Greg Abel Is Buying Warren Buffett's Favorite Stock -- but He's Unlikely to End the 13-Quarter Net Selling Streak of Berkshire's Former Boss
Key Points
On Dec. 31, the Oracle of Omaha retired as CEO of Berkshire Hathaway, with Greg Abel succeeding him.
Following a 21-month hiatus, Buffett's favorite stock -- one he spent roughly $78 billion purchasing over six years -- is once again being bought.
However, a historically pricey stock market is making it challenging for Berkshire's new boss to find bargains.
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On Dec. 31, Berkshire Hathaway's (NYSE: BRKA)(NYSE: BRKB) longtime chief and billionaire investment guru, Warren Buffett, stepped down as CEO and handed the reins to Greg Abel. Although Berkshire has entered uncharted territory without the Oracle of Omaha steering the ship, it's nevertheless being guided by someone whose business and investment philosophy meshes well with the company's now-former boss.
Recently, Abel made his first big move as CEO by purchasing shares of Warren Buffett's favorite stock. However, investors who get their hopes up that Abel will end the 13-quarter streak of net stock sales that led up to Buffett's retirement are likely to be disappointed.
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Berkshire Hathaway's longtime CEO, Warren Buffett, retired on Dec. 31. Image source: The Motley Fool.
After a 21-month hiatus, Buffett's favorite stock is being bought
Although quarterly filed Form 13Fs spill the beans about which stocks Wall Street's savviest money managers were buying and selling, Warren Buffett's favorite stock to buy isn't found in a 13F. Rather, the company's quarterly operating results detail purchases and sales of this stock. That's because Buffett's favorite stock to buy was always shares of his own company.
In July 2018, when Berkshire's board amended the rules governing buybacks to give its now-former boss more liberty to repurchase shares, Buffett took the bull by the horns and began buying back his Class A (BRKA) and B (BRKB) shares with regularity. Over six years (July 2018 – June 2024), he spent nearly $78 billion repurchasing shares.
But in the 19 months leading up to Buffett's retirement (June 1, 2024 – Dec. 31, 2025), along with the first two months of Abel's tenure, no shares were repurchased. The reason why is simple: valuation.
During the six years Warren Buffett repurchased shares, Berkshire Hathaway stock commonly traded at a 20% to 50% premium to book value. When it reached a 60% to 80% premium, he stopped buying. Value is of the utmost importance to Buffett... and Abel!
However, following the release of Berkshire's fourth-quarter operating results and its subsequent share price swoon, Abel turned on the spigot and kick-started buybacks. With Berkshire stock briefly hitting a premium to book value of 44% (roughly a two-year low), the value proposition of Buffett's favorite stock had returned.
Image source: Getty Images.
Berkshire Hathaway's 13-quarter net selling streak is likely to continue
But while value has returned to Berkshire Hathaway stock, the same can't be said of the broader market. Berkshire's billionaire investing legend sold more stocks than he purchased for 13 consecutive quarters leading into his retirement, totaling close to $187 billion in cumulative net selling.
Although Abel has a veritable treasure chest to work with -- $373.3 billion in combined cash, cash equivalents, and U.S. Treasuries -- finding a bargain amid a historically pricey stock market is challenging.
The S&P 500's (SNPINDEX: ^GSPC) Shiller Price-to-Earnings (P/E) Ratio has been hovering between 39 and 41 for months, which is more than double its 155-year average of 17.35. The five previous times the Shiller P/E exceeded 30 during a continuous bull market were eventually followed by declines of 20% or greater in the S&P 500.
Warren Buffett Indicator hits an all-time high of 224%, the most expensive stock market valuation in history 🚨🚨 pic.twitter.com/BgIiOkFlfl
-- Barchart (@Barchart) January 11, 2026
Likewise, the market cap-to-GDP ratio, more commonly known as the Buffett indicator, recently hit an all-time high. Whereas the cumulative value of all U.S. publicly traded stocks has averaged 87% of U.S. gross domestic product (GDP) since 1970, this ratio hit nearly 222% in January 2026.
Abel may be purchasing Buffett's favorite stock, but it's unlikely he's a net buyer of equities.
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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.
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