The Berkshire Beat: October 31, 2025 🎃

All of the latest Warren Buffett and Berkshire Hathaway news!

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It’s that time again: Berkshire Hathaway will release its Q3 2025 earnings report bright and early tomorrow morning at 8 a.m. ET.

And *gulp* this will actually be the last 10-Q of the Warren Buffett era, with his final three months as CEO to be covered in next year’s 10-K.

Andrew Bary over at Barron’s predicts a “stellar” quarter for Berkshire — with operating profits set to increase by more than 20% on strong insurance results and a 4% boost to the conglomerate’s book value.

That said, at least one other Wall Street watcher sees more tricks than treats on the horizon. (Albeit, not necessarily in this Q3 report.) Meyer Shields, managing partner of Keefe, Bruyette & Woods, downgraded Berkshire’s stock to “underperform” and slashed its target price from $740,000 to $700,000 for Class A shares.

If you’ve read this newsletter for any length of time, you know that I don’t pay much mind to analysts and their stock price prognostications. I haven’t the foggiest idea if KBW’s gloomy outlook is on the mark — but I’m certainly not losing any sleep over any upcoming bumps in the road. In the short term, Berkshire’s share price piques my interest only insofar as it might unlock more aggressive buybacks.

But, to be fair, Shields did flag several valid question marks that hang over Berkshire heading into the new year. Like the fact that GEICO’s profit margin is almost certain to come back down to earth after several blowout quarters. The auto insurer posted a mind-boggling 83.5% combined ratio last time out — meaning that 16.5 cents of every dollar in premiums flowed to the bottom line as profit. Sustaining such a breakneck pace of profitability is pretty unlikely. Especially since, he added, the major inflation-fueled rate increases are largely in the rearview mirror.

The KBW report also highlighted a potentially softer pricing environment for reinsurance after this mild hurricane season, less investment income as short-term interest rates continue to fall, BNSF Railway suffering from reduced trade with Asia, and smaller clean energy credits for Berkshire Hathaway Energy.

Time will tell, I suppose. Though they all sound reasonable enough on the face of it.

One line in the downgrade, though, struck a nerve. KBW noted that Buffett’s retirement will hurt Berkshire — fair enough — but then added that “what we see as unfortunately inadequate disclosure will probably deter investors once they can no longer rely on Mr. Buffett’s presence”.

I don’t think there’s much question that shareholders (and the market at large) cut Berkshire some slack due to Buffett’s sterling reputation. How many companies could sit on $300+ billion of cash without drawing too many complaints? People really trust Buffett and extend him a measure of latitude that other CEOs can only dream about.

But the “unfortunately inadequate disclosure” sure feels like Wall Street’s opening salvo against Berkshire’s unique culture in the post-Buffett era. I can’t think of many (any?) other companies that do a better job of disclosing what does and does not matter to shareholders than Berkshire.

Dismissing that as inadequate simply because Buffett and co. skip out on earnings calls and financial guidance — instead preferring to release relevant information to all shareholders at the same time — seems to miss the point entirely.

And, I fear, it’s just the start of a sustained effort by Wall Street firms to reshape Berkshire in their own image once Buffett is no longer the one calling the shots.

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And, now, the latest news and notes out of Omaha…

The Wall Street Journal confirmed (via Warren Buffett’s assistant) that Greg Abel will indeed write Berkshire Hathaway’s annual letters from now on. 😢 But, happily, we have at least one more bit of Buffett writing to look forward to — his traditional Thanksgiving letter to his children and shareholders, set for November 10.

Howard Marks dropped a shoutout to Warren Buffett in his new memo, A Look Under the Hood. Drawing from a recent sit-down with the board and brass of a major state pension fund, Marks explored the thorny choices facing these behemoths — from calibrating risk tolerance to balancing actuarial vs. relative returns. And, in his discussion of risk, he called on Buffett to make his point. “There’s no intrinsic reason for long-term investors to be concerned with volatility (as distinguished from the risk of permanent loss),” wrote Marks. “Warren Buffett famously says he’d ‘rather earn a lumpy 15% return than a smooth 12%’. Why wouldn’t everyone?”

If you happen to fire up “The Shining” this spooky season, keep an eye out for this Berkshire-related easter egg. In one scene, the Overlook Hotel’s head chef (played by Scatman Crothers) lounges in bed watching television. And his set just happened to be tuned into a news report from WPLG, a Miami-based station now owned by Berkshire. At the time of filming, WPLG belonged to the Washington Post Company (in which Berkshire held a large stake). Another note of interest: Katharine Graham rebranded the station’s call letters to WPLG in 1970 as a tribute to her late husband, Philip L. Graham.

Jazwares will be the official worldwide plush licensee of the FIFA World Cup 2026, which will be played in North America next summer. “The FIFA World Cup is more than a competition,” said senior vice president Sam Ferguson. “It’s a stage where history is written and the world comes together. To see our creations become part of that story is an honor beyond measure.”

• Buffett once noted that a big part of Coca-Cola’s appeal is that it always shows up in places where people are happy. Like the Olympics, Disney Parks, and Berkshire AGMs (of course). And, with this World Cup deal, Jazwares seems to be treading the same path to build share of mind among customers.

Kraft Heinz chief marketing officer Todd Kaplan explained the power of brands at the Association of National Advertisers conference. “Product marketing is a push that drives a transaction,” he said. “Brand building is the pull. It creates intent and emotional connection over time. People tattoo brands on their body, not products.” Kaplan also shared an interesting statistic: When people are asked to draw ketchup, 97% of them draw Heinz. “That’s the power of memory structure,” he said.

• And it makes for one heck of a moat, too. “A strong brand is the best insurance policy for your business. It protects you when everything else changes. Brand building isn’t fluffy or nice to have — it’s an investment. It’s how you drive pricing power, trust, and growth that lasts.”

Sky News is back with a fresh update on Coca-Cola’s rumored sale of Costa Coffee, the British chain that it snapped up for £3.9 billion just four years ago. In a surprise twist, private equity heavyweight KKR has reportedly thrown its hat back into the ring after seemingly bowing out of the running back in August. The New York-based firm is now among a handful of suitors — including Bain Capital and TDR Capital — in active talks to purchase the coffeemaker. Interestingly, Sky says that Coke intends to retain ownership of Costa’s ready-to-drink portfolio (like canned iced coffee), which might explain why one insider expects Costa to fetch just £1.5 billion in any sale.

And, finally, a few odds and ends to finish off the week…

• On Monday, Berkshire sold 401,514 shares of Davita for $54.3 million. And while the filing does not mention the Share Repurchase Agreement between the two companies, it certainly seems like that was the catalyst for this sale. Berkshire now owns 44.98% of the dialysis provider, just under the agreed-upon 45% limit.

• On the same day, Berkshire also collected $3.6 million in quarterly dividends from Lennar.

• Apple recorded $27.5 billion in net income for the September quarter — with iPhone sales up 6% and Services up an even better 15%. Best of all, CEO Tim Cook expects the good times to keep on rolling through the holidays. “December quarter revenue [should] be the best ever for the company and for iPhone.”