Subject: Re: Buffett, Silver and Barron's
The Barron’s webinar, “Berkshire After Buffett” featured a Q&A with Andrew Bary (AB), Associate Editor of Barron’s, and Cathy Seifert (CS), Senior VP of CFRA. Here are a few tidbits from the webinar:

Challenges for Greg Abel
AB: Greg Abel faces many challenges including managing 50-60 subsidiaries, although only 10 really matter including insurance, energy, BNSF Lubrizol and Marmon. He also needs to retain key talent and recruit new talent to help him. Capital allocation will be key. Should he pay a dividend and do share repurchases? Should he be more open with investors? Do quarterly conference calls?

CS: Transparency should be improved. Disclosure at Berkshire is lacking given the size of the company. Berkshire should have a better capital allocation strategy given its cash, such as paying a dividend.

Dividends
AB: It has been Berkshire’s policy not to pay a dividend since it is more tax-efficient for shareholders. However, with $350 billion in cash and $40-$45 billion in earnings power, Berkshire will have to pay a dividend at some point in time, which could occur before Buffett’s death. Berkshire could easily pay a 2% dividend.

CS: Berkshire is in the minority of companies its size not to pay a dividend. There is a growing chorus for dividends.

Share Buybacks
CS: Berkshire has been sending a message that its stock is not undervalued since it has not done any share repurchases since 2024.

AB: With Berkshire now trading around 1.4 times book value based on an estimated $500,000 book value at 12/31/25, it will be interesting to see if any share repurchases have taken place.

P/E or PEG Ratio
CS: Berkshire’s growth has slowed so its PEG ratio (P/E to growth) is higher than many tech companies.

AB: Believes the stock is reasonably valued on a P/E basis. If you consider the “look-through” earnings of its equity investments, the P/E falls into the high-teens. Berkshire is a very defensive stock given the strength of its balance sheet and diversified earnings stream. There are few better “sleep at night” stocks.

CS: The Buffett premium has evaporated. Todd Comb’s departure weakens the bench. Berkshire needs to highlight its bench better.

Equity Portfolio Management
AB: Don’t know how the equity portfolio will be managed going forward…whether Greg will be calling all the shots? Are there any fixed-income managers?

CS: Don’t believe they will be running off the equity portfolio by selling all the positions. The portfolio could be managed externally.

AI Investments
AB: Buffett is a 20th century investor. Wouldn’t look at Berkshire for your AI investments. However, it is likely Ted Weschler recently purchased $4-$5 billion of Alphabet for Berkshire. It was a good purchase but undersized for Berkshire’s portfolio.

CS: Greg has an industrial background and will likely make investments in that area.

Greg’s Letter to Shareholders
AB: Expect his first letter to shareholders to be released around Feb. 21st. Expect it to discuss capital allocation, his circle of competence, potential energy and industrial acquisitions all done in a tone of humility. Expect him to say that Berkshire’s best days are not behind them.

Kraft Heinz
AB: Kraft Heinz turned out to not be a good investment, but it would be a mistake to sell it at these levels with a P/E around 10 and a 7% dividend yield.

CS: Berkshire has already written down part of its investment in KHC. It was not a good investment. Buffet thought the business was more durable than it was. There have been lots of changes in the packaged food industry.

Insurance
CS: The insurance industry goes through pricing cycles. Travelers recently reported earnings and had better underwriting profitability due to the mild hurricane season in 2025.

P&C insurance stocks were up today following the winter storms that will likely push up insurance pricing.

Likes Progressive better than GEICO, which is a technology laggard. Todd Combs leaving the company also places a cloud over GEICO. Underwriting expenses will be higher as advertising expenses have been rising at GEICO. Trump may rattle the markets with his remarks as he has done in other financial sectors. Self-driving vehicles will shift insurance from individuals to manufacturers, but it could take a generation for that shift to be completed give the small uptake so far in self-driving cars.

AB: GEICO is very profitable now but could face political heat on the state level.

CS: Progressive had to set aside excess profits in Florida to return to policyholders.
With Ajit Jain in his mid-70’s, need to define a succession plan for him.

Capital Allocation
AB: With cash building and no significant equity purchases, dividends or share repurchases and minimal acquisition activity, Berkshire may have to consider a special dividend or Dutch auction tender at some point.

Berkshire’s Valuation
CS: Still rates the stock a Hold due to slowing growth and expects it to be a market performer in 2026.

AB: Given current reasonable valuation, rates the stock an outperform and expects the stock to end 2026 up better than 10% at $800,000.