As we approach the end of the Buffett era, understanding Greg Abel may be the key to comprehending Berkshire's trajectory over the next ten or twenty years.
On May 3rd at 9 PM Beijing time, the Berkshire Hathaway annual shareholder meeting will kick off in Omaha.
This year, sitting alongside Warren Buffett on the podium will still be Greg Abel and Ajit Jain, with Abel, as the successor, accompanying Buffett throughout the event.
The shareholder meeting on May 1, 2020, was held online due to the COVID-19 pandemic, and Abel and Jain represented the non-insurance and insurance businesses, respectively, participating in the Q&A session with Buffett for the first time.
After the passing of Charlie Munger in November 2023, Berkshire experienced its first annual meeting without Munger in 2024, with Abel sitting to Buffett's left as the successor.
In this year's shareholder letter, Buffett mentioned Abel several times, specifically highlighting his patience in waiting for opportunities in stock and subsidiary investments, similar to Munger's approach, and his decisiveness when the right moment arises.
Buffett wrote about the investment in Japan's five major trading companies: "Over time, our appreciation for these companies has deepened. Greg has met with them multiple times, and I regularly monitor their progress. I expect Greg and his successor will hold this portion of Japanese investments for decades."
Buffett reminded us that Berkshire's 10-K filings have never been "hollow platitudes and pretty pictures," and this will not change under Greg's leadership.
"I am 94 years old, and soon Greg Abel will succeed me as CEO and begin writing the annual shareholder letter. Like me, Greg adheres to Berkshire's creed—that the report is not just an annual routine but a responsibility of the Berkshire CEO to the shareholders. He also understands that once you start deceiving shareholders, you will soon deceive yourself."
As we approach the end of the Buffett era, understanding Greg Abel may be the key to comprehending Berkshire's trajectory over the next ten or twenty years.
In the February/March issue of Fortune magazine, an article by Shawn Tully titled "Meet the man picked to succeed Warren Buffett" provides perhaps the most detailed introduction to Abel we have seen so far.
Abel is low-key, with a gentle yet outgoing personality, and is highly sensitive to numbers. Those who know him say he has a Buffett-like demeanor, albeit with less of the boss's signature performance talent.
As described in this feature, he does not prefer to manage hands-off like Buffett but pays great attention to detail and values the actual driving force behind subsidiaries.
Former Brooks CEO Jim Weber described him: "If you are underperforming, Greg will tell you directly and give you a few months to adjust."
Larry Cunningham, a professor at the University of Delaware, also commented: "Greg will not let the laggards continue to lag."
This focus on execution and emphasis on improvement aligns with Berkshire's longstanding culture of emphasizing actual results and opposing hollow promises, gradually earning Abel Buffett's high trust.
In this process, Abel has demonstrated three key traits akin to the "Oracle of Omaha": the gift of building trust, the insight to discover opportunities, and the wisdom to avoid risks.
This article systematically narrates how Abel journeyed from the small town of Edmonton on the Canadian prairie to the core of Berkshire, accumulating trust and responsibility step by step from the energy business to overall group management.
It is rich and exciting.
Smart Investor (ID: Capital-nature) has specially translated and organized this article as a footnote for this special moment today.
01 About Tariffs and Global Trade
"Warren, who is your CEO successor?"
This question may be the most frequently asked and long-unresolved mystery in corporate history.
At the Berkshire Hathaway annual shareholder meeting, every year, during the live Q&A session hosted by Warren Buffett and Charlie Munger, a shareholder will throw out this classic question. The two leaders typically respond, "The board has designated a successor, but we will not disclose the name." This has become an indispensable part of the weekend activities at the shareholder meeting, akin to a 5-kilometer race or a display of coconut candy dipping sauce.
It wasn't until the afternoon of May 1, 2021 (when the shareholder meeting was held online due to the COVID-19 pandemic) that the situation finally changed. At that time, 97-year-old Munger unexpectedly stated while answering a question about the company's future culture: "Greg will continue this culture."
This "slip of the tongue" ended the most closely watched and longest-lasting CEO succession mystery in business history.
Berkshire's investors and observers immediately realized that "Greg" referred to Greg Abel. Two days later, Buffett officially confirmed in an interview with CNBC that Abel would take over the helm of Berkshire after he stepped down.
