Small investors rushed into Berkshire shares during dip even after their hero Buffett sets exit

CNBC

06-05-2025

Warren Buffett and Greg Abel walkthrough the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2025.
Retail investors poured more than $24 million into Berkshire Hathaway 's Class B stock on Monday, proving it's not just a Warren Buffett cult stock and providing a vote of confidence in incoming CEO Greg Abel.
Everyday traders sent about $24.4 million on balance into Berkshire's B stock during the session, marking the stock's highest sum of net inflows since 2016, according to Vanda Research.
The shares declined more than 5% on Monday for their third worst session in the last half-decade, as Buffett shocked the investing world on Saturday with his announcement that he intends to leave the chief executive role at year-end, and Abel set to take the reins.
Buffett's initial announcement came as tens of thousands of shareholders flocked to Omaha for the yearly gathering, which has become a tradition over Buffett's six decades helming the sprawling conglomerate. Shareholders idolize the "Oracle of Omaha," with meeting attendees sporting apparel featuring his likeness and waiting in long lines to purchase a plush toy of him.
"I think the time has arrived where Greg should become the chief executive officer of the company at year end," Buffett said near the end of Saturday's question-and-answer event with shareholders.
Buffett is seen as one of the most successful advocates of investing — specifically through a disciplined and value-focused lens — to everyday people. Monday's inflows may surprise some market observers, as conventional wisdom would suggest mom-and-pop traders would be uneasy with the longtime company leader stepping away.
Yet Monday's net inflows were more than three times to size of what was seen the previous Friday, underscoring the surge of interest in the stock following the news. It was also the fourth-largest one-day net haul for the stock going back to when Vanda began collecting data in 2014. Date Net flows (in U.S. dollars) 6/24/2016 41543725 8/24/2015 26606101 12/9/2014 25732006 5/5/2025 24356196 1/4/2016 22001366
Now, investors are wondering what's next for Berkshire under Abel, who hasn't shown an ability to pick stocks exceptionally well, the trait that made Buffett a rock star to the regular Joe investor. But they may be appeased by Buffett's comment that he plans to "hang around" and after the board voted to keep him on as chairman.
Buffett, who is Berkshire's largest investor with more than $160 billion worth of stock, also said he wouldn't sell a single share of the company he built from a failing textile company into a $1.2 trillion titan. He showered Abel with praise during the meeting, which may have helped ease jitters among attendees about the path forward. Warren Buffett does a walkthrough of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2025.
"The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg's management than mine," the 94-year-old said.
Buffett's future has loomed particularly large over shareholders since the passing of longtime friend and business partner Charlie Munger in 2023. He announced in a shareholder letter released in February that he began walking with a cane and that it "won't be long" before Abel would take over writing the annual memo.
Despite Monday's downturn, shares are still up more than 13% in 2025. The S&P 500 , which Berkshire has run circles around over the last 60 years under Buffett, has fallen more than 4% this year. Stock chart icon Berkshire Hathaway, Class B shares
Retail investors, who helped bid the stock up to a record the Friday before the meeting, may also be banking on Berkshire being a safe haven if tough economic times are ahead. Berkshire has more than $330 billion in cash on hand, enough to buy all but 23 members of the S&P 500 outright.
And perhaps the little guy is betting Buffett, who in the past has done his biggest buying when others are the most fearful, has one last bargain deal in him before he hangs it up.