader pattern? Every departure chips away at the institutional knowledge and a cultural continuity that has been the hallmark of Berkshire.

Dalmia provides perspective on the inevitability of talent exodus. “I don’t have the data handy, but if you look at management transitions in general across the best companies. I believe some top-level management transitions in general across the best companies, I believe some top-level departures are collateral damage to the succession process. From what one sees, Berkshire has a unique and strong culture, its top management has been around together for a long time, and it has systemic strengths not just Buffett’s persona.”

For instance, Dalmia mentions that most of the operating subsidiaries just grow and prosper the old-fashioned way and are not overly dependent on Buffett’s genius in deploying retained earnings.

But this also raises the uncomfortable question: how many senior executives were working from Buffett and not Berkshire, the institution?

Tilson worries about exactly this. “Berkshire’s senior employees and managers are all rich. They don’t need to work, and many are well past traditional retirement age. But they continue to ‘tap-dance to work’ as Buffett does—yes because they love their jobs, but also because of Buffett himself.”

Tilson writes that there are only two reasons why someone leaves a job: Either they chose to do so on their own, or they were pushed out.

“In this case, I suspect the WSJ’s speculation is correct that Abel had a hand in Comb’s departures. It never made any sense to have two people – Combs and Ted Weschler – doing the exact same job,” writes Tilson.

The turnover under Abel, Tilson predicts, will rise. “It's certain that turnover will rise under Abel, so Combs' departure and Hamburg's retirement are just the beginning,” opines Tilson.

The question is: how much?

The GE Warning

When Jack Wlech stepped down in 2001 after two decades of relentless shareholder value creation [from $14 billion to $410 billion in market value], GE was the most valuable company in the world. The transition to Jeff Immelt was supposed to keep the compounding engine going. Immelt was no less a star. A football player, a Harvard alumnus, and a GE lifer who’d run major divisions.

But what followed was a 16-year value destruction so comprehensive that it became a B-School case study in what not do. Under Immelt’s leadership over 2001-17, GE lost over $540 billion in market value. The stock, that Welch left at $40, fell to $7 by the time Immelt departed. A company that has become the gold standard for American capitalism became a cautionary tale about conglomerate complexity, financial mess and the impossibility of following a legend.

The parallels to Berkshire aren’t perfect, though there are some similarities.

Like GE, Berkshire is a sprawling conglomerate in an era where behemoths are not exactly a favourite. Like Immelt, Abel is taking over at a moment when external forces--high valuations, limited deployment opportunities, and unprecedented cash reserves-make outperformance brutally challenging.

Welch, some critics believe, built GE for the moment. Welch was brutal when it came to performance and that meant that if numbers weren’t met, the axe was to fall sooner than later on non-performers. Welch became a market darling, though the businesses that he created, especially the financial services business, would prove be a millstone for Immelt.

Buffett, by contrast, has built Berkshire for perpetuity. The only similarity he build it for an era where he won’t be present.

Immelt wasn’t incompetent. He radically transformed GE, selling off the financial services among several other businesses, to focus on the core industrial engine.

But two events doomed him. The 9/11 tragedy hit the aviation business, and the 2008 financial crisis hit GE Capital. “If Immelt had taken the reins ten years earlier, I suspect his retirement would be a victory lap,” wrote management expert Jeff Cunningham.

What also went against Immelt was that every move he made was measured to what Welch would have done. The market and investors expected Welch-level returns without realising that Immelt didn’t have Welch-like conditions. Though Immelt tried his best to keep the GE legacy alive, Wall Street punished him, more so, it appears, for letting down Welch’s legacy.

In his memoir, Hot Seat, Immelt reflects on his trials: “Most leaders will not be perfect or lucky as they make hard decisions without a map to guide them. But especially in crisis, if they insist on waiting until the skies clear, they will never do anything at all. Inaction is bad leadership, but it can feel safer than action because to act is to open yourself up to criticism.”

If Abel succeeds, people will credit the system Buffett built but if he fails, the criticism will be personal.

But Miles believes the comparison is not fair: “Abel inherits a culture of independent subsidiary CEOs.”

