BRK.B
"Berkshire posted record Q3 earnings (+33.6%) yet trades 11.5% below its peak after Buffett's exit. With $381B in cash, a $48B wildfire shadow, and an untested CEO -- are the structural moats enough?"
Berkshire Hathaway is a $780B diversified conglomerate built around $176B of insurance float at negative 2.2% cost, a BNSF railroad duopoly, 49+ manufacturing and retail businesses, and $381.6B in cash and T-bills. Warren Buffett retired as CEO on December 31, 2025, succeeded by Greg Abel, who is 45 days into his tenure with no major acquisitions and unknown personal BRK holdings. PacifiCorp, a Berkshire Hathaway Energy subsidiary, faces $48B in wildfire claims from the 2020 Oregon fires with a BBB- credit rating one notch above junk.
Executive Summary
Cross-lens roll-up assessment
Berkshire Hathaway's core structural moats -- $176B insurance float at negative cost, BNSF railroad infrastructure, and GEICO's sustained ~80% combined ratio -- remain wide and defensible. The primary risk is concentrated in PacifiCorp's $48B wildfire liability (17x gap between claims and reserves) and the untested governance transition under Greg Abel. The $381.6B cash position simultaneously provides unmatched crisis resilience and creates the highest-dollar-impact narrative gap at ~49% of market capitalization.
Berkshire's structural foundation is robust: wide core moats, $381.6B cash, zero parent leverage, record operating earnings, and five diversified segments with no concentration risk. PacifiCorp wildfire liability is the primary concern but is subsidiary-contained and backed by the largest corporate cash position in history. Governance transition is untested but the decentralized structure and operational continuity (GEICO, BNSF performing well) reduce urgency. PROCEED_WITH_CAUTION rather than STANDARD_DILIGENCE because PacifiCorp's 17x claims-to-reserves gap, Abel's untested tenure, and compound tail risk scenarios (5-15% probability) warrant elevated monitoring. Upgrade triggers: Abel's first major acquisition at favorable terms, PacifiCorp trial outcomes below reserves, buyback resumption. Downgrade triggers: PacifiCorp downgrade below investment grade, GEICO CR above 95%, additional senior insider selling.
Key Takeaways
- •COMPETITIVE_POSITION is DEFENSIBLE -- insurance float ($176B at negative 2.2% cost), GEICO operational superiority (~80% CR for 7 consecutive quarters), and BNSF infrastructure duopoly provide wide core moats, even as the Buffett personal brand and BHE energy segment face active erosion.
- •REVENUE_DURABILITY is DURABLE -- structurally sound across five independent segments with no customer concentration, regulatory arbitrage, or platform dependency. Total insurance earnings are flat to growing as GEICO turnaround offsets rate-driven investment income declines.
- •REGULATORY_EXPOSURE is ELEVATED -- PacifiCorp's $48B wildfire claims with BBB- credit, accelerating mini-trials through 2027, and Deloitte-flagged loss estimation uncertainty. Contained to BHE subsidiary but Berkshire's behavioral pattern of supporting subsidiaries makes it a consolidated concern.
- •NARRATIVE_REALITY_GAP is DIVERGING -- bears overstate transition risk (record Q3 earnings +33.6%), bulls overstate cash optionality ($381.6B earning declining yields with zero deployment). Both narratives contain material inaccuracies.
- •GOVERNANCE_ALIGNMENT is MIXED -- Buffett retains $160B+ with zero sales, but Jain sold $8M discretionary at near-ATH, Abel's holdings are unknown, and Combs departed to JPMorgan during transition.
- •ASSUMPTION_FRAGILITY is CONCENTRATED -- four critical assumptions (cash deployability, PacifiCorp containment, institutional moat transferability, float sustainability) each underpin 3-4 lens conclusions.
Key Tensions
- •PacifiCorp is legally ring-fenced to BHE but behaviorally shared -- Berkshire has never let a subsidiary default, making the 17x claims-to-reserves gap a parent-level concern despite legal containment
- •Cash position is simultaneously the ultimate strength ($381B crisis buffer) and the highest-dollar-impact weakness (declining yields, zero deployment, ~49% of market cap earning sub-optimal returns)
- •Succession risk is directionally real but magnitude appears overpriced: record Q3 earnings and decentralized structure reduce key-person dependency, while Abel's untested deal-sourcing and unknown holdings create monitoring risk
- •Dual wildfire exposure -- Berkshire is both utility owner (PacifiCorp) and insurer ($1.1B CA wildfire losses in H1 2025) -- creates correlation risk the committee treated as independent
Moat Mapper
Is the advantage durable?
Key Metrics
Key FindingsClick to expand details
Signal AssessmentsClick for full context
| Signal | Scale | Assessment | Evidence |
|---|---|---|---|
Competitive Position | — | DEFENSIBLE | 3Triangulated |
Model Debates
Cross-Lens Insights
Where Lenses Agree
- PacifiCorp Wildfire Is the Dominant Risk Vector (4/5 standard lenses)
- Insurance Float Is the Core Structural Moat (3 lenses)
- Succession Risk Is Real But Overpriced by Bears (3 lenses)
- Cash Position Is Simultaneously Strength and Weakness (3 lenses)
Where Lenses Differ
FORWARD_GOVERNANCE_TRAJECTORY
Compatible but conditional -- structural moats remain wide today, but their maintenance requires competent governance.
PACIFICORP_CONTAINMENT_LEVEL
Both valid -- legally ring-fenced to BHE, but behaviorally shared because Berkshire never lets subsidiaries default.
The following publicly available documents were collected and extracted into a structured fact dossier that powered this analysis.
SEC Filing
- Annual Report (10-K) -- FY2024
- Quarterly Report (10-Q) -- Q3 2025
- Quarterly Report (10-Q) -- Q2 2025
- Quarterly Report (10-Q) -- Q1 2025
- Quarterly Report (10-Q) -- Q3 2024
- Current Report (8-K) -- Q3 2025 Earnings
- Current Report (8-K) -- Q2 2025 Earnings
- Current Report (8-K) -- FY2024 Earnings
- Current Report (8-K) -- Leadership Changes (Dec 2025)
- Current Report (8-K) -- Succession Announcement (May 2025)
- Amended Current Report (8-K/A) -- Jan 2026
- Proxy Statement (DEFA14A) -- 2025
- Insider Transaction Filings (Form 4 x20)
- Schedule 13D/A and 13G Ownership Filings
Earnings Transcript
- 2025 Annual Shareholder Meeting Transcript (May 3, 2025)
Research Document
- Post-Buffett Bear Case Analysis (multiple sources)
- PacifiCorp Wildfire Risk Analysis (Insurance Journal, Bloomberg)
- CourtListener Litigation History (10 cases)
Web Source
- Google Trends Alternative Data (GEICO, Dairy Queen, BRK stock)