Warren Buffett Retires, Who is the Designated Successor Abel?

Author: Smart Investor

 

At 9 p.m. Beijing Time on May 3rd, the Berkshire Hathaway Annual Shareholders' Meeting will open in Omaha.

This year, Greg Abel and Ajit Jain will be on the stage with Warren Buffett, and especially Abel, as the successor, will accompany Buffett throughout the entire event.

In May 1, 2020, due to the impact of the COVID-19 pandemic, the shareholders' meeting was held online, and Abel and Jain participated in the Q&A session for the first time, representing non-insurance and insurance businesses respectively.

After Charlie Munger's passing in November 2023, Berkshire experienced its first annual meeting without Munger (2024), and Abel sat at Buffett's left side as the successor.

In his letter to shareholders in February this year, Buffett mentioned Abel multiple times, specifically highlighting him.

When discussing capital allocation at Berkshire, Buffett praised Abel for his patience similar to Munger in stock and subsidiary investments, and his decisive actions when opportunities arise.

When Buffett mentioned his investment in Japan's five major trading companies, he wrote, "Over time, our appreciation for these companies has deepened. Greg has met with them multiple times, and I have regularly followed their progress. I expect that Greg and his successor will hold these Japanese investments for decades."

Buffett reminded us that Berkshire's 10-K filing is never "empty flattery and pretty pictures," and that Greg will not change this after taking over.

"I am 94 years old, and soon Greg Abel will take over as CEO and start writing the annual shareholder letter. Greg shares my belief that reports are not just routine affairs, but a responsibility of the CEO of Berkshire. At the same time, he also knows that once you start deceiving shareholders, you will soon deceive yourself."

As the era of Buffett is gradually coming to an end, understanding Greg Abel may be the key to understanding the direction of Berkshire for the next ten or twenty years.

In the February-March issue of Fortune magazine, there was an article titled "Meet the man picked to succeed Warren Buffett" by Shawn Tully, which is probably the most detailed introduction we have seen about Abel so far.

Abel is low-key and has a gentle and outgoing personality, and is highly sensitive to numbers. People who know him say that Abel has a lot of Buffett's characteristics, just lacking some of the boss's signature performance talents.

As described in this feature, he is not as inclined to delegate management as Buffett, but rather pays great attention to details and emphasizes the actual push for subsidiaries.

Former CEO of Brooks, Jim Weber, said, "If you perform poorly, Greg will tell you directly and give you a few months to adjust."

（Click to read: 《Smart Investment Interview | The 'Business Genius' Jim Weber Chosen by Buffett: Berkshire Has Always Been an Excellent Base for Building Brooks, We Were Not Forced to Grow》）

Professor Larry Cunningham of the University of Delaware also commented, "Greg won't let those who fall behind continue to fall behind."

This focus on execution and emphasis on improvement aligns with Berkshire's culture of emphasizing actual results and opposing empty promises, gradually earning Buffett's high trust in Abel.

During this process, Abel has shown three traits that are strikingly similar to the "Prophet of Omaha": the talent to build trust, the insight to discover opportunities, and the wisdom to avoid risks.

This article systematically recounts how Abel went from a small town in Canada's prairies, Edmonton, into the core of Berkshire, from energy business to overall group management, and how he gradually accumulated today's trust and responsibility.

It is very rich and interesting.

Smart Investor (ID: Capital-nature) specially translated and organized this article, and dedicated it as a footnote to this special moment.

01 About Tariffs and Global Trade

"Warren, who is your CEO successor?"

This question, perhaps the most asked and long unresolved mystery in corporate history.

At the annual shareholders' meeting of Berkshire Hathaway, every year, during the Q&A session hosted by Warren Buffett and Charlie Munger, shareholders always ask this classic question. The two leaders usually respond, "The board has designated a successor, but we will not reveal his name." This, along with a 5-kilometer marathon race, a coconut candy dipping sauce display at See's Candies, has become an indispensable part of the weekend activities at the shareholders' meeting.

Until May 1, 2021 afternoon (at that time, due to the impact of the COVID-19 pandemic, the shareholders' meeting was held online), the situation finally changed. At that time, 97-year-old Munger accidentally said, "Greg will continue this culture" when answering questions about the company's future culture.

This "slip of the tongue" ended the longest and most closely watched CEO succession mystery in business history.

