Summary

• Berkshire Hathaway (BRK.A/BRK.B) enters a new era as Greg Abel assumes the CEO role, and I expect the valuation focus to shift back to the P/B ratio.
• Despite diversification, BRK’s insurance segment still drives over 50% of pre-tax earnings, reinforcing the relevance of book value in the valuation.
• In the meantime, a record $397B cash position signals limited investment opportunities and weakens the argument for book value premium.
• I feel optimistic for Abel to keep improving operating efficiency, but elevated P/B ratio of 1.44x can offset future return potential.
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BRK stock: Q3 changes made P/B ratio more relevant

I last analyzed Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) on Mar 27 with an article titled " Berkshire Hathaway: Why I Set A $450 Limit Buy Order”. The article, focusing on the company’s FQ4

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