Warren Buffett Watch: It’s Buffett, not Abel, who appears to be calling the shots on stocks

The recent quarterly disclosure of Berkshire Hathaway’s equity portfolio has sent shockwaves through financial circles. Some speculate that Greg Abel, the company’s new CEO, is finally making his mark. However, a closer examination of the data reveals that Warren Buffett remains firmly in control.

Warren Buffett initiated investments and guided Berkshire’s stock choices as he approaches his 96th birthday. The notion that Abel has been quietly assuming leadership on stock picks is an appealing one, but Barron’s Andrew Bary convincingly argues that this narrative is overly simplistic. While Abel gave a “rapid signoff” to the $10 billion purchase of Alphabet shares from Goldman Sachs, it is unlikely he did so without Buffett’s approval.

The fact that Buffett initiated Berkshire’s investment in Alphabet, as revealed in his CNBC interview last month, suggests that Abel is not yet making significant decisions on his own. This is further supported by Ted Weschler’s involvement in the second-largest purchase of Q2, Delta Air Lines. Weschler’s expertise in stock picking has been a key factor in Berkshire’s success.

Abel’s lack of formal portfolio management experience and his preoccupation with running Berkshire’s operating companies and searching for new acquisition targets are also telling indicators of who is truly calling the shots. The $6.8 billion acquisition of Taylor Morrison Home demonstrates Abel’s focus on expanding Berkshire’s real estate holdings.

The Alphabet-Delta Air Lines tug-of-war in Berkshire’s equity portfolio highlights the complexities of stock market fluctuations and underscores Buffett’s continued role in navigating Berkshire’s investments. While Alphabet shares have since dropped 3.5%, Coca-Cola has rallied by 12.1%, temporarily displacing Google’s parent as the third-largest holding.

The recent antitrust settlement involving HomeServices of America and the National Association of Realtors also bears scrutiny, particularly in light of Buffett’s influence over Berkshire’s business dealings. The $250 million payout to resolve claims that long-standing real estate commission rules kept them artificially high has sparked controversy among some plaintiffs who feel they were short-changed.

This case serves as a reminder of the delicate balance between corporate interests and regulatory oversight. As investors, analysts, and industry observers continue to grapple with the implications of Buffett’s continued leadership, it is essential to recognize that his legacy extends far beyond Berkshire Hathaway.

The Warren Buffett Watch newsletter’s coverage of this story provides valuable insights into the intricate workings of the financial world and serves as a testament to Buffett’s enduring impact on corporate America. His commitment to long-term investing, willingness to challenge conventional wisdom, and dedication to building a robust and resilient portfolio have made him an icon in the world of finance.

As investors navigate the complexities of the stock market, they would do well to heed Buffett’s timeless advice: “We look at what the market says is the utility.”