Greg Abel Gets the Keys

⛱️ Warren Buffett announced he will step down as Berkshire Hathaway CEO at year-end, naming Greg Abel as his successor.

May 05, 2025

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In this issue of the peel:

  • ⛱️ Warren Buffett announced he will step down as Berkshire Hathaway CEO at year-end, naming Greg Abel as his successor. 

  • 📈 Global markets rally on robust U.S. tech earnings and easing trade tensions.

  • 🍎 While its mega-cap tech peers saw positive reactions to a market-beating Q1, Apple faced declines of 3.7% amid mixed earnings.

Banana Bits

The Supply Chain Crisis Is Escalating — But This Tech Startup Keeps Winning

Global supply chain chaos is intensifying. Major retailers warn of holiday shortages, and tech giants are slashing forecasts as parts dry up.

But while others scramble, one smart home innovator is thriving.

Their strategic move to manufacturing outside China has kept production running smoothly — driving 200% year-over-year growth, even as the industry stalls.

This foresight is no accident. The same leadership team that saw the supply chain storm coming has already expanded into over 120 BestBuy locations, with talks underway to add Walmart and Home Depot.

At just $1.90 per share, this resilient tech startup offers rare stability in uncertain times. As investors flee vulnerable companies, this window is closing fast.

Past performance is not indicative of future results. Email may contain forward-looking statements. See US Offering for details. Informational purposes only.

Macro Monkey Says

U.S. Economy Defies Tariff Turbulence

Despite facing significant trade disruptions, the U.S. economy has demonstrated remarkable resilience. 

In April 2025, employers added 177,000 jobs, surpassing expectations, while the unemployment rate remained steady at 4.2%. Wage growth held firm at 4.1% year over year as of March, supporting consumer spending despite inflationary pressures. 

This robust labor data came even as new tariffs introduced fresh uncertainty, with companies like General Motors and JetBlue withdrawing earnings guidance due to cost volatility and global demand softness. 

The biggest drag? The 145% tariff on Chinese goods announced earlier this year. While intended to repatriate supply chains and protect domestic industries, it’s also squeezed margins across sectors from retail to tech. 

Several U.S. multinationals are reporting narrowed profit outlooks, sourcing delays, and recalibration of overseas operations. A survey by the National Federation of Independent Business found that nearly 38% of small business owners cite "policy uncertainty" as their biggest concern—a sharp increase from last quarter.

Still, the equity markets seem cautiously optimistic. The Dow gained 1.4% Friday, capping a 3% weekly rise, with the S&P 500 and Nasdaq also up on renewed hopes of policy moderation and trade de-escalation. Investors are closely watching for any dovish shift from the Fed as it balances inflation control with the risk of policy overshoot. 

The Takeaway?

The U.S. economy continues to show strength in the face of trade-related challenges, with robust job growth and positive market responses. All in all, despite a rocky start to April, the S&P 500 ended down just 0.8% for the month—barely a dent, compared to the double-digit declines we saw earlier in the month. 

Turns out, panicking early might just mean missing the sale before the rally; however, rising tariffs, slowing earnings, and declining confidence present risks that could erode momentum over the next 12 months.

Career Corner

Question

I'm having trouble with accounting questions about non-cash expenses and adding them back to the cash flow statement.

For one question, I thought I had to add back interest expenses on the cash flow statement, but that was wrong, and for another question about writing down assets, I incorrectly didn't add back the write-down to the cash flow statement.

What determines whether an expense should be added to the cash flow statement?

Answer

They’re looking for your ability to tell that something is non-cash.

Depreciation is non-cash because the cash went out the door when you bought the factory.

Asset write-down is non-cash because the cash went out the door when that asset was bought, not in the current period. Writing it down is similar to depreciation…you’re not using cash to effect that write-down.

In your example, interest IS a cash expense in the current period. No need to add anything back - that cash is going out the door this period (and interest is captured in Net Income).

Head Mentor, WSO Academy

What's Ripe

Duolingo (DUOL) 21.6%

  • Duolingo's stock surged 21.6% following a robust first-quarter earnings report that exceeded Wall Street expectations. 

