Abel reversed Buffett's two biggest convictions in six months

Abel reversed Buffett's two biggest convictions in six months

Dana Sullivan Kilroy

Wed, September 9, 2026 at 8:17 PM GMT+3 5 min read

• BRK-B +0.63%

Warren Buffett spent his final stretch as Berkshire Hathaway's chief executive building the largest corporate cash reserve in American history.

He sold more stock than he bought for 14 consecutive quarters and effectively froze share repurchases across his final six, CNBC reported.

By the time he handed the role to Greg Abel on January 1, 2026, Berkshire's cash pile stood at $373.3 billion, a CNBC interview with Greg confirmed.

Three months into Abel's tenure, that reserve climbed to a record $397.4 billion at the end of the first quarter of 2026, according to Berkshire's 10-Q filing.

Six months into the job, Abel has reversed both positions. Berkshire became a net buyer of equities in the second quarter for the first time in more than three years, with buybacks also surging to $4.5 billion.

That brought cash reserves down $32 billion in 90 days, to $365.5 billion by the end of June 2026.

Berkshire's $32 billion spending quarter under Abel

Abel deployed capital across three major channels during the second quarter. Berkshire purchased roughly $23.5 billion in gross equity securities while selling $3.7 billion, producing nearly $20 billion in net purchases, CNBC reported.

A significant portion of that equity capital went to Alphabet, where Abel executed a $10 billion private placement during June 2026.

The investment vaulted Google's parent company into Berkshire's five largest equity holdings alongside American Express, Apple, Bank of America, and Coca-Cola.

Warren Buffett, Chairman of Berkshire Hathaway, told CNBC in a July 2026 interview that he personally drove the decision to build the Alphabet position, clarifying for the first time who was behind one of Berkshire's largest technology bets.

I initiated it. I am not doing anything that he doesn't approve of. He's not doing anything I don't approve of. We talk all the time, but he is the decider

The second quarter also included Berkshire's May 31, 2026, announcement of its $6.8 billion acquisition of homebuilder Taylor Morrison at $72.50 per share.

That price tag represented a 24% premium to Taylor Morrison's closing price before the deal was disclosed.

Abel put his personal capital behind the strategy

The corporate spending is only half the story; Abel also signaled a clear break from Berkshire's late-era caution under Buffett's leadership.

In March 2026, regulatory filings confirmed that Abel personally purchased 21 Class A shares at approximately $730,000 each, CNBC reported.

That $15.3 million purchase represented Abel's entire after-tax salary for 2026, and he committed publicly to repeating the purchase annually.

More Berkshire Hathaway:

In his first shareholder letter, Abel set a 20-year benchmark for Berkshire's progress, a timeline that could direct tens of millions in personal capital into company shares through annual purchases.

"It's great to see more economic alignment with shareholders after the announcement from Greg about future stock purchases," Macrae Sykes, a portfolio manager at Gabelli Equity Trust, told CNBC.

The commitment converts Abel's compensation into a rolling bet on Berkshire's intrinsic value.

A one-time insider buy can reflect tax planning or a board expectation. An open-ended annual commitment is a different signal, it ties a CEO's personal wealth to the same outcome shareholders are underwriting.

Michael Burry warns that Abel abandoned Buffett's discipline

Not every prominent investor views the new spending pace as evidence of sound capital allocation in an expensive market environment.

Michael Burry, an American Investor and the Hedge Fund Manager who predicted the 2008 housing crash, posted on Substack on August 10, 2026, that his "biggest fear" for Berkshire had come true: that Buffett's successor "would not have his patience for the fat pitch."

"I do not find Berkshire an attractive investment going forward," Burry said.

Paul Lountzis, president of Lountzis Asset Management, told The Wall Street Journal, "It is very hard to want Greg to be making big deals" at current valuations.

He added that public markets look "kind of silly," suggesting the timing of Abel's purchases could be a concern.

Bill Stone, Chief Investment Officer and Managing Principal at The Glenview Trust Company, rejected the criticism that Abel moved too fast.

The quarterly results reflected Abel "actively putting Buffett's cash hoard to work while maintaining Berkshire's long-standing discipline around capital allocation," Stone wrote in a Forbes column on August 8, 2026.

Berkshire's operating results backed Abel's capital deployment

Operating earnings climbed 16% year over year to $12.98 billion, while net income more than doubled to $25.67 billion, CNBC reported.

Strong performance in Berkshire's energy, railroad, and manufacturing units more than offset weakness in the insurance business, where underwriting profits fell 13%, and investment income fell 9%.

Brian Meredith, UBS Managing Director, called Berkshire's cash deployment "meaningful" and maintained a buy rating, according to a report by Reuters.

Shares rose as much as 3.3% on the following trading session, reaching their highest level since Buffett announced his departure in May 2025.

Where this leaves Berkshire investors

Meyer Shields, Managing Director at Keefe, Bruyette and Woods, told Reuters that the aggregate pace of spending matters less than the quality of each allocation decision.

That framework applies to both sides of the succession divide. Buffett's final stretch proved that discipline can look like inaction: 14 quarters of net selling and a cash pile that grew past $397 billion while markets kept climbing.

Abel's first two quarters proved that discipline can also look like deployment, $32 billion committed to positions he judged worth owning at today's prices.

The 13-F filing due in early November 2026 will show whether Abel kept buying or pulled back, but the longer test is whether his entry points hold over the next five to ten years.

That's the window where Berkshire's own returns will start separating Buffett's patience from Abel's conviction in real dollars.

Related: Warren Buffett and Greg Abel have a $175B warning for Wall Street

This story was originally published by TheStreet on Sep 9, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.