Berkshire can't keep up with the S&P since Buffett's retirement

Core Insights - Berkshire Hathaway is underperforming the broader market by nearly 23 percentage points since Warren Buffett announced his retirement as CEO, with Class A shares declining 12.66% while the S&P 500 rose 9.93% [1][4][7] - Investor hesitation regarding Berkshire's future leadership under Greg Abel, who will take over in January 2026, is evident as the market no longer views the company as a stable investment [2][5] - The company's historical outperformance is now in question, as the leadership transition from Buffett to Abel raises concerns about the replicability of past successes [3][5] Performance Analysis - Since Buffett's retirement announcement, Berkshire has not participated in the broader market rally, marking one of its worst relative performances in recent memory [4][6] - The company's conservative cash reserves, approximately $150 billion, have underperformed in a strong bull market, contributing to the widening performance gap [6][7] - The psychological impact of Buffett's departure is significant, with market participants questioning the future of Berkshire's capital deployment and deal-making prowess [5][6][7] Future Outlook - The potential for Berkshire to become a value trap exists unless its post-Buffett strategy is equally visionary, especially as market sentiment shifts towards high-growth tech and AI-centric investments [9] - The ongoing performance gap raises questions about whether this is a temporary adjustment or a more permanent structural re-rating of Berkshire's market position [7][9]