Did New Berkshire Hathaway CEO Greg Abel Repeat Past Warren Buffett Mistakes?

Berkshire Hathaway's first-quarter 13F under CEO Greg Abel showed major portfolio changes: a large new $2.6 billion Delta Air Lines stake, a $55 million Macy's position, and a significant increase in Alphabet, with Alphabet described as the largest move by far. The filing also showed Berkshire fully exited 15 positions, nearly eliminated its Constellation Brands stake, and reduced the portfolio from 39 stocks to 26. The piece is largely qualitative commentary on Abel's early capital-allocation choices rather than a direct operating update.

Analysis

The biggest signal here is not the stock selection itself, but the implied transfer of decision-making power away from Berkshire’s legacy value framework toward a more opportunistic, balance-sheet-aware style. That matters because the portfolio is now being used less as a permanent capital compounding engine and more as a tactical expression of management judgment; in the near term, that can compress the multiple if investors fear discipline is being replaced by “style drift.” The market is likely to underappreciate how much of Berkshire’s premium has historically depended on consistency rather than raw returns.

Alphabet is the only move that looks structurally aligned with a multi-year capital allocation edge. A meaningful add here suggests Berkshire is willing to pay for durable AI optionality where the moat is reinforced by data, distribution, and custom silicon, which creates a second-order benefit: if Alphabet continues to win AI workloads, it can expand share in cloud and search monetization while also lowering inference costs relative to peers. That makes GOOG the best long-duration expression from this filing, and potentially the cleanest way to express “Buffett-style quality” in a post-Buffett portfolio.

Delta and Macy’s are more controversial because they expose Berkshire to businesses where the payoff is highly path-dependent. DAL can work if capacity rationalization holds and premium/corporate demand remains firm, but the setup is fragile: a mild macro slowdown or fuel spike can erase the operating leverage quickly, so the thesis is best viewed over 2-4 quarters, not years. Macy’s is even more of a balance-sheet/liquidation catalyst trade than a compounding story; if real-estate monetization or asset sales do not accelerate within 6-12 months, the valuation support can remain a trap rather than a floor.

The contrarian read is that the portfolio cuts may be more bullish for the names sold than bearish for Berkshire. Forced simplification after a leadership transition can improve capital efficiency and reduce conglomerate complexity, while the exits from financial/payment holdings may create attractive entry points if the market overreacts to a one-quarter reweighting. The bigger risk is reputational: if the next few quarters show underperformance versus passive indices, the market may start to price Berkshire less as an all-weather compounder and more as a large, slowly evolving holding company.

Key Decisions for Investors

• Long GOOG vs. short BRK.B for a 6-12 month horizon: express the view that Alphabet is the cleaner AI compounding vehicle while Berkshire’s transition premium may compress. Use a 1:1 beta-adjusted spread; stop if BRK.B outperforms by >10% on a relative basis or if GOOG loses AI monetization traction.
• Initiate a tactical long DAL position only on pullbacks, with a 3-6 month holding period and a tight risk limit. Risk/reward is favorable if capacity discipline holds, but cut quickly on any sign of weakening corporate travel or worsening fuel costs; this is a trading position, not a core hold.
• Avoid chasing M outright; if interested, use a call spread or a small event-driven position tied to asset-sale/newsflow catalysts over 6-12 months. The upside is tied to real-estate optionality, but absent monetization, the stock can remain value-trapped.
• Use the Berkshire filing as a contrarian buy signal for AMZN, V, and MA on weakness over the next 1-3 months. A manager transition can create temporary overhang, but the business quality differential versus the selling pressure remains intact.
• For more defensive exposure, prefer GOOG over NVDA as the AI monetization play if you want lower execution risk and less valuation sensitivity over the next 12 months.