Watch the Video
Our conversation began with the realization that one of the most extraordinary careers in investing history is formally entering its final chapter. As Lee and I discussed, the idea of Warren Buffett no longer serving as CEO is almost surreal, given how long he has been a constant presence in markets and portfolios across generations of investors.
A career built on disciplined opportunism
Lee opened by reflecting on Buffett’s defining characteristic: disciplined value investing combined with ruthless opportunism when markets panic. Time and again, Buffett stepped in when capital was scarce and fear was overwhelming. His investments in Goldman Sachs during the financial crisis exemplified this approach, providing not just capital but confidence to markets that desperately needed reassurance. The same pattern repeated with Bank of America, where preferred shares and warrants generated extraordinary long-term gains.
Cash as strategic leverage
I pointed out that what makes this transition period especially important is the sheer scale of Berkshire’s liquidity. With roughly $354 billion in cash, Buffett and his successor Greg Abel hold a weapon that only becomes more powerful during market dislocations. Lee agreed that this cash is unlikely to be deployed gradually. Instead, it is being reserved for a moment of stress, a sharp correction, or a systemic event where Berkshire can write massive checks at favorable terms.
Both of us acknowledged that a 20% market reset is far from unthinkable, particularly if AI-related capital spending slows or funding expectations falter. In such a scenario, Berkshire’s cash pile becomes a competitive advantage that few firms can match.
Transition risk and market perception
We also discussed whether Berkshire’s recent underperformance relative to the S&P 500 reflects transition anxiety rather than fundamentals. Buffett’s long-standing philosophy of buying quality businesses and holding them for decades remains deeply embedded in the organization. His legacy holdings, including Apple, still anchor the portfolio, even as Berkshire has selectively added exposure to companies like Alphabet and Amazon.
Lee raised an important point about what might change in a post-Buffett era. For years, Wall Street has urged Berkshire to initiate a dividend. Whether Greg Abel ultimately embraces that idea could materially reshape the shareholder base and the stock’s valuation framework.
A long-term investor base remains
We concluded by emphasizing that Berkshire’s shareholder base is fundamentally different from short-term traders. These are investors who bought the stock with the expectation of holding it for decades, trusting in disciplined capital allocation rather than speculation. Buffett’s departure from the CEO role does not erase that culture, but it does mark a psychological turning point for markets that have grown accustomed to his steady hand.
Transcript:
[00:00:04] Doug McIntyre: This is Lee Jackson next to me. I’m Doug McIntyre. Tomorrow’s New Year’s Eve, right? We’re anticipating a lot of stuff for next year.
[00:00:13] Doug McIntyre: We’re gonna talk about, but one of the great careers in the history of investing is going to sunset tomorrow. Yeah.
[00:00:21] Lee Jackson: And boy, I mean, I’ve been in this business for 35 years.
[00:01:17] Doug McIntyre: Well, the Goldman thing is a good example. Goldman had to take money the government told them they couldn’t have just one, one bank that didn’t take it, it would make it seem like everybody else was going out of business, right? They got the money from Buffet and he got a sweet, deal.
[00:01:49] Lee Jackson: Yeah. Yeah. Well, and he did the same thing with Bank of America, because remember, when things got really dicey in ’07 and ’08 and I was in the business, then I was working in Morgan Stanley then.
[00:02:21] And boy did he ever, but man, he got preferreds and all, high yielding preferreds and, a ton of common, and, he just made out like a bandit. And he did the same thing with Occidental (NYSE: OXY) | OXY Price Prediction. Now it’ll remain to be seen how that works out, but he had some huge, huge preferreds from Occidental as well that I think come due soon.
[00:02:44] But, man. he’s done so well to leverage the cash. And speaking of cash, he has 354 billion now. What do you think he’s gonna instruct Greg Abel to do with that?
[00:03:36] Lee Jackson: Yeah, absolutely he will. And, he clearly he’s never had this much cash. Never. And, and especially as a percentage of Berkshire Hathaway. And, he can always use it for private equity purchasing, which he does a lot of, it has a ton in his private equity portfolio, but he’s waiting for the home run swing and it may be Abel that takes it.
[00:05:37] Lee Jackson: Yeah. He, again, he was a value buyer and it’ll be interesting to see now he’s made a small foray into Alphabet, which has turned out to be, one of the best or the best Mag seven this year. So it’ll be interesting to see if, and he is got a little bit of Amazon and of course he’s still got a chunk of Apple, which is still probably his biggest position, although he is sold a ton over it over the last three years.
Top Gaining Stocks
Top Losing Stocks