The Apple Analogy

The optimistic case for Abel would be Apple. When Steve Jobs passed away in 2011, many predicted Apple would flounder under Tim Cook, a supply chain operations guy who lacked Job’s visionary genius. Instead, Apple’s stock has risen nearly 2000% under Cook, four times the S&P 500’s return.

Cook succeeded by being himself and playing to his strengths: disciplined operator who improved margins, expanded services, returned massive capital to shareholders, and let Apple’s product team do what they did best. He didn’t try to be Jobs, instead he built on Job’s foundations.

Dalmia frames it in terms of formula rather than imitation: “No two case studies are the same. Cook inherited a formula that works. You refer to it as the innovation engine. But he was an ops guy, not a product or marketing guy. Yet, look at the wonderful performance. In a similar way, Abel has inherited a formula that works. This is a different formula. I would call it their capital deployment engine. He doesn't need to be a capital deployer in the same mould as Buffett, just as Cook was not a tech evangelist as Jobs.”

He’s explicit about the risk, though. “The next 20 years will be different for Berkshire. I assume this leader is appropriately different. Of course, the GE scenario could play out. One shouldn't rule it out. But the best way to think of complex situations is in terms of bets and probabilities. To me, this bet is more likely to be Apple-like than GE-like,” says Dalmia.

Miles is more direct about the differences: “Abel is a different type of manager than Warren. When asked about their legacy Warren said he wants to be remembered as a teacher. Whereas Greg said he wants to be remembered as a coach. Abel has been more hands on than Buffett and based on their self-definitions, they are different types of managers.”

Abel could follow a similar path to Cook. He can just be Greg Abel: improve operations, deploy capital prudently, and maintain the culture where it works.

The pessimistic case points to Immelt. The culture that Welch built became Immelt’s cage. "The only thing that could go wrong is the people," Cunningham warns. "The wrong person getting the wrong positions... a micromanager or someone interested in the short term or someone who wants to get rid of businesses."

Dalmia offers a firsthand perspective on Berkshire's culture that goes beyond theory. “I can tell you from what I hear: he's [Abel] very down to earth, like Buffett, he's very focused, like Buffett, he's not taken in by the excesses of group think, also like Buffett. I can give you a personal example. My son was to work under him when he finished his undergrad at UC Berkeley but couldn't do it eventually because his visa was inordinately delayed. Greg Abel was directly in touch with my son over email. He even invited him for dinner.”

This anecdote is important. “What this shows is that Berkshire is a very easy and non-hierarchical organisation, and such organisations are also typically very adaptive,” explains Dalmia.

So, if Berkshire’s culture is truly systemic rather than dependent on Buffett’s charisma, it could evolve under Abel rather than implode.

On the question of the lack of intellectual firepower in the absence of Munger and Buffett, Miles pushes back on the notion of diminishment: “The intellectual firepower is different but not diminished.”

The $380-Billion Question

Perhaps the most daunting challenge Abel faces is also the most visible: Berkshire’s unprecedented $380 billion cash hoard. Yet Miles is quick to point out that it’s the largest cash reserve, and despite earning around 3.6% in Treasury bills, that’s $13.8 billion annually. “Berkshire’s cash earn enormous returns greater than most companies in the S&P 500,” say Miles.

But here’s the paradox: Buffett himself couldn’t deploy this cash. In other words, if the greatest capital allocator in history found it tough to find value both in public and private markets, can Abel do any better?

Dalmia though sees this differently: an opportunity rather than a burden. “Look at the freedom it gives him to make defining moves as and when the market corrects,” he says. “Even in Buffett’s times, during bull runs, people questioned whether Berkshire was missing out. However, through cycles, Buffett demonstrated he wasn’t. He didn’t have to play every ball bowled to him. There’s virtue in waiting for the right ball to hit a six.”

This patience-as-a-strategy perspective challenges the narrative of Abel facing impossible deployment challenges. “I think it may be myopic to look at Berkshire from the lens of the financial markets. Abel will likely deploy this war chest in ‘boring’ private businesses, whether they are bolt-on acquisitions for their current portfolio, or in new areas. His professional growth has been in Berkshire culture. So, one expects discipline of capital deployment and building businesses are his forte,” explains Dalmia.

