An Omaha Sunset
Warren Buffett steps down as Berkshire Hathaway CEO... A big change in the American business world... Our Whitney Tilson's expert take... Oil prices are tumbling... The politics involved... Deals or no deals?...
'The time has arrived,' Warren Buffett said...
Sitting onstage in an arena in Omaha, Nebraska near the very end of Saturday's 60th annual meeting of Berkshire Hathaway (BRK-B), Warren Buffett delivered the news: He wanted to step down as CEO and would recommend the move at a board of directors meeting on Sunday.
The concept wasn't new. Buffett wrote in his annual shareholder letter earlier this year that "it won't be long before Greg Abel replaces me as CEO and will be writing the annual letters." As I (Corey McLaughlin) wrote in our February 24 edition, "So, soak in Buffett's wisdom while you can."
But few expected the timing and delivery of Buffett's big announcement.
Outside of himself and two of his children, Howie and Susie, who sit on Berkshire's board, it's not clear how many other people knew about Buffett's plans to break the news for the first time in public and on live television on CNBC.
Abel didn't even know, Buffett said. Neither did the nine others on the Berkshire board who weren't Buffett's offspring... And the 94-year-old dropped the news with five minutes left of an hourslong event.
"That's the news hook for the day," he said, followed by one of the folksy laughs he has become known for over the decades. "Thanks for coming." After a multiminute standing ovation quieted, he joked that the "response can be interpreted in two ways. But I'll take it as positive."
Yesterday, the 11-member Berkshire board followed up by unanimously accepting Buffett's recommendation for Abel to take over as CEO on January 1, 2026. Buffett will remain chairman, with the expectation that his son Howard will take over as chairman after his death.
So, the "Oracle of Omaha" is not totally going away from the operation that he built into an icon of the American business and investment industry. But clearly, he is heading into the sunset.
Stansberry's Investment Advisory lead editor Whitney Tilson has thoughts...
For those who don't know, Whitney has known Buffett personally for decades and, coincidentally until this year, Whitney had attended every in-person Berkshire Hathaway annual meeting since the late 1990s. As he shared in his free daily newsletter today...
Other than my parents and my wife, Buffett and his lifelong business partner, Charlie Munger, who passed away in November 2023, have had the biggest impacts on my life.
Whitney wrote about this relationship in a terrific issue of our flagship Stansberry Investment Advisory newsletter... And here's the deal: Basically, Whitney is a Berkshire expert like no one else.
My own example: I remember the time I opened Poor Charlie's Almanack (a great book on investing and life lessons) for the first time and saw Whitney's caricature. He also appears on the acknowledgments page for writing the third chapter, titled "Mungerisms: Charlie Unscripted."
There's nobody else I would want to hear from on the Buffett news than Whitney. Today, he sat down with our Director of Research Matt Weinschenk for a special conversation about the news of Buffett's upcoming retirement as Berkshire CEO...
You can watch this briefing for free here on our YouTube page.
Whitney discussed Buffett's legacy... shared personal stories... and offered his outlook on what Buffett stepping down means for the company, what to know about Abel and others at the top of Berkshire leadership, and why Buffett decided to make this move now.
There's a lot to talk about, including big questions like what Berkshire will do with its roughly $340 billion cash pile moving forward... who will be the conglomerate's primary stock-picker... and what other changes people should expect as Buffett steps aside...
As Berkshire was trading down around 5% earlier today, Whitney offered his take on the current valuation of shares, which he recommended to Investment Advisory subscribers back in December 2023. The position was up 50% as of Friday's close.
Existing Investment Advisory subscribers and Stansberry Alliance members can find Whitney's initial recommendation of Berkshire and the story of how he came to meet Buffett here.
And if you aren't already a subscriber, learn how to get access to all the details – of Berkshire and Whitney's latest recommendations – with a subscription to our flagship Investment Advisory right here. Either way, be sure to check out Whitney's free video with Matt.
Moving on, oil prices have tumbled again... Here's why...
Also on Saturday, the OPEC+ oil cartel agreed to increase production among eight of its member nations for a second straight month. The group's plans call for another 411,000 barrels per day in June.
That's despite prices that have already seen the biggest monthly loss since 2021, plus growing expectations for weaker oil demand due to President Donald Trump's trade bargaining.
Brent crude – the international benchmark – traded down almost 2% to just above $60 per barrel today. That's its lowest level since prices were still recovering from the depths of the COVID-19 panic in February 2021.
The same goes for the price of U.S. benchmark West Texas Intermediate ("WTI"), which was also down nearly 2% to $57 per barrel following the weekend announcement.
So, what gives? Why is OPEC increasing oil supply while prices were already falling and questions about demand are out there?
Formally, in a post-meeting joint statement, OPEC+ members explained that the fundamentals of the oil market were healthy and inventory is low.
