Warren Buffett’s Berkshire Hathaway is falling behind fast on global trends

Warren Buffett is stepping down as CEO of Berkshire Hathaway by the end of 2025, and that’s not the big story. The real problem is that the company he built is clearly lagging.

The structure, the strategy, the way it moves — all of it feels frozen in time while the rest of the global finance world is changing to real-time crypto plays, high-frequency ETF flows, and tech-powered decisions.

Warren confirmed his retirement two weeks ago at the annual meeting, and Omaha World-Herald reported he will no longer take the stage at future gatherings. Instead, his successor, Greg Abel, will front the 2026 event on May 2.

Warren, who started using Berkshire in 1965 to build his investment vehicle, has managed to grow the share price at 20% per year for 60 years. That’s twice the S&P 500. But the way he did it simply doesn’t work anymore.

In the Financial Times, Terry Smith, CEO of Fundsmith, wrote, “I shall not look upon his like again,” after breaking down why no one will be able to repeat Warren’s record.

Berkshire’s advantage was float and leverage, not just stock picks

Terry said Warren’s real edge came from his understanding of float, the ability to invest other people’s money before it was needed. The first time Warren saw this was with American Express. Back when travelers used paper cheques, they’d buy more than they needed before a trip.

That meant Amex had extra cash sitting idle — cash that could be invested. He saw the same thing in Blue Chip Stamps, a company Berkshire took over. Supermarkets had to buy loyalty stamps in advance before giving them to customers. That money sat on the books as float.

Warren, with help from Charlie Munger, who died in 2023, used these lessons to fuel his real leverage: insurance. Companies like Geico gave Berkshire upfront premiums every year. As long as underwriting didn’t blow up, the cash was a free loan.

That gave Warren firepower, and he used it. On average, he leveraged Berkshire’s portfolio at 1.6 to 1. Not with loans, but with cash that wasn’t technically his. And because he controlled a closed-end company, he didn’t face the pressure most fund managers do when performance dips.

Terry pointed out that most fund managers don’t control their funds. They answer to boards and impatient investors. When performance drops, those investors flee or demand buybacks or management changes. Warren never had to deal with that. He could underperform for years and never blink.

No one will be allowed to do this again

Terry made it clear that this setup won’t be allowed again. Regulators today would never let one man control an insurance empire and throw premiums into equities. They’d demand investment-grade bonds. The fund structure is also dead.

The world now pours into ETFs, open-ended funds that price throughout the day and react in real time. That structure makes it impossible to ignore short-term losses, and investors won’t wait around for multi-year strategies to pan out.

He also took a shot at the dividend myth. People love to say most equity returns come from dividends. But Berkshire has paid only one, a single 10-cent dividend in 1967 worth $101,755 total. If that payout had been reinvested into Berkshire stock, it would be worth $4.8 billion now. Warren saw the math and shut dividends down forever.

Berkshire is now hiding another stock while the market guesses

While all this plays out, Berkshire is adding another unknown stock to its portfolio — quietly. A new SEC filing confirmed that the company is requesting confidential treatment again. That allows them to build a large position without moving the price.

It’s not the first time. In late 2023 and early 2024, Berkshire kept its Chubb stake under wraps until the buying was complete. That position is now worth around $8 billion. They did the same with Chevron and Verizon back in 2020.

This time, the 10Q filing shows a $2 billion jump in “commercial, industrial and other” stocks, plus a $1.1 billion increase in “consumer products.” That’s all the public knows. But Berkshire also doubled down on Constellation Brands, and increased bets on Domino’s Pizza, Pool Corp., and aerospace contractor Heico.

Greg Abel, who has been tapped as the next CEO, told the Omaha World-Herald that the 2026 annual meeting will still take place in Omaha on May 2. But Warren won’t be up there. He’ll be in the audience with the board — a quiet exit from the spotlight after six decades of dominance.

While the world moves into crypto, ETFs, and 24/7 markets, Berkshire is still quietly building its next big secret play. The problem is, the game has changed — and Warren’s playbook is stuck in the past.

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