Will Berkshire Hathaway resume share buybacks (>$1B in any quarter) by Q3 2026?

Four consecutive quarters of zero buybacks through FY2025 is the dominant signal. The prior 0.23 was set when only Q1-Q3 2025 data was available — confirming Q4 also zero removes the residual probability that Buffett/Abel had quietly resumed. More importantly, the OxyChem $9.5B acquisition (closed Jan 2, 2026) reveals Abel's revealed preference: when capital is available and the price is right, he deploys via acquisitions. The capital allocation hierarchy Abel articulated explicitly puts acquisitions above buybacks. Abel now has roughly 10 months of demonstrated behavior: zero buybacks, one large acquisition. The 7pp BRK.B underperformance in 2025 creates a mild valuation attractiveness argument, but Abel has shown no inclination to use buybacks as a signal-sending tool. The excise tax and opportunity preservation arguments remain structurally intact. 7 months is meaningful time, but the base rate of Abel deploying $1B+ in any quarter via buybacks is currently zero out of four quarters.

The prior prediction context noted that Abel stated buyback resumption requires both valuation attractiveness AND no better deployment alternatives. The OxyChem acquisition demonstrates there are better deployment alternatives — Abel found and executed a $9.5B deal. This simultaneously (1) confirms the acquisition-preference in his hierarchy and (2) reduces free capital available for buybacks in the near term. With $369B cash remaining, capital isn't the constraint, but the preference structure is now documented by revealed behavior. The shareholder letter containing no buyback commitment or framework means no forward guidance exists. Without a specific catalyst — a 20%+ price correction, a public statement shifting tone, or a quarter with no acquisition targets — buybacks within 7 months seem unlikely. The 1% excise tax continues to apply. Abel's 5-criterion capital discipline framework applies to ALL uses including buybacks, and OxyChem just consumed the most recent major capital allocation decision.

Assessing the bull case: BRK.B underperformed the S&P 500 by ~7pp in 2025, which is meaningful. If intrinsic value grew faster than the stock price, the stock is now cheaper relative to IV than it was when Buffett stopped buybacks. This is the strongest upgrade argument. However, Abel hasn't commented on this relative underperformance as a signal to resume buybacks. The GEICO expense ratio expansion and insurance cycle headwinds (lower premium volumes in 2026) are operationally absorbing some capital planning attention. The 5-criterion capital discipline framework Abel articulated doesn't prescribe a specific use of capital — it applies the same rigor to buybacks and acquisitions alike. Given OxyChem just closed, there's likely an integration and cash outflow period. The pattern of zero buybacks for a full fiscal year, combined with a demonstrated preference for acquisitions, suggests 7 more months won't be enough to change the regime unless a specific market dislocation occurs.

The FY2025 data represents a meaningful downgrade from the 0.23 prior. The zero-buyback confirmation across four full quarters removes the ambiguity that existed when only nine months of data were available. The OxyChem acquisition is the most significant new signal: it reveals that Abel's default capital deployment mode is acquisitions, not buybacks, consistent with his articulated hierarchy. However, I weight the 7pp underperformance factor slightly more than the opus estimates. If Abel is running valuation models (as Buffett did), a 7pp relative underperformance vs. S&P 500 in a year where cash yields were competitive (~5%) narrows the intrinsic value gap. The resolution window of 7 months through September 2026 is not trivial. A surprise acquisition in Q1 2026 that uses up significant acquisition capacity could free Abel to consider buybacks in Q2-Q3 if prices remain soft. Base case remains NO, but the valuation attractiveness argument keeps this above 15%.

Taking a somewhat more generous view of the valuation channel. Berkshire's historical buyback criteria was roughly 'below 1.2x book value' — Buffett later removed this floor and moved to a more flexible framework citing intrinsic value. With $369B in cash and BRK.B underperforming the S&P by 7pp in 2025, a case can be made that Abel is now observing a more attractive entry point than existed in 2024 when buybacks were also zero. The 5-criterion framework Abel outlined is actually less restrictive than 'explicit P/B floor' because it allows subjective intrinsic value judgments. However, the OxyChem evidence is hard to dismiss: Abel had the cash, had flexibility, and chose a $9.5B acquisition. For this market to resolve YES, either another major acquisition opportunity must fail to materialize OR Abel signals a change in stance. Insurance cycle headwinds reducing premium volumes in 2026 may marginally increase the attractiveness of returning capital — but this effect is small. Holding at 18% to capture residual valuation and timeline uncertainty.