This reign, which began in 1970 amid the anti-Vietnam War wave sweeping college campuses, the rise of Elvis Presley on the music charts, and Richard Nixon's first term as president, will welcome a new successor. This revelation sets an important milestone for Berkshire's future development path.
At 62 years old, Abel has been one of the frontrunners for succession since early 2018. At that time, Buffett and Munger jointly appointed him and another competitor, Ajit Jain, as vice chairmen and directors.
Since then, Abel has been fully responsible for all non-insurance businesses under Berkshire, covering two major sectors: railroads, aerospace, and the leading companies in the energy sector from which Abel hails, as well as a series of well-known consumer brands including Dairy Queen (DQ), Brooks Running, and Benjamin Moore paint.
This dazzling array of diversified businesses constitutes the largest non-financial balance sheet in the United States and contributes two-thirds of Berkshire's non-investment income. Meanwhile, 73-year-old Jain continues to oversee the insurance business segment.
At the same time, Buffett himself continues to personally manage a massive investment portfolio—valued at approximately $600 billion, this stock, bond, and cash combination has seen frequent changes in recent years—with the assistance of his two long-time aides, Ted Weschler and Todd Combs. Notably, these two aides have also been viewed as "dark horse" candidates for the CEO position.
02 About Investments in Japan
Abel's connection with Buffett began a quarter-century ago when Berkshire entered the energy sector. 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 vast transmission network, which has now become a crucial pillar of Buffett's business kingdom.
Today, the business under Abel generates annual revenues of about $270 billion—if considered separately, BHE could rank in the top ten of the Fortune 500 list, surpassing Microsoft and Chevron (Berkshire itself ranks fifth).
In the process of gradually gaining Buffett's trust, Abel has demonstrated three key traits akin to the "Oracle of Omaha": the gift of building trust, the insight to discover opportunities, and the wisdom to avoid risks.
As Buffett said in 2021: "There are many smart people in this world, but some smart people do many foolish things. Greg is a smart person, but he would never do something foolish."
Of course, the 94-year-old Buffett has not announced retirement plans, and his impressive performance at the 2024 shareholder meeting proves that his mind remains sharp.
However, it cannot be ignored that Berkshire's overall performance is no longer as brilliant as it once was. From 1965 to 2003, Berkshire's average annual return was as high as 19.8%, exceeding the S&P 500 index by nearly 10 percentage points each year. However, in the past decade, Berkshire's average annual return has been 11.6%, lower than the S&P 500 index's 13.2%.
"The only reason for the existence of a conglomerate is to outperform the S&P index," said Dave Cote, who led the diversified manufacturing giant Honeywell from 2002 to 2017.
For a long time, Buffett has successfully resisted the onslaught of activist investors attempting to "unlock value." Even after he steps down, Berkshire will still maintain a strong defensive system.
Although Buffett has donated more than half of his Berkshire shares to charity (mainly to the Bill and Melinda Gates Foundation) since 2006, he still controls over 30% of the voting rights.
Additionally, he modified his will (last Thanksgiving) to decide to donate almost all of his estate to a charitable trust managed by his three children, Howard, Peter, and Susan.
According to the will, this wealth will be distributed in batches to various charitable causes over the ten years following Buffett's death (including their own managed foundations).
Therefore, the large number of Berkshire shares held by this trust will effectively prevent potential threats from activist investors for many years to come. Meanwhile, Buffett has appointed Howard to succeed him as chairman, further solidifying Berkshire's defensive system.
However, as the A shares held by the trust convert to B shares for charity, external investors, including fund managers, ETFs, and individual shareholders, will gain increasing voting rights.
This transfer of power is likely to occur during Abel's tenure.
Although Berkshire's nearly trillion-dollar market value makes it difficult for private equity funds or industrial giants to orchestrate a complete takeover, the dilution of voting rights may invite disturbances from activist investors.
03 About Cash on Hand
In stark contrast to the globally renowned Buffett, little is known about Abel's background, personal style, and management philosophy.
Aside from attending one or two events with Buffett, he has never given interviews to business media, and his public appearances have mainly been limited to the last three Berkshire shareholder meetings—last year he took over the podium from the late Munger (who passed away at the end of 2023).
Berkshire Hathaway Energy declined Fortune magazine's request for an interview with Abel, but Buffett replied via email, stating: "I am extremely satisfied with Greg's performance. But I no longer accept interviews. At 94, not only has my speed in playing bridge slowed, but many other activities have gradually decreased or been completely canceled. However, I still enjoy it and can still do a few things well."