Investors and observers of Berkshire immediately realized that "Greg" referred to Greg Abel. Two days later, Buffett officially confirmed to CNBC that after his retirement, Abel would take over the helm of Berkshire.

This rule, which began in 1970, accompanied the anti-Vietnam War movement sweeping university campuses, Elvis dominating the music charts, and Nixon's initial rise to the presidency, will now have a new successor. This revelation set an important milestone for the future development of Berkshire.

Abel, 62 years old, became one of the top candidates for succession since early 2018. At that time, Buffett and Munger jointly appointed him and another competitor, Ajit Jain, as vice chairman and directors.

Since then, Abel has been fully responsible for all non-insurance businesses under Berkshire - covering two sectors: railroads, aerospace, and energy industry giants, as well as a series of well-known consumer brands including DQ, Brooks Running, and Benjamin Moore paint.

This dazzling array of diversified businesses constitutes the largest non-financial balance sheet in the United States, contributing two-thirds of Berkshire's non-investment income. Meanwhile, Jain, 73 years old, continues to manage the insurance business sector.

Meanwhile, Buffett himself still personally manages the huge investment portfolio - this $600 billion stock, bond, and cash combination, which has been frequently changing in recent years - and his two long-time assistants, Ted Weschler and Todd Combs, are also assisting in managing it. It is worth noting that these two assistants were also considered as potential dark horse candidates for the CEO position.

02 About the Investment in Japan

Abel's intersection with Buffett began a quarter of a century ago when Berkshire entered the energy field. Since becoming CEO of Berkshire Hathaway Energy (BHE) in 2008, he has gradually built an energy empire covering utilities, oil pipelines, natural gas plants, wind and solar power stations, and a large transmission network. This segment has now become an important pillar of Buffett's business kingdom.

Today, the businesses under Abel's jurisdiction generate annual revenue of about $27 billion - if calculated separately, BHE could rank among the top ten in the Fortune 500, surpassing Microsoft and Chevron (Berkshire itself ranks fifth).

During the process of gradually gaining Buffett's trust, Abel has demonstrated three traits that are remarkably similar to the "Prophet of Omaha": the talent to build trust, the insight to discover opportunities, and the wisdom to avoid risks.

As Buffett said in 2021: "There are many smart people in the world, but some smart people make many foolish things. Greg is a smart person, but he will never do stupid things."

Of course, 94-year-old Buffett has not yet announced his retirement plan, and his excellent performance at the 2024 May shareholders' meeting proved that his mind is still sharp.

But it cannot be ignored that, Berkshire's overall performance has not been as glorious as before. From 1965 to 2003, Berkshire's average annual return was 19.8%, exceeding the S&P 500 index by nearly 10 percentage points per year on average. However, in the past decade, Berkshire's average annual return was 11.6%, lower than the S&P 500 index's 13.2%.

"The only reason for a conglomerate to exist is to outperform the S&P index," said Dave Cote, who served as the CEO of diversified manufacturing giant Honeywell from 2002 to 2017.

For a long time, Buffett has successfully resisted the pressure from aggressive investors who tried to "release value". Even after his death, Berkshire will still maintain a strong defense system.

Although Buffett has donated more than half of his Berkshire shares to charities (mainly the Bill & Melinda Gates Foundation) since 2006, he still controls more than 30% of the voting rights.

Additionally, he (in last Thanksgiving) amended his will, deciding to donate almost all of his inheritance to a charitable trust managed by his three children, Howard, Peter, and Susan.

According to the will, this wealth will be distributed to various charitable causes over the next ten years after Buffett's death (including their own foundations).

Therefore, the large number of Berkshire shares held by this trust will effectively prevent potential threats from aggressive investors to the company for many years. At the same time, Buffett has designated Howard to serve as his successor chairman, further strengthening Berkshire's defense system.

However, as the A-class shares held by the trust are converted into B-class shares for charity, external investors, including fund managers, ETFs, and individual shareholders, will gain more voting rights.

This shift in power is likely to occur during Abel's tenure.

Although Berkshire's trillion-dollar market value makes it difficult for private equity funds or industrial giants to launch a full acquisition, the dispersion of voting rights may attract the harassment of aggressive investors.

03 About Cash on Hand

In contrast to the globally renowned Buffett, little is known about Abel's background, personal style, and management philosophy.

Besides attending a few events with Buffett, he has never given interviews to business media, and his main public appearances have been limited to the past three Berkshire Hathaway annual meetings - last year he took over from the late Munger (who passed away at the end of 2023) at the podium seat.