But there's politics involved, of course...
OPEC kingpin Saudi Arabia is dictating policy, it appears, for multiple reasons.
As we shared in our April 14 edition, citing Stansberry Venture Value editor Bryan Beach's update on the story...
There's a lot going on here. We'll spare you much of the Gulf States drama. All you need to know is that for months, Kazakhstan and Iraq have been producing far more oil than they're allowed to and cashing in by selling these excess barrels in the open market. Such moves both weaken the OPEC alliance and harm OPEC partners...
In short, the cartel's big boy – Saudi Arabia – is sending a message to its smaller OPEC partners. Helima Croft, head of global commodity strategy at investment bank RBC Capital Markets, said...
[This] move appears to be more of a controlled sweating... We think a desire by the OPEC leadership to send a warning signal to Kazakhstan, Iraq, and even Russia about the cost of continued overproduction underlies the decision.
Analysts surmise another reason for the production hike is Trump pressuring OPEC into price-squeezing Iran out of the export market. A Bloomberg article explained it this way...
Additional crude from OPEC+ may also help Trump in his pledge to choke off oil exports from Iran, [Saudi Arabia's] regional nemesis. His administration has promised to renew its "maximum pressure" campaign to rein in [Iran's] nuclear program, and squeeze the Islamic Republic's exports by 90% to a mere 100,000 barrels a day.
Meanwhile, Trump plans to visit Saudi Arabia this month for meetings with Middle East leaders. He says the White House is negotiating with Iran on a new nuclear deal... that any country buying oil from Iran won't be allowed to do business with the U.S... and that he wants the war in Ukraine to end.
Put it all together, and it looks like the OPEC+ moves are part of the outcome of a tighter relationship between Saudi Arabia and the White House.
That said, a lower oil price due to increased foreign supply isn't great news for U.S. energy producers, even if it could be for consumers.
Also, one of those consumers is the U.S. government... As prices stay depressed, the U.S. government is refilling the Strategic Petroleum Reserve, which has reached almost 399,000 barrels at last count. That's its highest level since October 2022, though still about 40% below capacity.
What else is happening this week...
Another 20% or so of S&P 500 Index companies report earnings this week, including notables like Ford Motor (F) and Palantir Technologies (PLTR) after today's close... chipmaker Advanced Micro Devices (AMD) on Tuesday... and oil company ConocoPhillips (COP) on Thursday.
And it's that time again... for another Federal Reserve meeting. The central bank's latest two-day policy meeting concludes on Wednesday and will be followed by Fed Chair Jerome Powell's usual press conference.
The prevailing expectation is for the Fed to keep interest rates right where they are... But as usual, investors will be looking for clues about future central bank decisions. What they hear tends to move markets one way or another.
Wall Street will pay close attention to Powell's post-meeting comments. (Here's betting on whether he'll be asked to respond to Trump's call for lower rates on the first or second question from reporters.)
And we'll stay tuned to the latest on tariffs and trade...
Deals or no deals?...
As we've been saying, the market has priced in the expectation of major trade deals. That makes sense, because Trump and the White House have essentially been promising them constantly.
The S&P 500 closed higher for the ninth straight day on Friday, the first such streak in 20 years. It's a strong sign of a "relief rally" since Trump's backpedaling from his "Liberation Day" announcement.
Today, the major U.S. stock indexes finished slightly lower. Meanwhile, gold moved higher by almost 3% above $3,300.
As more days pass without any formal trade agreements, Mr. Market's patience may run thin... And that's before discussion of the deals' details, of course.
In sum, don't be surprised if we see more tariff-related volatility ahead.
New 52-week highs (as of 5/2/25): Alpha Architect 1-3 Month Box Fund (BOXX), Berkshire Hathaway (BRK-B), CBOE Global Markets (CBOE), CME Group (CME), Dimensional International Small Cap Value Fund (DISV), iShares MSCI Germany Fund (EWG), iShares U.S. Aerospace & Defense Fund (ITA), Lonza (LZAGY), TransDigm (TDG), Travelers (TRV), Vanguard FTSE Europe Fund (VGK), VeriSign (VRSN), and W.R. Berkley (WRB).
In today's mailbag, more thoughts on tariffs... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"We knew it was going to be rough [with tariffs]. Trump said it was going to be rough, but how rough? Who knows. He's disrupting lopsided international trade deals that have been going on for scores of years while the free traders insist on calling it free trade. It's never been free trade. The Covid crash is a favorite comparison topic when discussing the current economy and what the future holds but it was by and large a 'V' shaped recovery, and we survived it. We'll survive this and when the dust settles, we'll be better off for it." – Subscriber Greg M.
All the best,
Corey McLaughlin
Baltimore, Maryland with Nick Koziol
May 5, 2025