However, through interviews with those familiar with Abel, reflecting on his past personal experiences and management philosophies shared in public, as well as his actual performance at Berkshire, a clear image gradually emerges: he is a leader whose spiritual temperament closely resembles Buffett's, but is likely to carve out his own path.
Ultimately, for everyone concerned with Berkshire, there is only one real question: Warren Buffett has built the greatest wealth creation machine in Wall Street history. But after him, can even his personally chosen successor navigate this behemoth?
If it is said that Buffett's chosen successor possesses a down-to-earth and approachable quality, no one would be surprised. Those familiar with Abel say he has a Buffett-like demeanor, just lacking some of the boss's signature performance talent.
Abel grew up in Edmonton, a prairie city in Canada known as the "Oil Capital of Canada," famous for its cycles of economic boom and bust. His mother was a homemaker who also worked as a legal assistant, while his father sold fire extinguishers.
"People sometimes had jobs and sometimes were unemployed back then," Abel recalled in an interview with the Horatio Alger Association (an organization that provides scholarships to extremely impoverished students, of which Abel is a long-time supporter). "But family and close friends always gave you the strength to dream."
His first business venture involved riding his bike door-to-door delivering advertising flyers, earning 0.25 cents for each one.
As a child, Abel—who can be seen in photos with a messy Beatles-style haircut—later began collecting discarded soda bottles. He constantly sought better routes home to find more bottles along the way. After school, he could collect up to five bottles, and by the weekend, his room would be filled with 20 bottles, worth about $1.
In high school, he helped out at his father's company, filling fire extinguishers.
Young Abel's lifelong passion for hockey began in his hometown of Edmonton, a city known worldwide for its legendary Oilers star Wayne Gretzky.
His hockey education came from his uncle Sid Abel, a Hockey Hall of Famer who played for the Detroit Red Wings and Chicago Blackhawks for 14 seasons.
Little Greg trained on the ice every day until his parents called him for dinner; this rough sport taught him the true meaning of teamwork. "Playing hockey makes you understand that fighting for the team is far easier than going it alone," Abel said.
Until his mother Bev passed away at the end of 2022, he would call her every July 1st to analyze the Oilers' offseason acquisitions and mistakes in depth.
Abel's simple Midwestern values perfectly align with the urban character of Des Moines, where he currently resides (the headquarters of Berkshire Energy). He coaches his son's youth hockey team at the Abel Ice Arena, which he funded himself, located within the large sports complex RecPlex in Des Moines. This year, he stepped down from the head coach position to become an assistant coach to alleviate some pressure.
According to his friends in Des Moines, if you encounter Abel at the Iowa State Fair or the Calgary Stampede, you might think he is a local teacher or bank employee rather than someone about to take on one of the most important positions in American business.
"His approachability fits in any setting," said former Wells Fargo executive Mark Oman. "As a neighbor, he is the kind of person who is unassuming and down-to-earth, perfect for watching Oilers games or NFL football together."
Oman added that Abel has a great sense of humor. Last year, while they were watching the Olympics together, Abel joked that he finally found a competition he could win: "I could go compete in the Iowa State Curling Championship." He quipped that, after all, there is hardly any competition in the Hawkeye State for curling.
04 About Insurance and AI
Those who know him say Abel excels at building deep interpersonal relationships. "He can become friends with people upon first meeting," Oman described, "though not the extroverted type, he is 100% friendly. No one creates a party atmosphere better than Greg—not through exaggerated means, but by making personalized care for each guest enjoyable."
Even when busy, Abel is happy to offer selfless advice.
Larry Cunningham, a professor at the University of Delaware (author of several Buffett research books), remarked, "He possesses extraordinary wisdom, but the wonderful thing is that you never feel stupid or irrational in his presence. He always makes you feel refreshed."
Dawn Farrell, the current chair of Trans Mountain, a pipeline giant, formed a friendship with Abel through business collaboration and often seeks his advice: "If I need strong advice on business issues unrelated to him, he always takes the time to help me clarify my thoughts."
Former Honeywell CEO Dave Cote is particularly impressed by Abel's commitment to the Horatio Alger Association, which provides scholarships to extremely impoverished students, many of whom have suffered abuse, lived in cars with their mothers, or witnessed family members die due to drugs.