Berkshire Hathaway Energy declined an interview request from Fortune magazine, but Buffett replied by email: "I am extremely satisfied with Greg's performance. But I no longer accept interviews. At 94 years old, I not only play bridge slower, but I have also gradually reduced or completely stopped many other activities. However, I still enjoy it and can still do a few things well."

However, through interviews with people who know Abel, reviewing his past public speeches on personal experiences and management philosophy, and the actual performance he has delivered at Berkshire, a clear image gradually emerges: he is a leader who is extremely close in spirit to Buffett, but may also walk his own path.

Ultimately, for everyone who cares about Berkshire, the real question is only one: Warren Buffett created the greatest wealth machine on Wall Street. But after him, even if it is a successor personally chosen by him, can he handle this giant?

If it is said that Buffett's chosen successor has a simple and approachable nature, no one would be surprised. People who know Abel say that he has a lot of Warren's characteristics, just lacking some of the boss's signature performance talents.

Abel grew up in the Canadian prairie city of Edmonton, known as the "oil capital" of the country, famous for alternating periods of economic prosperity and decline. His mother was a homemaker who also worked as a legal assistant, and his father sold fire extinguishers.

"People had jobs and unemployment back then," Abel recalled in an interview with the Horatio Alger Association (an organization that provides scholarships to students in extreme poverty, and Abel has been a long-term supporter), "but family and close friends always gave you the power to dream."

His first business venture was delivering advertising flyers door-to-door on a bicycle, earning 0.25 cents per flyer.

Young Abel - in the photo, you can see his messy Beatles-style hair - then started collecting discarded soda bottles. He kept looking for better routes home to find more bottles. Every day after school, he could collect up to five bottles, and by the weekend, his room would be filled with 20 bottles, totaling about $1.

After high school, he helped at his father's company, filling fire extinguishers.

Abel's lifelong love for ice hockey began in his hometown of Edmonton, a city famous worldwide for the Oilers' legendary player Wayne Gretzky.

His ice hockey initiation came from his uncle Sid Abel, a Hall of Fame ice hockey star who played for the Detroit Red Wings and Chicago Black Hawks for 14 seasons.

Little Greg trained on the ice until his parents called for dinner. This rugged sport taught him the true meaning of teamwork. "Playing ice hockey will make you understand that it's easier to succeed by fighting for the team rather than going solo," Abel said.

Until his mother Bev passed away at the end of 2022, he would call her every July 1st to deeply analyze the Oilers' signings and mistakes during the off-season.

Abel's plain Midwestern values perfectly match the city atmosphere of Des Moines, where the headquarters of Berkshire Energy is located. He voluntarily funded the Abel Ice Arena to coach his son's youth ice hockey team, which is located in the RecPlex, a large sports complex in Des Moines. This year, he stepped down from the head coach position to become an assistant coach, to reduce some pressure.

According to his friends in Des Moines, if you meet Abel at the Iowa State Fair or Calgary Stampede, you are more likely to think he is a local teacher or bank employee, rather than someone about to take over the most important position in American business.

"His approachability fits any occasion," said Mark Oman, a former executive of Wells Fargo. "As a neighbor, he is the kind of person who is unassuming and down-to-earth, best suited to watch the Oilers game or NFL football together."

Oman added that Abel has a sense of humor. Last year, when they watched the Olympics together, Abel joked that he finally found a competition he could win: "I can participate in the Iowa curling championship." He joked that in the Hawkeye State, curling has almost no competitors.

04 About Insurance and AI

Those who know him say Abel is good at building deep relationships. "He becomes friends with people the moment he meets them," Oman described, "not extroverted, but 100% friendly. No one is better than Greg at creating a party atmosphere - not through exaggerated means, but through personalized care to make each guest feel at ease."

Even with a busy schedule, Abel is willing to provide selfless advice.

Professor Larry Cunningham of the University of Delaware (author of several books on Buffett) exclaimed, "He has extraordinary wisdom, but surprisingly, you will never feel stupid or unreasonable in front of him. He always makes you feel comfortable."

Dawn Farrell, Chairman of Trans Mountain, a pipeline giant, and Abel formed a friendship through business cooperation, often seeking his advice: "If I need strong advice on some issues unrelated to him, he will always take the time to help me sort it out."