Reconciling the two gemini runs: the valuation attractiveness argument (7pp underperformance) is real but requires Abel to (1) agree the stock is cheap, (2) have no better use for the capital, and (3) execute >$1B in a single quarter within 7 months. OxyChem proves point (2) is not trivially satisfied — Abel found a use. For point (1), Abel has not publicly connected the 2025 underperformance to buyback attractiveness. The quarterly threshold of $1B is not onerous for a company with $369B cash, but the quarterly cadence means Abel must act in Q1, Q2, or Q3 2026. Q1 2026 is already underway with OxyChem integration completing. The base case remains that Abel is a net-acquirer of businesses, not a buyback executer, and 7 months is insufficient to produce a regime change absent a specific catalyst. Settling at 15% which reflects the valuation floor risk and timeline, discounted by the strong acquisition-preference signal.

Updating from the prior 0.23 with FY2025 full-year data. The prior included some probability that Abel might quietly resume small buybacks in Q4 2025 — this is now confirmed zero. The OxyChem acquisition (Jan 2, 2026) is the key new signal: Abel chose a $9.5B acquisition as his capital deployment vehicle of choice. This is consistent with his stated hierarchy (acquisitions above buybacks) and provides revealed preference evidence. The 7pp BRK.B underperformance in 2025 is the main bull argument: if the stock is cheaper relative to intrinsic value, the buyback hurdle is more achievable. However, Abel has not commented on this, and BRK.B at ~$520-540 is not in distressed territory. For the market to resolve YES by Q3 2026, Abel would need to execute in Q1, Q2, or Q3 2026. Given OxyChem just closed, I estimate Q1 is unlikely (capital deployment focused on integration). Q2-Q3 remain open but require a catalyst. Slight downward adjustment from prior, settling around 17%.

The prior 0.23 now looks too high given FY2025 confirmation. The key factors driving a downgrade: (1) zero buybacks confirmed across four quarters, (2) OxyChem acquisition demonstrates Abel's capital allocation preference, (3) shareholder letter contained no buyback framework or commitment, (4) 7 months remaining is meaningful but not large. The upside factors are: (1) 7pp underperformance creates valuation attractiveness, (2) $369B cash means no capital constraint, (3) insurance headwinds reduce need to hold defensive cash. On balance, the negative evidence from actual behavior outweighs the theoretical valuation attractiveness. Abel has had multiple opportunities to resume buybacks — Q3 2025 was a record earnings quarter — and he chose zero. A pattern is emerging. The 5-criterion capital discipline framework sounds like it could justify buybacks, but Abel keeps finding better uses for the capital. 15% captures the real but small probability of a surprise Q2-Q3 2026 buyback program.

Taking the highest view in this ensemble to stress-test the bull case. The 7pp underperformance in 2025 is the headline argument: Berkshire's intrinsic value likely grew at ~5-7% annually (driven by operating earnings growth + cash yield), while BRK.B stock grew less. This widening gap is exactly the type of signal Buffett used to activate buybacks historically. Abel's stated philosophy is 'identical' — meaning he should theoretically activate buybacks when the stock trades below intrinsic value. $369B cash means no capital constraint. The 1% excise tax is a cost, not a barrier. With 7 months remaining, Abel could execute in any of Q1-Q3 2026. If OxyChem marks a period of digestion without another major acquisition, buybacks become the highest-returning capital use in Abel's hierarchy. However, I cannot get higher than 19% because Abel's actual behavior (zero in four quarters) is the strongest predictor, and the acquisition-preference signal from OxyChem is genuine. 19% is the ceiling for the bull case without additional positive catalysts.