Business history shows that well-managed successions, such as Apple’s under Tim Cook, can keep companies on track even after their founders have left.
Tax considerations also play a crucial role. Keeping our stocks in a taxable account has its advantages, especially given the low likelihood of dividends under Buffett’s management.
August 30th is approaching, and with it, Questions about Berkshire Hathaway’s future once Warren Buffett is no longer at the helm. This year takes on special relevance after the death of Charlie Munger last year and the appointment of Greg Abel as CEO pending.
And it is that investors of Berkshire are at a crossroads, “hold or sell” when Buffett is no longer active. One point that analysts are arguing for in favor of holding is that Greg Abel seems largely unlikely to alter the formula that has worked. Paradoxically, while Berkshire’s golden days as a standout investment may be over, its solid track record under Buffett remains impressive over the long term.
Berkshire has delivered an impressive 4,384,748% return since Buffett took over in 1965, beating the S&P 500 by 140 times. Since 2016, however, the comparative performance with the S&P 500 has dimmed, showing a modest 214% increase versus 232% for Vanguard’s S&P 500 index fund, including reinvested dividends.
Despite this, analysts are optimistic for Berkshire’s future under Abel. His long track record within Berkshire and the continuity he represents suggest a stable management aligned with Buffett’s vision.
Warren Buffett and Berkshire
In addition, Berkshire, with its diversified portfolio that includes stakes in giants such as Apple, Coca-Cola and American Express are increasingly resembling index funds in their own right. This diversified and conservative approach could be an asset during any leadership transition.
Tax consideration also plays a crucial role. Keeping stocks in a taxable account has its advantages, especially given the low likelihood of dividends under Buffett’s direction.
Warren Buffett 3.jpg
In conclusion, business history shows that well-managed successions, such as Apple’s under Tim Cook, can keep companies on track even after the departure of their founders. With this perspective, one investment strategy could be to maintain investments in Berkshire and see how it evolves after Buffett. Who knows, if the stock falls significantly after his departure, it could be an opportunity to increase the stake.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