In the eyes of former Honeywell CEO Dave Cote, Abel's involvement in the Horatio Alger Association was particularly impressive. This organization provides scholarships to extremely poor students, many of whom have suffered abuse, lived in cars with their mothers, or witnessed family destruction due to drugs.

Abel served as the chairman of the organization in 2018 and still plays an important role on the executive committee.

"He did a lot for these kids," Cote said. In addition, he believes that Abel is not only passionate about philanthropy, but also humble and sincere. "With his status, he could have chosen to be indifferent and distant, keeping his distance to protect himself. I've seen too many people with less status than him who act more superior."

Abel's victory in the succession competition may be due to his gentle and outgoing personality, which is closest to Buffett - this similarity contains significant commercial advantages.

Of course, you won't see Abel dancing with the Nebraska University cheerleaders, riding bulls through Omaha streets, or playing ukulele on "Today" to sing "My Way" - these classic moments have made Buffett's legend.

But Abel demonstrates "big person charm" in his unique way: he casually holds a microphone and walks through the audience at the Berkshire annual meeting, explaining technical details of utilities in simple language; he inherits Buffett's sincerity and charm, which helped the latter gain the trust of regulatory agencies and stubborn founders - those founders only wanted to entrust their life's work to someone they trusted.

Oman pointed out, Abel has "massive information digestion ability". Business partners revealed that he can even "skim" balance sheets and income statements, quickly capturing key data.

Buffett is amazed by his work enthusiasm, joking that "Greg discovered a time-space rift of more than 48 hours a day in Des Moines."

Abel's deep understanding of business operations, especially the flow of every dollar, stems from his studies at the University of Alberta. He initially focused on finance, then switched to accounting to better understand the relationship between balance sheets and cash flow statements.

After graduating in 1984, he joined PWC's Edmonton branch. A few years later, he was sent to the San Francisco office for a short-term assignment.

In 1991, Abel became the auditor of CalEnergy, the second-largest geothermal power company in the US. This experience shaped his management philosophy and met his career's key mentor.

05 About Patient Investing and Decisive Swings

At that time, Buffett's childhood friend and Berkshire board member Walter Scott hoped to achieve the diversification of his engineering company Peter Kiewit Sons’ through the acquisition of the heavily indebted CalEnergy. He already had the right person in mind to lead the company - David Sokol.

Sokol, a 35-year-old business prodigy, had just founded a garbage incineration company in Omaha and successfully listed it, making a fortune.

Kiewit acquired a controlling stake in CalEnergy for $28 million, and Sokol immediately took over, appointing 28-year-old Abel as the company's accountant.

The Kiewit culture profoundly influenced Abel's working style and negotiation style.

This company values practical and hardworking spirit: employees work for life, moving around to participate in dam, bridge, and oil platform construction.

Sokol became Abel's transaction mentor, and Scott, 20 years older, became his leadership role model.

In 2020 (the year before Scott's death), Abel interviewed his former boss at an Omaha charity event, guiding Scott to recall his childhood experiences of mowing grass on the farm, measuring the Monticello Dam during summer vacation in college, and working 18 different jobs over 12 years.

Abel candidly admitted that he loves visiting landmarks such as the St. Lawrence Seaway and Garrison Dam, which Scott had fought for. These places fascinated him. He listened to Scott's memories on stage with admiration, occasionally exclaiming, "That's amazing, I really like this story!"

At that time, David Wit, a technology entrepreneur and director of CalEnergy, witnessed the operation of the trio of Scott (chairman), Sokol (CEO), and Abel (financial architect). He was amazed by the team's courage to acquire and their insistence on thoroughly understanding the financial data of the target and making decisions after predicting potential risks.

"Scott has a keen eye," Wit told Fortune, "Greg has both approachability and acumen: humble, diligent, and free from the arrogance of the elite class. More importantly, he truly understands numbers."

During this period, CalEnergy began a series of acquisitions, including a British utility company, which Abel successfully turned into a profit machine.

This achievement earned Scott's high praise, and Scott recommended Abel's talents to his friend Warren Buffett.

Subsequently, they also acquired a major power supplier and renamed the company MidAmerican.

But in the late 1990s energy market boom, utilities were still a niche - investors were eager to pay high premiums for companies like Enron, AES, and Calpine because these companies continuously acquired power transmission networks, power plants, pipelines, and utility assets to cater to the fully liberalized energy market.

