Berkshire’s Down 10% Since Buffett’s Exit News… But That’s Not the Number You Should Fear

Warren Buffett is out here warning that the U.S. dollar is going to hell and that housing is in a bubble. But respectfully, Warren... have you seen your own stock lately? Since May 3, when Grandpa Capitalism himself dropped that he’ll be stepping down as Berkshire Hathaway’s CEO at the end of 2025, shares have fallen over 10%. And unlike most market drops, this one can’t be blamed on inflation, AI, or Elon Musk doing something weird again. Nope… this is pure, uncut Buffett panic.

It’s like the investing world just found out Santa isn’t real. And to be fair, this might actually be worse… at least Santa didn’t control $347 billion in cash. For as long as our grandparents have been alive… Berkshire Hathaway has the stock market equivalent of a dependable old crockpot. Not flashy. Not exciting. But you throw in some GEICO premiums, a little BNSF railroad spice, and an unhealthy portion of Apple stock, and boom… steady returns every year for like five decades. Until now.

Since Buffett’s announcement, the stock has lagged the S&P 500 by roughly 15 percentage points. That’s freakout territory for a company that once sold at a premium simply because Warren still breathed the same Omaha air as its headquarters. David Kass, a finance professor and longtime Berkshire bull, said even he’s surprised by the sell-off. And mind you, this is a man who probably has framed Berkshire shareholder letters in his office.

See, there’s this thing called the “Buffett premium.” Investors historically paid extra for Berkshire shares not just because of the businesses inside it… but because Warren was driving the damn bus. The guy has a photographic memory, makes better capital decisions than most hedge funds, and probably hasn't missed a dividend since Elvis was alive.

Now, with Greg Abel stepping in, that premium’s getting flushed down the toilet. According to Warren, Abel’s a competent exec, but his capital allocation record is about as exciting watching bowling on tv. And that’s not just me being a hater… under his leadership, Berkshire’s non-insurance operating ROEs have trended down, not up. And with $347 billion in cash now under his stewardship, investors are wondering whether he’ll use it to make power plays… or just buy more utility companies and call it a day.

To make matters worse, Berkshire’s Q1 operating earnings fell 14%. That’s the worst hit since COVID’s early days. Revenues were flat, GEICO took a hit thanks to wildfire-related insurance losses, and even the railroad business is bracing for a slowdown thanks to tariff worries. Sure, Berkshire Hathaway Energy is doing fine (up 53% in Q1), but it’s not enough to offset the worry that the entire conglomerate might be headed into a long, boring stretch of underperformance.

Oh, and that beloved Apple stake that makes up over a quarter of their equity portfolio is still there. Which seems… naive, considering Apple’s staring down the barrel of production costs, tariffs, and whatever Trump’s planning next if he takes office again (although, sticking with their Apple bet is the least of my worries, Tim Cook will figure it out… he always does).

For long-term value investors who’ve read The Intelligent Investor more times than the Bible, this might look like a buying opportunity. “Buy when there’s blood in the streets,” right? But if you're worried about the long, slow drip of capital inefficiency, mediocre returns, and a generation of Buffett fanboys waking up to the idea that maybe the magic was just… him? Then yeah, this might be your cue to step aside.

Because when Warren leaves that stage at the 2026 shareholder meeting (for good) yes, it will be the end of an era. But it could also be the beginning of Berkshire becoming… dare we say it… average.

Warren hasn’t handed his badge in yet, but his farewell tour is already wrecking Berkshire’s stock. Investors are pulling the emergency brake, the Buffett premium is in full retreat, and Greg Abel’s got the keys to a $1T company and $347B in cash. Whether he builds the next great empire or just keeps the lights on? That’s the $485/share question we’re all just gonna have to wait and see.

At the time of publishing this article, Stocks.News holds positions in Apple as mentioned in the article.