1 No-Brainer Stock to Buy Now and Hold Forever

It finally happened. Warren Buffett, the longtime CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), announced during the company's recent annual meeting that he would be stepping down as head of the conglomerate by year-end. Buffett is 94 years old, so his decision can't be too much of a surprise.

However, some investors are worried. Buffett's leadership is one of the key reasons Berkshire Hathaway has produced market-beating returns over the past few decades. The man earned the title of the greatest investor of all time for a reason. How will things evolve once he is no longer at the head of the company? Can it still produce excellent returns to loyal shareholders?

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These fears are what likely led to the conglomerate's shares falling by 5% after Buffett broke the news. However, my view is that Berkshire Hathaway remains an excellent "forever" stock, even as Buffett is stepping down.

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Different leader, same philosophy

The man set to become the next CEO of Berkshire Hathaway is Greg Abel, the current VP of the company's non-insurance operations. Buffett didn't simply pick a random name out of a hat to replace him during the annual meeting. He made this choice long ago, back in 2021. By then, Abel had been with Berkshire Hathaway for 21 years. Buffett had had time to impart his knowledge and observe Abel enough to make him the heir apparent to Berkshire Hathaway.

There are likely many factors that led to Abel being picked as Buffett's successor, but one of them is, without a doubt, the belief that Abel is capable of and will keep applying the fundamental philosophy and investing principles that have made the business so successful since the '60s. That's what Abel plans to do. During the company's annual meeting, when Buffett broke the news, Abel said the following:

It's really the investment philosophy and how Warren and the team have allocated capital for the past 60 years. Really, it will not change. And it's the approach we'll take as we go forward.

Abel's mention of Berkshire Hathaway's "team" is another crucial point. Buffett was not the only one responsible for the company's success. He had a longtime partner in Charlie Munger, who died in 2023. Similarly, more than one man now occupies a high position within the company and has gobbled up Buffett's wisdom and investing acumen.

Berkshire Hathaway's team will still feature other famous names, including Ajit Jain, the vice chairman of the company's insurance operations. There are several others. The team that will carry the torch after Buffett steps down as CEO will inherit something else besides Buffett's investing philosophy: an incredibly strong and diversified business.

The closest stock to an ETF you can buy

One of the reasons Berkshire Hathaway has crushed the market over the long term is its impressive mix of stocks. The list of the company's subsidiaries is long and includes businesses across many sectors and industries, from railroads and energy to insurance and manufacturing. True, some of the company's segments are far more important than others. Berkshire Hathaway's insurance business carries a lot more weight than most other individual units.

However, overall, the company's operations are incredibly diversified, much more than any other publicly traded corporation. Some of Berkshire Hathaway's subsidiaries might not perform well at any given point, but they won't all be affected the same by economic or marketwide challenges.

That's a significant strength, and that's before we factor in Berkshire's investment portfolio. Here, too, the company is somewhat diversified across consumer goods, consumer staples, financial services, energy, and more.

Beating the market is notoriously challenging, partly because major indexes are well diversified. That's why many investors opt to buy exchange-traded funds (ETFs) that track the performance of these indexes. Berkshire Hathaway is the next best thing, and it is even better because it was put together by the best investor of all time.

Buffett might be stepping down, but his style and philosophy will long outlive him within a company he has already set up for long-term success. Berkshire Hathaway was an excellent buy-and-forget stock before Buffett announced he would be stepping down. It remains so today.

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Prosper Junior Bakiny 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.