While MidAmerican Energy focused on acquiring regulated assets overlooked by the boom, its monopoly position and stable customer base were what emerging companies lacked.

Scott realized that these "cash-cow" assets were exactly what Buffett liked.

In 2002, Buffett recalled in an interview with Andy Serwer of Fortune: At that time, having left Kiewit and taken over the fiber-optic company Level 3, Scott flew from Omaha to Carmel, California, and persuaded Buffett in the living room of his sister's house to acquire MidAmerican Energy.

"Walter pulled me into the room and told me that this utility company had been trying to explain its business model to Wall Street analysts, but the analysts weren't interested because they were more focused on companies like AES and Calpine that had fast transaction rhythms and frequent mergers and acquisitions," Buffett recalled.

Scott asked Buffett whether he was willing to join him, Sokol, and Abel's team to privatize MidAmerican Energy.

Buffett has always liked contrarian investing, and he was excited about this idea. In October 1999, Berkshire announced the acquisition of a controlling stake in MidAmerican Energy, and Scott joined as a minority shareholder.

As the fully liberalized energy market turned into a crisis, MidAmerican Energy quickly became a "premium buyer" for companies disposing of assets.

In 2002, Williams Companies sold the Coeur d'Alene Pipeline to MidAmerican Energy for $960 million, this pipeline connects the Rocky Mountains, Las Vegas, and California, and this price was tens of millions lower than the valuation two years earlier.

That same year, Sokol and Abel acquired Northern Natural Gas Co. for $928 million, a 17,000-mile natural gas pipeline network connecting the Permian Basin in Texas and the upstream areas of the Midwest. This transaction was $600 million less than Dynegy had paid to buy it from Enron a few months earlier.

Serwer reported that when Buffett spoke about these achievements, he was "excited like catching a giant tuna."

06 About Dollar Depreciation

Since 2007, Buffett has sent Sokol to clean up problem subsidiaries at Berkshire, taking over insulating material manufacturer Johns Manville and business jet operator NetJets successively.

The following year, Abel became CEO of MidAmerican Energy.

Sokol's outstanding performance as a "firefighter" once made many investors believe he was the most promising CEO successor. However, in 2011, Sokol suddenly resigned after being questioned about buying stocks in Lubrizol, a lubricant manufacturer, before recommending its acquisition to Buffett (Berkshire later completed the acquisition of Lubrizol). Fortune magazine attempted to contact Sokol via email without a response.

After Sokol left, Abel's promotion was already a certainty.

After taking over the energy sector, Abel continued to maintain strong profit growth, skillfully using Berkshire's solid balance sheet to acquire assets at low prices, using all cash flows for business expansion, creating the compounding miracle that Buffett cherished.

In 1997, CalEnergy's revenue was $2.3 billion, and profit was $139 million; by 2022, Berkshire Energy (BHE)'s revenue soared to $26.4 billion, and profit reached $3.9 billion.

Abel also avoided a potential PR crisis for Berkshire regarding environmental issues through a forward-looking negotiation, further solidifying the company's image in the eyes of environmentalists and regulators.

At that time, the hydroelectric dams along the Klamath River in Oregon and northern California were damaging the fishing resources of the Indian tribes. Abel, with his patient and flexible negotiation style, facilitated an agreement: MidAmerican Energy would shut down these dams, but would be allowed to continue operating for a period to recover part of the investment, while the cost of demolition would be covered by state-issued bonds and a slight increase in electricity rates.

This historically largest dam removal project was completed earlier this year, and the Klamath River is now flowing freely again, expected to soon bring a new fishery harvest, benefiting the local indigenous tribes' fishermen.

Abel summarized his negotiation style in a video interview in 2015, stating: "The key is, how do you get the other party involved? How can we become long-term partners?"

Whether serving as CEO of MidAmerican Energy from 2008 to 2018 or later overseeing all of Berkshire's industrial business segments, Abel has demonstrated a tough, hands-on management style and has become an important driver of green energy infrastructure development in the United States.

Under his leadership, Berkshire has aggressively entered the solar energy field and has also become the largest regulated wind energy utility company in the United States, operating numerous wind farms in Texas, California, and the Midwest (especially Iowa).

At the 2024 May Berkshire annual shareholders' meeting, Abel announced that just a few weeks earlier, on Earth Day, strong winds powered the wind turbines to meet the full electricity needs of over 800,000 Iowa customers of MidAmerican Energy. (In mid-2022, Berkshire acquired 8% of BHE held by the Scott family and Abel, with Abel selling 1% of his shares for $870 million.)

