Warren Buffett's Successor, Greg Abel, Made His First Big Purchases at Berkshire Hathaway -- and He's Not Betting on America

Key Points

Berkshire Hathaway's longtime CEO, Warren Buffett, retired on Dec. 31, thereby passing the baton to Greg Abel.

The U.S. stock market entered 2026 at its second-priciest valuation over the last 155 years, suggesting that value is difficult to come by at present.

In March, Abel piled into four Japanese stocks with relatively inexpensive valuations and robust capital-return programs.

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One of Wall Street's trillion-dollar companies, conglomerate Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), has entered uncharted territory. For the first time in well over half a century, it's not being led by billionaire Warren Buffett, who retired as CEO on Dec. 31. Though the Oracle of Omaha remains chairman of the board, the company's day-to-day operations, including the oversight of its $322 billion investment portfolio, are Greg Abel's responsibility.

Abel and Buffett share similar investment philosophies, focusing on value above all else. But an Abel-run company won't be the same as a Buffett-led Berkshire.

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Although Buffett repeatedly opined that investors "never bet against America," Abel's first big purchases as CEO were international companies.

A historically pricey U.S. stock market has Abel looking overseas for bargains

Over multidecade periods, Buffett's thesis of never betting against America is spot-on. Economic and stock market cycles aren't linear, meaning periods of economic growth and bull markets on Wall Street last substantially longer than economic recessions and bear markets.

But the stock market didn't enter 2026 under normal circumstances. According to the S&P 500's Shiller Price-to-Earnings Ratio, this is the second-priciest stock market over the last 155 years (trailing only the dot-com bubble). Value is incredibly difficult to come by in the U.S. stock market, which is likely why Warren Buffett was a net seller of equities in the 13 quarters leading up to his retirement.

S&P 500 Shiller PE Ratio hits 2nd highest level in history 🚨 The highest was the Dot Com Bubble 🤯 pic.twitter.com/Lx634H7xKa

-- Barchart (@Barchart) December 28, 2025

While Berkshire Hathaway's now-former CEO would occasionally bend or break some of his unwritten rules, such as making short-term trades or purchasing companies with sizable debt loads, he never chased a position that he didn't feel offered value.

His successor, Greg Abel, is cut from the same cloth in this respect.

Berkshire Hathaway CEO Greg Abel is piling into Japanese stocks

Thanks to Form 4 filings with regulators, investors can get an idea of what Berkshire's first new boss in over half a century has been up to since the year began.

According to these filings, Abel added to Berkshire's existing stakes in Japanese trading houses Itochu (OTC: ITOCY), Marubeni (OTC: MARUF), and Sumitomo (OTC: SSUMY) in mid-March, and opened a $1.8 billion position in insurer Tokio Marine (OTC: TKOMY) days later.

Abel was instrumental in Berkshire Hathaway's initial and subsequent investments in the sogo shosha (Japan's trading houses) in 2019, which also include Mitsubishi and Mitsui. One of the prime reasons he gravitated to the sogo shosha was their value proposition. Whereas many of Wall Street's leading public companies trade at premium valuations, the sogo shosha have pretty consistently traded at high-single-digit to low-double-digit price-to-earnings ratios.

Furthermore, the sogo shosha and Tokio Marine offer generous capital-return programs. All six companies are paying dividends to shareholders, and their management teams are receiving modest pay packages compared to those of most large- and mega-cap U.S. public companies. Businesses that put shareholders first tend to be favored by Abel (and Berkshire's now-retired CEO).

Collectively, Abel has more than $43 billion of his company's assets invested in Japanese stocks, as of the closing bell on April 17. Until price dislocations crop up in U.S. markets, expect Abel to look beyond domestic borders for bargains.

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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.