Key Points
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Greg Abel took over the helm of Berkshire Hathaway at the start of 2026.
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The new CEO's first big move was to buy Taylor Morrison Home during a housing industry downturn.
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Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) has undergone a massive leadership transition, with Greg Abel taking over as CEO from Warren Buffett. Abel is expected to be a more hands-on leader, actively participating in managing the company's vast portfolio of owned businesses. His first big acquisition hints at what he's looking to do. But don't read too much into the timing of the move.
Taylor Morrison Home was attractively priced for a reason
Wall Street didn't have to wait long to see how Greg Abel would run Berkshire Hathaway. In May, roughly five months after he took the top job, Berkshire Hathaway announced that it had agreed to pay $6.8 billion to buy Taylor Morrison Home. Abel believed he was getting an attractive price, and Warren Buffett approved of his handling of the deal.
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But it is important to remember that the best buying opportunities often come when businesses and sectors are out of favor. And that's exactly the situation in the housing market right now, with the pending home sales index hovering near the lowest levels in its history and 36% below its 2021 high. But Abel isn't likely trying to time a housing upturn with the Taylor Morrison Home acquisition.
In fact, Abel was very clear that this was a strategic acquisition. He stated specifically that he hopes to "unify our site-built homebuilding operations into a combined platform." The truth is, Berkshire Hathaway is probably just early, but that's the point. This is why Taylor Morrison Home was an attractive acquisition.
Berkshire Hathaway has plenty of time
What's important to keep in mind here is that Berkshire Hathaway doesn't think in days; it thinks in decades. And, notably, at the end of the second quarter of 2026, the company had roughly $365 billion in cash on its balance sheet. This isn't a situation where Abel needs the housing market to turn around right now for Berkshire Hathaway's acquisition of Taylor Morrison Home to work.
The story is really about making Berkshire Hathaway a better business in the years ahead by integrating its homebuilding operations. That's likely to be a multi-year effort, and Taylor Morrison Home is just one piece of the bigger story. And it has nothing to do with trying to time a housing market upturn. "Just being early" isn't bad when you run a diversified, financially strong business like Berkshire Hathaway. In fact, the ability to "just be early" is what gives Berkshire Hathaway an edge, as Abel looks to focus more on the company's operating businesses than his predecessor, who famously and successfully focused most of his attention on the investment side of the business.
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.