In the manufacturing, service, and retail segments (with a scale of $165 billion, covering dozens of subsidiaries such as NetJets, Benjamin Moore, and Clayton Homes, excluding railroad and energy businesses), Abel also brought significant improvements, increasing the operating profit margin from 4.9% in 2017 to 7.6% in 2023.

Unlike Buffett's "hands-off management," Abel is personally involved and does not tolerate inefficiency.

Jim Weber, former CEO of Brooks, revealed that Abel visits the company's headquarters in Seattle several times a year to discuss company strategy with the management. "If you don't perform well, he will tell you directly and give you a few months to adjust," Weber said in an interview at the 2021 Berkshire annual shareholders' meeting.

Larry Cunningham also said in an interview: "Greg won't let those who fall behind continue to fall behind. If you don't perform well, you will receive his phone call."

Buffett himself also admitted in a 2023 CNBC interview: "Greg may be even tougher in execution than me. After executing, he can leave with a smile, and those executed can also feel good."

07 About the Work of the Efficiency Department

From the outside, Abel seems to be about to take over a stable and well-managed business empire, but in fact, Berkshire faces many challenges.

Recent overall performance is acceptable, but compared to the previous glory, it has clearly declined. Some previously thriving subsidiaries are currently performing weakly:

Auto insurance giant GEICO lags far behind competitors like Progressive in using telematics to price risk, leading to loss of market share;

BHE profits declined from the 2022 peak due to wildfire compensation;

Its railway company BNSF ranked last in returns among the five major U.S. railroads in the past two years, and Buffett has publicly stated that BNSF urgently needs a "major restructuring of cost structure."

Buffett himself also admits that some of Berkshire's enterprises have performed poorly for a long time and have some "dragging" business segments.

Facing these challenges, how will Abel deal with them, and can he continue Buffett's legend? This is not only about the future of Berkshire, but also about the confidence of Wall Street in this "wealth machine."

Abel can boost performance through three strategies and revitalize those underperforming businesses

"He will push us as any great manager would." said Troy Bader, CEO of DQ.

Recently, Abel's management style has already been reflected. He dispatched Adam Wright, a 47-year-old executive who successfully managed Sino-American Energy, to take over the management of Pilot Travel Centers, the largest chain of truck service centers in the United States.

Wright was once an NFL quarterback, and Buffett praised him as an "outstanding executive." Currently, Wright has started renovating old convenience stores and optimizing the company's financial condition.

Strategy 2: Establish an Operational Management Team

This structure is unprecedented in Berkshire's history, but it may become a necessary step.

It should be noted that Abel will receive significant support — Ajit Jain continues to lead the insurance business, and he can also rely on Todd Combs and Ted Weschler for managing the large stock and bond portfolio.

Legendary CEO coach Ram Charan pointed out: "Greg cannot manage 80 subsidiaries personally." David Kass, a professor at the University of Maryland, believes that Abel can divide non-insurance businesses by industry, with each group consisting of approximately 20 companies managed by dedicated individuals.

Strategy 3: Integrate Procurement and Operational Resources

Successful corporate groups like Honeywell and Danaher have achieved economies of scale by centralizing the procurement of raw materials and components, and promoting "best practices" across all factories.

In contrast, Berkshire's current synergies mainly manifest in the financial aspect, such as the headquarters providing financing for Clayton Homes at a rate lower than that of banks or the bond market.

As Mead pointed out, Berkshire has not integrated procurement, such as not encouraging its subsidiaries to jointly purchase aluminum or semiconductors, nor promoting cross-selling of GEICO insurance.

Buffett admitted that as Berkshire grows in size, the company will not be able to achieve the high returns of the previous 40 years.

However, he believes that Berkshire still has the potential to outperform the S&P 500 index by 1 to 2 percentage points. The most likely scenario is that Abel will largely continue the basic formula that led Berkshire to success:

At times of crisis, as the "last buyer," having the ability to write checks worth billions of dollars;

Increasing equity investments when the stock market is weak, and selling off promptly when valuations are high;

Actively repurchasing shares when the company's market value is below its intrinsic value.

As for the true "intrinsic value" of Berkshire — perhaps no one other than Greg Abel himself is closer to the correct answer.