  • The language-learning platform reported earnings of 72 cents per share on revenue of $230.7 million, outperforming analyst estimates of $0.52 and $223.15 million, respectively. 

  • The company also saw significant user growth, with 10.3 million paying subscribers and 46.6 million daily active users, up 49% from the previous year.

DexCom (DXCM) 16.2%

  • DexCom's shares climbed 16.2%, outperforming competitors, after the company announced a $750 million stock buyback and reported strong first-quarter revenue. 

  • The medical device company, specializing in continuous glucose monitoring systems, saw worldwide revenue and U.S. revenue up 12% and 15%, respectively, compared to Q1'24, with 14% revenue organic growth across the same period, marking the second consecutive quarter of reaccelerating revenue growth.

What's Rotten

Atlassian (TEAM) 9%

  • Atlassian's stock fell 9% after the company reported third-quarter fiscal 2025 results that, while surpassing expectations, raised concerns among investors. 

  • The IT project management software company met Wall Street’s revenue expectations, with sales up 14.1% year over year to $1.36 billion. However, EPS missed analyst estimates by a whopping 5.5%, with the market reacting negatively, leading to a significant drop in share price.

Apple (AAPL) 3.7%

  • Apple's stock declined 3.7% despite reporting strong second-quarter financial results, with revenue reaching $95.36 billion. The drop was attributed to investor concerns over potential tariffs that could raise costs by $900 million in the upcoming quarter. 

  • CEO Tim Cook noted efforts to mitigate tariff impacts by diversifying the supply chain, including shifting some production to India and Vietnam.

Thought Banana

Buffett Passes the Baton

After six decades at the helm of Berkshire Hathaway, Warren Buffett, the legendary "Oracle of Omaha," has announced he will step down as CEO at the end of 2025. His chosen successor is Greg Abel, a 62-year-old Canadian executive currently serving as Berkshire's Vice Chairman of Non-Insurance Operations. ​

Buffett's tenure transformed Berkshire from a struggling textile company into a $1.16 trillion conglomerate, encompassing nearly 200 businesses and a $264 billion stock portfolio. Known for his value investing philosophy and frugal lifestyle, Buffett has amassed a fortune of $168.2 billion, most of which he has pledged to donate to charity.​

Greg Abel has been with Berkshire since 1992, overseeing key subsidiaries like BNSF Railway, See’s Candies, and Dairy Queen. He is respected for his strategic thinking and commitment to Berkshire's decentralized culture. Abel's leadership style aligns with Buffett's emphasis on integrity and long-term value creation.

While Buffett will remain available in an advisory capacity, Abel will assume full control, including capital allocation and investment decisions. This transition has been meticulously planned, with Buffett expressing confidence in Abel's ability to preserve Berkshire's unique culture and performance.

Big names on Wall Street and global capitalism have provided their tributes to the longevity and influence Warren Buffett has had on the world of investing. 

“Warren Buffett represents everything that is good about American capitalism and America itself—investing in the growth of our nation and its businesses with integrity, optimism, and common sense,” JPMorgan Chase’s CEO Jamie Dimon said in a statement. “I’ve learned so much from him to this very day, and I am honored to call him a friend.”

The Takeaway?

Warren Buffett's retirement marks the end of an era for Berkshire Hathaway. Greg Abel's succession ensures continuity in leadership and investment philosophy. Investors and admirers worldwide will be watching closely as Abel steps into one of the most high-profile roles in the business world.

The Big Question: Can Greg Abel maintain Berkshire’s magic—or is the post-Buffett era destined to be just...ordinary?

Banana Brain Teaser

Previous

M, N, and O were paid a total of $780 for waxing the floors at their school. Each was paid in proportion to the number of hours he or she worked. If M worked 15 hours, N worked 20 hours, and O worked 30 hours, how much was M paid?

Answer: $180

Today

The quotient when a certain number is divided by 2/3 is 9/2. What is the number?

Send your guesses to [email protected]

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Warren Buffett

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