Abel served as the chair of the organization in 2018 and continues to play an important role on the executive committee.
"He has done a lot for these kids," Cote stated. Additionally, he believes Abel is not only passionate about philanthropy but also humble and sincere. "With his status, he could choose to be indifferent and keep his distance to protect himself. I've seen too many people with far less status act more high-handed."
Abel's ability to win in the competition for succession may stem from his gentle and outgoing personality, which is closest to Buffett—this similarity carries significant business advantages.
Of course, you won't see Abel dancing with the University of Nebraska cheerleaders, riding a bull through the streets of Omaha, or strumming "My Way" on a ukulele on The Today Show—these classic moments have forged Buffett's legendary image.
But Abel showcases "big personality charm" in his unique way: he confidently holds a microphone while weaving through the audience at the Berkshire annual meeting, explaining utility technology details in layman's terms; he inherits Buffett's genuine charm, which has helped the latter earn the trust of everyone from regulators to stubborn founders—those founders who would only entrust their life's work to someone they can trust.
Oman pointed out that Abel possesses a "massive information digestion ability." Business partners reveal that he can even "speed-read" balance sheets and income statements, quickly grasping key data.
Buffett is full of praise for his work enthusiasm, joking that "Greg discovered a time-space rift in Des Moines that gives him more than 48 hours a day."
Abel's profound understanding of business operations, especially regarding where every dollar flows, began during his studies at the University of Alberta. He initially focused on finance but later switched to accounting to better understand the relationship between balance sheets and cash flow statements.
After graduating in 1984, he joined the Edmonton office of PricewaterhouseCoopers (PWC). A few years later, he was sent to the San Francisco office for a short-term assignment.
In 1991, Abel became an auditor for CalEnergy, the second-largest geothermal power company in the U.S. This experience shaped his management philosophy and introduced him to key mentors in his career.
05 About Patient Investing and Decisive Swings
At that time, Buffett's childhood friend and Berkshire board member Walter Scott hoped to diversify his engineering company, Peter Kiewit Sons', by acquiring the debt-laden 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 waste-to-energy company in Omaha, which went public and made him a fortune.
Kiewit acquired a controlling interest in CalEnergy for $28 million, and Sokol immediately took office, appointing the 28-year-old Abel as the company's accountant.
The Kiewit culture profoundly influenced Abel's working style and negotiation tactics.
This company values a straightforward, no-frills work ethic: employees serve for life, moving around to participate in the construction of dams, bridges, and oil platforms.
Sokol became Abel's deal mentor, while the 20-year-older Scott set a leadership example for him.
In 2020 (the year before Scott's passing), Abel interviewed his former boss at a charity event in Omaha, guiding Scott to recall his childhood experiences of cutting grass with a scythe on the farm, sleeping in a work shed while surveying the Monticello Dam during summer breaks in college, and his journey through 18 jobs in 12 years.
Abel admitted that he loved visiting landmarks like the St. Lawrence Seaway and Garrison Dam, projects that Scott had fought for, which fascinated him. He listened with admiration as Scott recounted his memories, often exclaiming, "That's amazing, I love this story!"
David Wit, a technology entrepreneur and board member of CalEnergy, witnessed the operation of the triangle formed by Scott (the chairman), Sokol (the CEO), and Abel (the financial architect). He marveled at how this team dared to take risks in acquisitions while insisting on thoroughly understanding the financial data of targets and predicting potential risks before taking action.
"Scott had a unique vision," Wit told Fortune, "Greg combines approachability with sharpness: humble, hardworking, and devoid of elitist arrogance, but more importantly, he truly understands the numbers."
During this period, CalEnergy began a series of acquisitions, including a British utility company, which Abel successfully transformed into a profit machine.
This achievement earned Scott's high praise, and he recommended Abel's talents to his friend Warren Buffett.
Subsequently, they also acquired a major power supplier and renamed the company MidAmerican.
However, during the energy market frenzy at the end of the 1990s, utilities were still considered a niche—investors were eager to pay high premiums for companies like Enron, AES, and Calpine, as these companies continuously acquired transmission networks, power plants, pipelines, and utility assets to cater to the fully deregulated energy market.
In contrast, MidAmerican focused on acquiring regulated assets that were overlooked by the frenzy; its monopoly position and stable customer base were precisely what emerging companies lacked.
