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Value Investor and investment manager Vitaly Katselnelson’s opinion on Berkshire CEO change.

Greg Abel is the right CEO for today’s BRK — actually, a better fit for BRK today than Buffett would be.

BRK requires three skill sets today. The first is replacing Ajit Jain, who will be very difficult to replace — though the succession is now identified. The new CEO’s job is to make sure the right people are running that business. The second is running the rest of the BRK portfolio of private companies, and this is where BRK needs the most help. Buffett was never a traditional CEO. He loved investing (capital allocation), not managing people, and he avoided conflict at all costs. He bought businesses, let managers run them, collected the cash flows, and reinvested. Today, BRK has a collection of more than 100 operating businesses. BNSF and GEICO are the ones that matter most, and both have become hallmarks of mediocrity.

BRK has reached a size where, absent a real financial dislocation, capital allocation is unlikely to be the source of forward returns. The low-hanging fruit is improving the performance of BRK’s core holdings, and maybe even shedding companies that shouldn’t be in the BRK portfolio.

Choosing Greg was one of the most important decisions Buffett made in decades. At his first annual meeting, we could see why. A corporate Mr. Fix-It is walking through every business, identifying key performance indicators, installing the right incentives, bringing technology to them, and replacing managers who need replacing — doing things Buffett could not and would not do, but that need to be done.

Abel is not Buffett and that is okay. In fact, it is a good thing. Greg Abel may not draw 40,000 people to Omaha for the annual meeting. But he’ll make the difficult decisions Buffett didn’t want to make. He’ll make the trains run on time, literally and figuratively.

https://stocks.apple.com/A-6ERklpkSQ639AWhaJL5YA

“BRK requires three skill sets today. The first is replacing Ajit Jain, who will be very difficult to replace — though the succession is now identified.”

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“An AI reply to the “Bull” case re , Charlie Shamieh replacing Ajit Jain;

The Bull Case: Stability and Institutional Continuity
The optimistic view focuses on Shamieh’s deep integration into the Berkshire culture and his extensive global pedigree.
• Berkshire "DNA": Shamieh has chaired Gen Re since 2018. Gen Re is one of the "big four" global reinsurers and a cornerstone of Berkshire’s float. His internal promotion suggests a seamless transition that maintains the decentralized, underwriting-first culture Jain built. 
• Vast Global Experience: Unlike a specialist, Shamieh has a broad background across Life & Health (L&H) and Property & Casualty (P&C). His past roles as Chief Risk Officer at Munich Re and CEO of the Life & Health business at AIG give him a panoramic view of global risk that mirrors Jain’s own versatility. 
• Operational Modernization: While Jain was a master of "hand-shaking" massive, bespoke deals, Shamieh is known for a disciplined, analytical approach. This may be better suited for an era where Berkshire’s massive size requires more systematic risk management rather than just individual brilliance.
• Removal of Succession Uncertainty: For years, the "Ajit Factor" was a single-point-of-failure risk for shareholders. Confirming a veteran like Shamieh provides a clear roadmap for the Berkshire "float" machine.”

ciao

Agree entirely with the thesis that Greg Abel is the right man at the right time for Berkshire. But I would add a clause at the end "...for the next several years".

One analogy is considering 'strategic' versus 'tactical'.

If strategic is what you want, and tactical is how you get there, then Buffett was the master strategist. But getting the (figurative and I guess in this case partially literal) trains to run on time has been executed suboptimally, resulting in several of the largest subsidiaries now 'hallmarks of mediocrity' as noted above. Abel, the tactician, now comes across as addressing these operational deficiencies with authority, dedication and experience. A gifted strategist backed by a talented tactician is the best possible combination.

So I am leaving my substantial-to-me Berkshire allocation alone...for the next several years.

What we haven't seen to date is Abel as strategist. I think his talents there will become clear in the next decade, and possibly the next 3-5 years, depending on what happens macroeconomically both worldwide and in the US.

I'm reminded a bit of the senior George Bush, George HW, who was Reagan's VP and who was elected in his own right after Reagan's second term. Bush had the ideal CV for POTUS: combat veteran, successful private sector, CIA director, Ambassador to China, and eight years as VP. Operationally, he did well in the office. But he was handicapped by what he called "the vision thing" (1), or more specifically the lack thereof.

He lasted one term.

TL;DR: I'm happy...for now. And I sincerely hope my optimism continues to grow.

--sutton
(1) https://politicaldictionary.com/words/vision-thing...
https://content.time.com/time/subscriber/article/0...

Choosing Greg was one of the most important decisions Buffett made in decades. At his first annual meeting, we could see why. A corporate Mr. Fix-It is walking through every business, identifying key performance indicators, installing the right incentives, bringing technology to them, and replacing managers who need replacing — doing things Buffett could not and would not do, but that need to be done.

Abel is not Buffett and that is okay. In fact, it is a good thing. Greg Abel may not draw 40,000 people to Omaha for the annual meeting. But he’ll make the difficult decisions Buffett didn’t want to make. He’ll make the trains run on time, literally and figuratively.

Greg Abel was given authority over all non-insurance operations in early 2018. He's had the authority to do all this for 8 years now, and yet "BNSF and GEICO are the ones that matter most, and both have become hallmarks of mediocrity"?

Perhaps Greg has *even more* authority now Buffett is no longer CEO? Is that what we're hoping?

" Perhaps Greg has *even more* authority now Buffett is no longer CEO? Is that what we're hoping?"


Good morning partner, is investing based on " hope" sort of like, prayer?

AAAAAAAAAAAAAAAmen!

While I have high hopes for Greg's operational ability, I was thinking the same thing. Eight years is not a short time to make things right.

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