Key Points
With inflation heating up and valuations stretched to dot-com era levels, a market correction is a possibility in the coming year.
In every down year since 2000, Berkshire Hathaway has outperformed the S&P 500 -- often by a wide margin.
Berkshire's $400 billion cash war chest positions it to make opportunistic deals during a crisis, just like it did in 2008.
- 10 stocks we like better than Berkshire Hathaway ›
With the S&P 500 and Nasdaq Composite hitting record highs, many investors are looking to add to their positions, fearing they'll miss the rally. But before you buy another high-flying tech stock, consider what happens if the bottom falls out.
Because, while I'm not saying it will happen, it wouldn't be the first time. And with inflation heating up and stretched valuations across the market, it's a real possibility in the coming year. At a time like this, one of the smartest places you can park $1,000 is Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB).
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: The Motley Fool.
Berkshire's track record in down markets speaks for itself
Berkshire is built to handle major corrections and even crashes -- history proves that.
Take a look at the table. Since 2000, every year the market was down, Berkshire outperformed, often by a large margin.
| Year | Berkshire Hathaway Total Return | S&P 500 Total Return |
|---|---|---|
| 2000 | 26.6% | (9.1%) |
| 2001 | 6.5% | (11.9%) |
| 2002 | (3.8%) | (22.1%) |
| 2008 | (31.8%) | (37%) |
| 2018 | 2.8% | (4.4%) |
| 2022 | 4% | (18.1%) |
| Average | 0.7% | (17.1%) |
Data source: Berkshire Hathaway's 2024 annual letter to shareholders.
Why Berkshire is built for a downturn
Berkshire has a diversified, cash-generating core business that, while not flashy, protects the company when the market heads south. And its equity portfolio consists of companies that are equally recession-resistant.
But perhaps most reassuring of all, Berkshire's nearly $400 billion war chest can -- and will -- be deployed during a crisis. That means, just as in 2008, the conglomerate will be able to make deals that few companies can and handily beat the market in the years after the crash.
Should you buy stock in Berkshire Hathaway right now?
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $468,861!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,445,212!*
Now, it’s worth noting Stock Advisor’s total average return is 1,013% — a market-crushing outperformance compared to 210% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of May 15, 2026.
Johnny Rice 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