Scott keenly realized that these "cash cow" assets were exactly what Buffett craved.
In a 2002 interview with Fortune, Buffett recalled that Scott, who had left Kiewit to lead the fiber optics company Level 3, flew from Omaha to Carmel, California, to persuade him to acquire MidAmerican at a family dinner at Buffett's sister's house.
"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 were uninterested because they were more focused on fast-paced, frequently merging companies like AES and Calpine," Buffett recalled.
Scott asked Buffett if he would be willing to work with him, Sokol, and Abel's team to take MidAmerican private.
Buffett, who has always favored contrarian investing, was thrilled by this idea. In October 1999, Berkshire announced the acquisition of a controlling interest in MidAmerican, with Scott joining as a minority shareholder.
As the energy market's full deregulation turned into a crisis, MidAmerican quickly became a "quality buyer" during major corporate asset disposals.
In 2002, Williams Companies sold the Kern River gas pipeline to MidAmerican for $960 million; this pipeline connects the Rocky Mountains, Las Vegas, and California, and the price was several hundred million dollars lower than its valuation two years prior.
In the 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 to the upstream regions of the Midwest. The price of this deal was about $600 million less than what Dynegy had paid to acquire it from Enron a few months earlier.
According to Sevor's report, Buffett was "as excited as if he had just caught a giant tuna" when recounting these achievements.
06 About Dollar Depreciation
Since 2007, Buffett began sending Sokol to restructure Berkshire's troubled subsidiaries, taking over insulation manufacturer Johns Manville and private jet operator NetJets.
The following year, Abel was promoted to CEO of MidAmerican Energy.
Sokol's outstanding performance as a "firefighter" led many investors to believe he was the most promising candidate for CEO succession. However, in 2011, Sokol abruptly resigned after being questioned about purchasing stock in Lubrizol just before recommending its acquisition to Buffett (Berkshire later completed the acquisition of Lubrizol). Fortune magazine attempted to contact Sokol via email but received no response.
After Sokol's departure, Abel's promotion became a foregone conclusion.
After taking charge of the energy sector, he continued the strong profit growth momentum, skillfully using Berkshire's robust balance sheet to acquire assets at low prices, channeling all cash flow into business expansion, creating the compounding miracles that Buffett cherishes.
In 1997, CalEnergy reported revenues of $2.3 billion and profits of $139 million; by 2022, Berkshire Energy (BHE) saw revenues soar to $26.4 billion, with profits reaching $3.9 billion.
Abel also avoided a potential public relations crisis for Berkshire regarding environmental issues through a visionary negotiation, further solidifying the company's image among environmentalists and regulators.
At that time, hydroelectric dams along the Klamath River in Oregon and Northern California were damaging the fishing resources of Indian tribes. Abel facilitated an agreement through patient and flexible negotiations: MidAmerican Energy would close these dams, provided they could continue operating for a period to recoup some investments, while covering demolition costs through state-issued bonds and a slight increase in electricity prices.
This historically largest dam removal project was completed earlier this year, and the Klamath River has now been restored to free flow, expected to soon yield new fishing harvests benefiting local indigenous tribes.
In a video interview in 2015, Abel summarized his negotiation style: "The key is, how do you get the other party involved? How do 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 a significant driver of green energy infrastructure development in the U.S.
Under his leadership, Berkshire made significant strides in the solar sector and became the largest regulated wind power utility company in the U.S., operating numerous wind farms in Texas, California, and the Midwest (especially Iowa).
At the Berkshire annual shareholder meeting in May 2024, Abel announced that just weeks earlier, on Earth Day, strong winds had powered wind turbines to meet the entire electricity demand of over 800,000 Iowa customers served by MidAmerican Energy. (In mid-2022, Berkshire acquired an 8% stake in BHE held by the Scott family and Abel for $8.7 billion, with Abel cashing out 1% for $870 million.)
In the manufacturing, services, and retail sectors (valued at $165 billion, covering dozens of subsidiaries including NetJets, Benjamin Moore, and Clayton Homes, excluding rail and energy businesses), Abel also brought significant improvements, raising the operating profit margin from 4.9% in 2017 to 7.6% in 2023.
Unlike Buffett's "hands-off management," Abel is hands-on and does not tolerate underperformance.
