“Is Berkshire Hathaway Still a Good Investment Post-Buffett? Happy Birthday, Warren!”

Happy Birthday, Warren!

The legendary Warren Buffett is set to celebrate his 94th birthday on August 30th. As investors eagerly anticipate the future of Berkshire Hathaway without Buffett at the helm, questions arise about the company’s direction, particularly with the passing of Charlie Munger and the emergence of CEO-designate Greg Abel.

For many Berkshire shareholders, including myself, the prospect of a post-Buffett era may seem daunting. However, there are compelling reasons to remain invested in the company. Despite Berkshire’s remarkable track record under Buffett’s leadership, recent performance suggests a shift towards a more index fund-like approach rather than a traditional corporation.

Since purchasing Berkshire stock in 2016, my wife and I have seen the once significant outperformance of the company compared to the S&P 500 diminish. While Berkshire has delivered a respectable return, it has been outpaced by an S&P 500 index fund when factoring in reinvested dividends.

The impending management change at Berkshire, with Greg Abel likely to succeed Buffett, does not raise significant concerns for me. Abel, a long-time Berkshire executive, is well-versed in the company’s operations and is expected to maintain its core principles. Additionally, the tax implications of selling Berkshire stock and the historical success of companies transitioning leadership further support my decision to hold onto my shares.

Founders and long-time CEOs are often succeeded by competent leaders, as seen in the cases of Apple and Walmart. Therefore, I see no immediate need to sell my Berkshire holdings and will monitor the situation closely. In the event of a sharp decline in Berkshire’s stock price post-Buffett, I may even consider increasing my position.

As we wish Warren Buffett a happy birthday, it’s essential for investors to assess their own strategies and consider the long-term implications of Berkshire Hathaway’s future. While uncertainties loom, staying informed and maintaining a diversified portfolio remain key principles for navigating the ever-changing landscape of the financial markets.

Maya Benjamin contributed research to this story.

Allan Sloan, a contributor to Yahoo Finance, is a seven-time winner of the Loeb Award, business journalism’s highest honor.