Missing Hathaway? Why Berkshire's Below-$500 Class B Shares Deserve Your Attention During Leadership Transition

A Generational Shift, But the Foundation Remains Solid

For nearly 60 years, Warren Buffett built Berkshire Hathaway into an investment powerhouse that consistently outperformed the S&P 500. Now, as Buffett steps down as CEO—though remaining as chairman—the market is wrestling with the natural question: can Greg Abel, his handpicked successor, maintain this legacy?

It’s tempting to miss Hathaway’s Buffett era. The Oracle of Omaha became synonymous with the company’s success, and his departure marks the end of an investment dynasty. However, those missing Hathaway under Buffett’s direct leadership may be overlooking a critical opportunity. Berkshire isn’t facing a crisis—it’s entering a transition with unprecedented strength.

Abel, who joined Berkshire in 1999 and has spent decades learning from Buffett directly, now takes the helm of a company in exceptional financial condition. Buffett’s final act as CEO may have been ensuring that his successor inherits a fortress.

The Powerhouse Behind the Curtain

Before you decide whether to buy Class B shares below $500, understand what you’re actually purchasing: a conglomerate with durable competitive advantages.

Insurance Operations as the Engine: Berkshire’s insurance business generated $22.6 billion in earnings during 2024—a figure that showcases the scale and profitability of this core operation. The insurance float, which amounts to money collected from policyholders but not yet deployed in claims, provides Berkshire with a unique advantage: essentially interest-free capital to deploy across markets.

Diversified Business Portfolio: Beyond insurance, Berkshire operates several large-scale businesses including:

• Burlington Northern Santa Fe Railroad, a critical infrastructure asset
• Berkshire Hathaway Energy, a utility with stable, predictable cash flows
• Manufacturing, services, and retail operations across multiple sectors

A Massive Equity Arsenal: Berkshire’s investment portfolio exceeds $300 billion, with significant positions in blue-chip companies like Apple, American Express, Bank of America, Chevron, and Coca-Cola. These holdings reflect both Buffett’s and Abel’s commitment to quality assets.

War Chest for Opportunity: Perhaps most remarkably, Berkshire sits on $377 billion in cash, equivalents, and short-term Treasury bills as of Q3 2025. This isn’t hoarding—it’s strategic positioning. Many analysts believe Buffett deliberately built this cushion to give Abel ammunition during the CEO transition and market adjustments.

The Valuation Question: Discount or Fair Price?

As of early January 2026, Class B shares trade around $497. At this price, Berkshire trades at approximately 185% of tangible book value (TBV)—a standard metric for valuing insurance and financial stocks.

Here’s the key insight: over the past decade, Berkshire averaged a 196% TBV multiple. Trading at 185% represents a modest discount to historical averages, suggesting the market is pricing in some uncertainty around the leadership transition.

The question becomes: is this caution justified, or is it an overreaction?

Why the Transition Isn’t the Catastrophe Many Fear

Yes, Buffett’s departure will change investor sentiment—at least temporarily. Todd Combs’ departure from his role overseeing 10% of the equities portfolio and leading GEICO adds to the uncertainty. These leadership shifts are real.

But consider the countervailing factors:

Proven Management Bench Strength: Abel and the remaining leadership team have worked alongside Buffett for decades. They haven’t just studied his approach—they’ve lived it. Buffett’s selection of Abel wasn’t a hasty decision; it was the culmination of years of evaluation and mentorship.

Structural Advantages Don’t Depend on One Person: Berkshire’s competitive moats—its scale in insurance, control of critical infrastructure, and brand recognition—aren’t disappearing with Buffett. These are built into the business model. A $1 trillion market cap doesn’t dissipate because of a CEO change.

Realistic Return Expectations: Berkshire won’t be a high-growth stock. The company is mature, and explosive expansion isn’t on the agenda. However, a mature company with Berkshire’s scale, profitability, and balance sheet strength can generate reliable long-term returns—exactly what many investors need.

Portfolio Stability During Volatility: In recent years, Berkshire has served as a stabilizing force during market turbulence. This role isn’t changing. Investors seeking portfolio diversification and downside protection will continue to value these shares.

The Investment Case for Buying Below $500

Buying Berkshire below $500 makes sense if you:

• Believe in continuity over disruption: While leadership has changed, the business fundamentals remain intact. The next chapter may look different, but it won’t be written from scratch.

• Value downside protection: With its fortress balance sheet and diversified operations, Berkshire offers a hedge against market extremes.

• Think long-term: If you’re investing for the next decade, not the next quarter, Berkshire’s steady-handed stewardship under Abel aligns with your timeline.

• Appreciate quality at a slight discount: At 185% of TBV, you’re getting a quality business at prices slightly more favorable than recent history.

The Final Takeaway

Missing Hathaway’s Buffett era is understandable. But missing the opportunity to own a fortress of a company during a manageable leadership transition would be a strategic error.

Class B shares at $497 represent a company in excellent shape, helmed by a vetted successor, backed by a war chest of cash, and positioned to deliver reliable returns. For investors willing to look past the headline uncertainty, that’s an opportunity worth considering.