Can Berkshire Hathaway survive without Buffett? After retirement, the market capitalization evaporated by 130 billion USD. Can Abel continue the investment legend?

Warren Buffett announced his retirement just three months ago, and Berkshire Hathaway has already faced the most severe valuation shock in nearly 35 years. Is Berkshire, now stripped of the aura of the Oracle of Omaha, really no longer worth investing in? (Background: Berkshire's Q1 holdings revealed: Buffett cleared out Citigroup and reduced financial stocks, while heavily investing in this distillery, attracting attention with mysterious holdings) (Supplementary background: Buffett has net sold stocks for 11 consecutive quarters! Berkshire's Q2 financial report saw net profits plummet by 59%, with Kraft Heinz suffering a $3.8 billion impairment) The Oracle of Omaha announced his retirement just three months ago, and Berkshire Hathaway has already faced the most severe valuation shock in nearly 35 years. According to Google Finance data, Berkshire Hathaway's stock price stood at $540 on May 2, but has since fallen to $467, a drop of 13% over three months, with its market capitalization shrinking to $1.01 trillion (erasing $130 billion), contrasting sharply with the continued rise of the S&P 500 index during the same period. Once considered a safe haven in the market, Berkshire suddenly lost that "Buffett premium" aura, shaking investor confidence and seemingly symbolizing the turning of an era. The aura fades: Three months of evaporating premium For decades, Buffett's stable value investment philosophy has brought additional valuations to Berkshire. However, CFRA analyst Cathy Seifert pointed out that this "Buffett premium" quickly contracted after the Oracle's retirement announcement; the gap between Berkshire and the S&P 500 index has only been surpassed by the performance during the onset of the pandemic in 2020. In the past, even when the U.S.-China trade war in 2018 caused global turmoil, Berkshire was still seen as a "safe haven." Now, stripped of the aura of Buffett, its safe-haven property is gradually fading, suggesting that Berkshire's valuation can no longer rely solely on the Oracle's reputation, but must return to fundamentals and the new management's strategy. Solid operations but difficult to counter investment impairment However, if we only look at its core business, Berkshire has not actually waned. Public data shows that in the second quarter, Berkshire's railway, utility, manufacturing, and retail sectors, after excluding exchange rates, still saw an 8% increase in operating profits. However, due to a decline in common stock investment returns and an impairment of Kraft Heinz stock, Berkshire's operating profit fell 4% year-on-year to approximately $11.16 billion, and net profits plunged by 59%. This financial report revealed that even the most stable operations cannot fully resist the impact of a single large investment failure. Moreover, Berkshire's cash position currently remains high at $344 billion, accounting for about 30% of total assets, and has net sold stocks for 11 consecutive quarters. Market sentiment shifts: Technology hype and value stock disparity Another pressure on Berkshire's stock price comes from the shift in investor preferences. Bill Stone pointed out that market funds are flowing into "fast-growing tech stocks," rather than traditional value investment targets where Berkshire excels. As hot trends focus on AI, cloud computing, and semiconductors, the railway, insurance, and consumer brands held by Berkshire may seem to investors to lack greater imaginative potential. Abel takes over: Challenging capital and narrative dual tests Buffett's successor, new Berkshire CEO Greg Abel, faces two daunting tasks: first, managing the massive cash flow; second, rebuilding Berkshire's market narrative without the support of the "Oracle" aura. In the face of investor skepticism, Abel must prove that Berkshire can still generate excess returns amid macro headwinds. Analysts point out that he faces three paths: continue to seek targets that meet traditional value criteria; increase allocations to new economic sectors; or adopt a more aggressive capital return strategy. Each step concerns the balancing act of "value investing" and "market growth." Abel's decisions will also impact whether Berkshire can write a new legendary story in the post-Buffett era. Related reports Buffett clears out Brazilian crypto-friendly bank Nu Holdings "profits of $250 million," Berkshire's cash reserves reach a record high of $347.8 billion Buffett admits: truly feeling old, thinking and reading becoming laborious... first talks about decision to step down as Berkshire CEO Farewell to the Oracle! Buffett announces he will step down as Berkshire CEO by the end of 2025, with Greg Abel taking over. (Can Berkshire continue the investment legend after Buffett? Market capitalization evaporates by $130 billion after retirement, can Abel write a new investment saga?) This article was first published in BlockTempo, the most influential blockchain news media.