The Buffett era is officially over.

Now the real test begins.

This weekend, Berkshire Hathaway held its first ever annual shareholder meeting in Omaha without Warren Buffett running the show.

Instead, Greg Abel took the stage as CEO and walked investors through the business.

That might not sound like a big deal.

But it is.

Because for 60 years, Berkshire’s returns were driven by one man.

Now he’s not there.

And that changes the way you should think about Berkshire Hathaway.

Here’s What You Need to Know About Greg Abel

While insiders have long known Abel as Buffett’s heir apparent, many investors are still asking: Who is this guy?

Greg Abel, 63, is a Canadian-born executive who built his reputation running Berkshire’s energy business.

He joined the company in 1999 and steadily worked his way up, eventually becoming CEO of Berkshire Hathaway Energy – one of the largest utility businesses in the U.S.

In 2018, Buffett put him in charge of all non-insurance operations.

That means Abel already oversaw a huge portion of the company, including railroads, energy, manufacturing, and retail.

He’s also been involved in Berkshire’s investments in Japanese trading companies – long-term bets Buffett has praised.

Like Buffett, Abel isn’t flashy.

Unlike Buffett, he’s not a stock picker.

Instead, he’s an operator.

That’s the key shift from Buffett.

Berkshire Is Shifting Toward an Operating Company

Historically, a large portion of Berkshire’s outperformance came from its investment portfolio, not its wholly owned businesses.

But again, Abel is more of an operator than an investor.

So instead of talking about stock picks or big investment ideas, Abel spent most of the meeting walking through how Berkshire’s businesses actually run — railroads, utilities, insurance, and retail.

His focus is very much on efficiently running the businesses Berkshire already owns versus searching for the next big compounding stock like Apple or Coca-Cola.

That’s a different way to drive returns.

Operating great businesses tends to produce steady cash flow, while great investments are what drive outsized gains.

If Berkshire leans more into operations, you may get more consistency…

But it could also mean lower long-term returns.

AI Is a Tailwind – Even for Berkshire

This was one of the biggest changes from the Buffett era.

Abel didn’t avoid talking about AI. He leaned into it.

But not in a hype-driven way.

He talked about how it actually helps Berkshire’s businesses.

For example:

• AI can make railroads run more efficiently.

• It can improve operations across the company.

• And most importantly, it’s a huge source of demand for energy.

That last point is huge.

AI requires data centers. Data centers require power.

And Berkshire owns one of the largest utility networks in the country.

So instead of trying to guess which AI company will win, Berkshire is positioned to benefit either way.

Berkshire’s Cash Pile Grew to $397 Billion

Berkshire has been a net seller of stocks for 14 straight quarters.

Just last quarter, they sold about $8 billion more in stocks than they bought.

At the same time, the business itself is doing well.

Operating earnings increased, helped by strong results in insurance.

So this isn’t a company that’s struggling.

They’re just being patient because they haven’t found anything worth buying.

That’s always been the Berkshire approach.

Berkshire waits for:

• Market crashes

• Distressed sellers

• Once-in-a-decade opportunities

That’s how Buffett made some of his best deals and Abel says he’s sticking to that same approach.

So for now, they’re sitting on a huge war chest, waiting for the right moment.

The Real Risk Nobody’s Talking About

For years, Berkshire traded at a premium to its underlying assets.

Investors were willing to pay up because Warren Buffett was running the show.

Now he’s retired and investors are starting to notice.

Since Buffett announced his retirement, BRK.B stock is actually down 5% while the S&P 500 is up 28%.

This raises a simple question: Does Berkshire still deserve that same premium without Buffett?

Layer this on top of the fact that Abel is more the “operator” type versus an investor.

Sure, Berkshire’s portfolio of railroads, energy companies, and manufacturers are solid businesses that generate cash.

But historically, they haven’t produced the same kind of returns as Berkshire’s stock portfolio.

If more capital goes into these slower, capital-heavy operations, returns could drift lower over time.

And if returns come down, the stock usually follows.

Here’s The Bottom Line

The good news is that nothing broke this weekend.

Something important did change, however.

Berkshire Hathaway is no longer being driven by a once-in-a-generation investor.

It’s now being run by a disciplined operator.

That doesn’t make it worse.

But it does make Berkshire a very different company today than when Buffett was at the helm.

And as an investor, that’s a shift you need to understand.