Supporting the view, Miles says: “Weschler continues as an exemplary investment manager to assist with the stock portfolio, acquisitions and capital allocation decisions.. Abel and Weschler have already deployed large sums of capital and are at top of their game. Weschler was responsible for Berkshire’s most successful investment—Apple.”

In other words: Abel doesn’t need to be Buffett the stock picker. He needs to be Abel the business builder, supported by investment professionals such as Weschler and a culture that rewards patience over activity.

Miles agrees: “Abel doesn’t have to deploy capital and can simply continue to let Berkshire’s cash earn enormous returns.”

Importantly, Abel has spoken on how he thinks about allocating capital. “Warren talks about curiosity being important as you go through things. That would be my style to have questions and comments around their business, their frameworks. At the same time, they have great businesses and they run them very autonomously and that remains in place. But if there’s opportunities to see where maybe I’ve seen something in another business or an opportunity I may see in their industry, we’re going to discuss it and see if that’s something we should pursue or if we are properly addressing the risk,” Abel said at the 2025 annual general meeting.

The Valuation Check

The market though is already rendering its verdict. The stock price of Berkshire has declined 10% since the May 2025 announcement that Buffett would be stepping down by the end of the year.

The drop isn't panic; it’s repricing. In other word, investors are removing the Buffett premium.

Dalmia, though, questions the premise. “I’m not sure Buffett fetches premium valuation. The last time I saw, it [the share price] was a discount to its sum of parts. Look at growth in book value and expect that over longer periods of time, the stock price will mimic that growth.”

Miles is pragmatic about what comes next. “Because of its asset size and mature wide moat businesses, Berkshire is likely to compound at 1-2% than the S&P 500.”

That’s a far cry from the 20% annual compounding that made Buffett a legend. But it would not be ascribed to Abel, but to the fact that Berkshire is more of a conglomerate.

On governance and disclosure, both observers expect evolution. Dalmia says: “I guess Berkshire will evolve to undertake standard disclosures. It won't have the poetic licence, or in this case, the "Buffett licence" anymore. Evolution is part of all companies, more so when the founder retires. But I think the Berkshire culture will remain intact.”

He adds a hopeful note, quoting Buffett’s famous quip with a twist. “Buffett was famous for saying that he planned to keep working for ‘about five to ten years after I die.’ I somehow believe -- and hope -- it'll be longer than that.”

Buffett has also mentioned in the 2025 annual meeting: “Greg doesn’t need the money, Ajit doesn’t need the money – not remotely – but they enjoy what they do and they’re so damn good at it. I’ve had the advantage of seeing how that works over time.”

Miles expects continuity. “Berkshire has always been a full disclosure company, and I expect its corporate governance to continue.”

Legends leave. Successor endures

Some leaders inherit companies at inflection points where opportunity exceeds challenge.

Abel drew a complicated hand. He inherits extraordinary assets: $380 billion in cash, crown-jewel businesses, and a culture that remains unique. Yet, at the same time, he is walking into role that is demanding, and the impossible task of following a man who defined investing.

Can Abel embody similar qualities while being his own person? His willingness to directly email Dalmia’s son, to invite him to dinner despite a work arrangement falling through, suggests he might have the right instincts.

Miles frames the challenge in terms of deal flow and continuity. “The deal flow should continue but the chain of command will now go first to Abel.” It's a procedural shift. Everything still works the same way, except the person at the top of the chain is different.

This is something Buffett, too, made it official at last year’s annual meeting. “Greg would have the tickets. Whether it’s acquisitions – I think the board would be more welcome to giving him more authority on large acquisitions probably if they knew I was around. But Greg would be the chief executive, period,” said Buffett.

But when you have great shoes to fill, simply being good, at times, isn’t enough.

In his memoir, Hot Seat, Immelt reflects on a bitter truth. “There was never a time in sixteen years as CEO that I was sheltered from the critic—the media, our investors, my predecessor. …We live in a world without enough nuance. Too often, complicated situations or people are distilled down to simplistic judgments.”

Now Abel faces the harder task of proving that being himself is enough. And if Dalmia is right, the weighing machine will eventually replace the voting machine. But first, Abel must endure the comparison, the impossible expectation of following a legend and the market’s impatience for proof. Abel has won the succession lottery, but the winnings will take their time coming.