Greg Abel Is Spending Berkshire Hathaway's Cash on Whole Companies Instead of Stocks. Here's What That Changes for Shareholders.
2026-08-03 05:15
•Jennifer Saibil •The Motley Fool
••••• •••••••••• Axe Cap view
Berkshire’s New CEO Bets on Whole Businesses, Not Stocks
Greg Abel is steering Berkshire Hathaway towards buying entire companies, shifting away from stock market plays.
Greg Abel’s strategy is a throwback to Warren Buffett’s early days but with a sharper focus on owning whole businesses, not just slices via stocks. With nearly $400 billion of cash, Abel has spent a fraction on public equities, preferring deals like Taylor Morrison and the recent OxyChem acquisition. This signals a belief that true value lies in operational control, especially when stock markets feel overheated—a sentiment that resonates in South Africa where many JSE stocks, especially industrials, look similarly pricey by historical standards. For South African investors, this is a reminder that sometimes owning a piece of a quality business outright can beat buying highly valued shares. That said, Abel’s approach depends heavily on finding prices low enough to justify the huge outlay and managing the acquired companies well, a tall order in uncertain times. If markets dip or companies underperform, shareholders could see slower returns. this is just our opinion and not financial advice
Watch and wait on large JSE industrial stocks for better entry points, while considering steady cash flow businesses like Shoprite or Woolworths which echo Berkshire’s preference for operational control. Stay cautious on purely growth-driven shares until valuations normalize.
- JSE Industrials
- Shoprite
- Woolworths
- USD/ZAR
- High acquisition prices limit returns
- Operational challenges in acquired companies
7/10
Greg Abel, Berkshire Hathaway's new CEO, is shifting the company's investment strategy toward acquiring whole businesses rather than stocks. With nearly $400 billion in cash, Abel has spent less than $3 billion on stock purchases while acquiring Taylor Morrison for $6.8 billion and completing the OxyChem purchase for $9.7 billion. This approach reflects Abel's preference for long-term operational control over portfolio trading, as he finds greater value in whole companies than in the current richly-valued stock market.
Our take is based on reporting first published by The Motley Fool.