Where Will Berkshire Hathaway Be in 5 Years?

• For the archetypal clip successful 55 years, Berkshire volition person a caller main enforcement astatine its helm.

• Berkshire’s open-ended operation should beryllium palmy nether immoderate qualified leadership.

• Nevertheless, however it delivers shareholder worth could look measurably different.

• 10 stocks we similar amended than Berkshire Hathaway ›

With Warren Buffett conscionable days distant from ending his stellar 55-year stint arsenic CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) and passing the torch to Greg Abel, astir investors are understandably asking questions. What does this alteration mean for Berkshire's future, and what mightiness that successful crook mean for the company's stock?

Answer: Nobody truly knows for sure. There are reasonable, educated likelihoods though, astir of which tin beryllium placed successful 1 of 2 categories. There's the qualitative change successful however this analyzable conglomerate is steered. And determination are the resulting quantitative changes that volition straight interaction shareholders' worth and performance.

Here's a person look astatine the astir apt differences we'll plainly spot successful some categories wrong the adjacent 5 years.

If you cognize thing astir Warren Buffett, past you astir surely cognize he's a instrumentality of worth stocks of simple, straightforward consumer-facing businesses. Coca-Cola is simply a long-held apical Berkshire holding, for instance. Conversely, Buffett's ne'er been a large instrumentality of exertion stocks, explaining helium doesn't similar to ain businesses helium doesn't understand.

Incoming CEO Greg Abel whitethorn consciousness differently, though. In fact, adjacent with Buffett inactive astatine the helm, Berkshire Hathaway has precocious eased its mode into the exertion arena by stepping into stakes successful Alphabet and Amazon -- positions that would person been unthinkable conscionable a fewer years ago.

The conglomerate isn't going to beryllium taking immoderate fliers connected immoderate hyper-aggressive tech names anytime soon. But don't beryllium amazed to spot much vulnerability to immoderate of the market's steadier exertion companies.

That said, besides don't beryllium amazed to spot idiosyncratic banal holdings de-emphasized successful the foreseeable aboriginal successful favour of much privately owned businesses. Berkshire Hathaway's banal picks are regularly dissected. But these equity positions lone relationship for astir one-third of Berkshire's full value.

Another 3rd is made up of privately held companies similar railroad BNSF, Geico Insurance, Duracell batteries, flooring institution Shaw, Pilot Travel Centers, and more. These are reliable currency cows adjacent if they're not the strongest of maturation engines. And successful an situation wherever equity valuations whitethorn stay astatine lofty levels for the indefinite future, Abel and his squad whitethorn person small prime but to hunt for opportunities extracurricular of the publically traded arena.