Mint Quick Edit | Will value investing survive Buffett’s bow-out?
Summary
The global patron of ‘value investing,’ Warren Buffett, will retire and hand over charge of Berkshire Hathaway to Greg Abel next year. The investment firm’s share price fell after this was confirmed. Why so?Even though the eventual handover was known, Berkshire Hathaway shares fell more than 6% on Monday as its board reportedly voted to name vice-chairman Greg Abel as president and chief executive officer, starting next year after Warren Buffett announced his intention to hand over the baton.
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Abel’s name as successor has been confirmed since 2021, yet such is the influence of Buffett, 94, that investors still seem uneasy about his exit. His six decades at the helm have seen immense value creation, as he, with the aid of his late business partner Charlie Munger, transformed Berkshire from an embattled textile firm to an over $1 trillion investment powerhouse.
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Its stock has fetched a mind-boggling 5,502,284% return from 1964 to 2024, according to Bloomberg. Buffett is best known for “value investing" or buying assets identified as undervalued by the market. His big bets have included Apple, Bank of America and Coca-Cola. In recent years, the company has piled up cash, arguing that most stocks were overpriced.
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Abel has been among Buffett’s close aides, but whether he’ll shift away from the value game, often seen as old-fashioned, will be closely watched.
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