Buffett Passes Baton to Abel, Calls Record Cash Pile a ‘Necessary Evil’

SYDNEY, 21 January 2026 – In his first major interview since stepping down as chief executive, legendary investor Warren Buffett, 95, has expressed unwavering confidence in his successor while defending Berkshire Hathaway’s unprecedented cash reserves, now exceeding US$380 billion (A$570 billion). The two-hour CNBC special, featuring previously unaired footage, offered a candid glimpse into the billionaire’s thoughts on legacy, luck, and the disciplined patience that defined his six-decade reign.

The Seamless Transition

Buffett officially handed the CEO role to Greg Abel on 1 January 2026, ending a 61-year tenure that built a struggling textile mill into a trillion-dollar conglomerate. He described the move as devoid of emotion, a long-planned event. “From the moment I bought [Berkshire], I knew I wasn’t going to run it into eternity,” Buffett said. He remains as chairman, assuring shareholders that “everything will remain just about the same.” He lavished praise on Abel, a seasoned operations manager, stating he would “rather have Greg manage my money than any of the top investment advisers or the most renowned CEOs in the U.S.”

The Mountain of Cash

A central theme was Berkshire’s colossal cash position, which swelled following significant sales of Apple and Bank of America shares. Buffett likened liquidity to “oxygen” – essential but not a productive asset. “I’d rather have $100 billion in a really good business bought at a sensible price than have $100 billion in cash,” he stated, acknowledging that 2025 yielded no “elephant-sized” opportunities attractive enough to deploy capital at scale. This conservative stance signals his view that current market valuations, particularly in technology, offer limited margin of safety.

Buffett’s Investment Wisdom for the Australian Investor

Even as Buffett steps back, his core principles remain a guide. For Australians, especially those building wealth later in life, his playbook emphasises long-term focus, quality businesses, and consistency. “Time in the market is far more important than timing the market,” he has often said. He advocates for investing in companies with durable competitive advantages – or “economic moats” – and buying them when they are temporarily out of favour.

Berkshire Hathaway at a Glance

Frequently Asked Questions

Why did Warren Buffett sell so much Apple stock?

Buffett has been trimming Berkshire’s massive Apple stake for several quarters, a move analysts attribute to locking in profits, managing portfolio concentration risk, and a tactical response to the stock’s elevated valuation. He has not criticised Apple’s business fundamentals.

Will Berkshire Hathaway start paying a dividend under Greg Abel?

This is a key question for investors. Buffett has historically avoided dividends, preferring to reinvest all profits. However, with the cash pile growing and shareholder pressure likely to mount post-Buffett, many analysts believe initiating a dividend by the end of 2026 is a strong possibility under Abel’s leadership.

What are the biggest challenges facing the new CEO?

Greg Abel’s immediate tests are twofold: firstly, deploying Berkshire’s enormous cash reserves into acquisitions or investments that can move the needle for the trillion-dollar company; and secondly, stepping out of Buffett’s long shadow to establish his own leadership while preserving the unique culture that made Berkshire successful.

Can Australian investors still apply Buffett’s lessons today?

Absolutely. While the scale is different, the principles are timeless. For ASX investors, this means focusing on high-quality companies with strong moats (e.g., CSL, WiseTech), maintaining a long-term horizon, investing consistently, and having the patience to wait for attractive prices rather than chasing market euphoria.