Jim Weber, former CEO of Brooks Running Shoes, revealed that Abel visits the company's Seattle headquarters several times a year to discuss corporate strategy with management. "If your performance is lacking, he will tell you directly and give you a few months to adjust," Weber stated in an interview at the 2021 Berkshire annual shareholder meeting.
Larry Cunningham also mentioned in an interview, "Greg won't let underperformers continue to lag behind. If you are not performing well, you will get a call from him."
Buffett himself admitted in a 2023 interview with CNBC, "Greg may be even tougher than I am on execution. He can leave with a smile after executing, and the people being executed can feel good about it."
07 About the Efficiency Department's Work
From the outside, Abel seems poised to take over a stable and well-managed business empire, but in reality, Berkshire faces numerous challenges.
The overall performance in recent years has been decent, but there has been a noticeable decline compared to past glories. Some once-thriving subsidiaries are currently underperforming:
The auto insurance giant GEICO is far behind competitor Progressive in using connected car technology to price risks, leading to a loss of market share;
BHE's profits have declined due to wildfire compensation from their peak in 2022;
The railway company BNSF ranks last among the five major railroads in the U.S. in terms of returns over the past two years, and Buffett has publicly stated that BNSF urgently needs a "major restructuring of its cost structure."
Buffett himself has acknowledged that some of Berkshire's businesses have underperformed for a long time and that there are some "dragging" business segments.
Faced with these challenges, how Abel will respond and whether he can continue Buffett's legacy is not only crucial for Berkshire's future but also for Wall Street's confidence in this "wealth machine."
Abel could boost performance through a three-pronged approach and revitalize underperforming businesses. However, these measures will inevitably impact Berkshire's long-standing competitive advantage—namely, the high degree of independence of its subsidiaries, which is the core of Berkshire's business ecosystem.
In the traditional model, Berkshire acquires quality companies at reasonable prices and grants them full autonomy; this "non-interventionism" allows it to act as the "last buyer" in times of crisis. Investment manager Adam Mead, who has authored authoritative works on Berkshire's financial history, believes this is Berkshire's key competitive advantage.
Strategy 1: Set Profit Targets and Replace CEOs if Necessary
Buffett rarely sets profit targets for subsidiary CEOs and would not directly replace management due to poor performance. However, Abel may challenge this practice.
"He will pressure us like any good manager would," said Troy Bader, CEO of Dairy Queen (DQ).
Recently, Abel's management style has been evident; he dispatched Adam Wright, a 47-year-old executive who successfully managed MidAmerican Energy, to take over the management of Pilot Travel Centers, the largest truck service center chain in the U.S.
Wright, a former NFL running back, has been praised by Buffett as an "outstanding executive." Currently, Wright has begun renovating outdated convenience stores and optimizing the company's financial situation.
Strategy 2: Establish an Operations Management Team
This structure is unprecedented in Berkshire's history but may become necessary.
It should be noted that Abel will receive substantial support—experienced Ajit Jain continues to lead the insurance business; he can also rely on Todd Combs and Ted Weschler for managing the massive stock and bond investment portfolios.
Legendary CEO coach Ram Charan pointed out, "Greg cannot personally manage 80 subsidiaries." David Kass, a professor at the University of Maryland, believes Abel can categorize non-insurance businesses by industry, with each group consisting of about 20 companies managed by dedicated personnel.
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 various factories.
In contrast, Berkshire's current synergies mainly manifest at the financial level, such as the headquarters providing financing to Clayton Homes at rates lower than those of banks or bond markets.
As Mead pointed out, Berkshire has not integrated at the procurement level, for example, not encouraging its companies to jointly procure aluminum or semiconductors, nor promoting cross-selling of GEICO insurance.
Buffett has acknowledged that as Berkshire's scale has expanded, the company can no longer replicate the super-high returns of the past 40 years.
However, he believes Berkshire still has the potential to outperform the S&P 500 by 1 to 2 percentage points. The most likely scenario is that Abel will largely continue the fundamental formula that has led Berkshire to success:
In times of crisis, act as the "last buyer" with the ability to write multi-billion dollar checks;
Increase equity investments when the stock market is down and timely reduce holdings when valuations are high;
Actively repurchase shares when the company's market value is below its intrinsic value.
As for what Berkshire's true "intrinsic value" is—perhaps, aside from Buffett himself, no one is closer to the correct answer than Greg Abel.
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