On Saturday, February 22, 94-year-old Warren Buffett officially confirmed in his annual shareholder letter that Berkshire Hathaway's CEO position will be replaced by his long-trained deputy, Greg Abel.This letter, which is regarded by global investors as the "Bible of Value Investment", not only ends the successor speculation that has lasted for more than a decade, but also reveals the strategic transformation logic of this trillion-dollar asset management giant-with cash reserves reaching a record high of 334.2 billion U.S. dollars, Buffett still emphasizes the allocation philosophy of stocks over cash, and Abel's appearance may reshape Berkshire's capital narrative for the next decade.InvalidParameterValue

The dust settled on the successor: Abel's "vote of confidence" and Berkshire's governance resilience

Abel's succession was not a hasty decision.Since Charlie Munger "accidentally" leaked his candidacy in 2021, the low-key Canadian executive has gradually won the trust of shareholders by increasing his holdings of Berkshire shares (with a personal stake value of US$105 million) and leading core businesses such as energy and railways.In his letter, Buffett rarely compared Abel with Munger, saying that he "showed similar sensitivity to Charlie's when selecting stock opportunities." He specifically mentioned Abel's deep participation in investments in Japan's top five trading companies, implying that it has a vision for global capital allocation.Behind this appointment is a shift in Berkshire's governance structure from "personal heroism" to "institutionalized inheritance"-even though Buffett still emphasizes that he "enjoys his job", the shareholder letter made it clear for the first time that "the handover will come soon", which means that the transition of power has entered the countdown.InvalidParameterValue

Performance resilience: Insurance business flag-bearer and cash paradox

In 2024, Berkshire's operating profit will increase by 26.7% year-on-year to US$47.4 billion, far exceeding market expectations.The core engine of this growth is not the traditional perception of equity investment, but the strong return of the insurance business: GEICO turned a profit under Todd Combs 'reforms, and property accident insurance pricing strengthened due to rising climate risks, pushing the insurance float to exceed US$164 billion.It is worth noting that although cash reserves surged year-on-year to US$334.2 billion (equivalent to the market value of Coca-Cola), Buffett still insists on the stance of "stocks are better than cash" and even compares cash to "fragile assets when faced with the risk of fiscal recklessness."This seemingly contradictory strategy actually implies confidence in the long-term value of U.S. stocks-even though Berkshire sold a net US$134 billion in shares last year (including reducing its 67% position in Apple), its reinvestment in holding companies (such as railways and utilities) and the increase in holdings by Japanese trading companies still show a "foot-voting"-style structural optimization.InvalidParameterValue

Eastern bet: Japanese trading companies '"Berkshire mirror image" and geographical arbitrage

Japan has become the biggest highlight of Berkshire's overseas layout.Since establishing positions in the five major trading companies (Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo) at a cost of US$13.8 billion in 2019, the market value of these companies has expanded to US$23.5 billion, and Buffett has made it clear that "further holdings may be increased in the future."The beauty of this investment lies in the triple arbitrage: first, the diversified shareholding model of the trading company is highly coordinated with Berkshire itself; second, in the context of yen depreciation, the exchange rate hedging strategy of financing the purchase of shares through the issuance of yen bonds will make dividend income in 2024 (US$812 million) far exceeds interest costs (US$135 million); third, the culture of "conservative compensation + high shareholder returns" among trading company management coincides with Buffett's aversion to "Wall Street radicalism."InvalidParameterValue

Tax narrative: Criticism of the "American miracle" behind $26.8 billion

Buffett proudly announced in his letter that Berkshire paid US$26.8 billion in federal income taxes in 2024, accounting for 5% of the U.S. corporate tax, and the cumulative historical tax payment exceeded US$101 billion.The symbolic significance of this figure is far greater than the financial impact-it is both a verification of Berkshire's "no dividend + reinvestment" model and a subtle warning to U.S. fiscal policy.Buffett warned that "if fiscal recklessness becomes the norm, the value of paper money will evaporate" and that equity is the ultimate weapon against currency devaluation.This narrative that deeply binds the destiny of the company to the national economy not only strengthens Berkshire's image of "patriotic capital", but also sets the tone of "staying away from the local and deeply cultivating value" for the Abel era.InvalidParameterValue

Farewell to "Capitalists 'Woodstock": The symbolic change of shareholders' meetings

For the first time, Berkshire's shareholders 'meeting in 2025 will be led by Abel, and the process will be greatly streamlined: entertainment clips will be cancelled and the Q & A session will be shortened to 5 hours.This change may seem trivial, but it actually marks the transition from "Buffett's personal charisma driven" to "institutionalized operations."At the same time, Buffett rarely recalled his late partner Munger in nearly a thousand words in his letter, calling him "Berkshire's architect" and himself just "the general contractor implementing his vision."This kind of rhetoric with a sense of inheritance is not only a tribute to the past, but also a prelude to the future. When Abel stood on the podium in Omaha, what he needed to prove was not only his investment ability, but also how to "de-Buffett" to maintain the cultural soul of this business empire.InvalidParameterValue