Michael Burry said Berkshire Hathaway is no longer an attractive investment due to concerns over how CEO Greg Abel deploys cash [1].
The critique from the Scion Asset Management manager suggests a fundamental shift in the investment philosophy of the U.S. conglomerate. Because investors have long relied on the disciplined patience of Warren Buffett, any perceived departure from that strategy could impact the company's long-term valuation [1, 2].
Burry shared his views in a post on X on Aug. 8 [2, 4]. He said that Greg Abel, who has taken over the deployment of the firm's cash reserves, does not possess the same level of patience as his predecessor [3]. Specifically, Burry said that Abel lacks the patience for the "fat pitch" — a term used to describe waiting for an overwhelmingly favorable investment opportunity with high potential returns [3].
This shift in approach is central to Burry's loss of confidence in the post-Buffett era of the company [3]. The hedge-fund manager, known for his high-profile bets against the U.S. housing market, said that his primary concerns regarding the leadership transition have materialized [2].
"My biggest fear…has come true," Burry said [2].
While Berkshire Hathaway has continued to report strong earnings, the tension between active capital deployment and the traditional "wait-and-see" approach remains a point of contention for some analysts [4]. Burry's assessment that "Berkshire is no longer an attractive investment" reflects a belief that the company is now more likely to accept mediocre returns rather than waiting for rare, high-conviction opportunities [1].
“Berkshire is no longer an attractive investment.”
This critique highlights the 'key man risk' associated with Warren Buffett's legacy. For decades, Berkshire's value was tied not just to its assets, but to Buffett's specific psychological discipline in avoiding average investments. If the market perceives Greg Abel as more aggressive or less patient, the 'Buffett premium'—the extra value investors place on the stock due to its leadership—could diminish.
