When the Trump administration began implementing drastic tariffs on its major US trading partners in April, investors felt a massive disruption in the market, dumping US risky assets and running for cover. They piled up cash, gold and assets they believed could provide ports to the storm.
One of them happened to me Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B)one of the world’s largest conglomerates run by perhaps the world’s best investor, Warren Buffett. Berkshire stocks rose almost 10% compared to the broader benchmarks (as of June 4th) S&P 500Approximately 2% gain. Berkshire stocks reached an all-time high earlier this year. Will you buy stocks again today?
Apart from Buffett and his strong investment team, one thing investors think likes about Berkshire is the diversity of businesses under the umbrella of a large conglomerate. Berkshire operates not only a large equity portfolio, but also a large insurance business as the owner of GEICO. The company also owns energy assets, the Burlington North Santa Fe Railroad, and the mortgage business, among others.
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While some of these sectors may be difficult to operate on their own, together they transformed Berkshire into a Juggernaut that provided diversity and generated more than $89.5 billion in revenue in 2024. It also received operating profit of $47.4 billion.
Another reason investors see Berkshire as a flight to safety is because of the company’s large cash storage. Combined, Berkshire’s investments in cash, cash equivalents, short-term US financial investments and fixed-maturity securities amounted to an astounding $357 billion. Berkshire reportedly currently owns around 5% of the Short-Term Treasury bill market. The huge pile of cash gives Berkshire a huge margin and also gives the breast of war if opportunities arise in a market that Berkshire finds persuasive.
Now, after a strong run, it is always important to look at the stock ratings. One way investors like to cherish Berkshire is the frequent way investors value banks and insurance stocks.
As mentioned above, Berkshire stocks have recently traded slightly on less than two TBV times. This is down from the highs that stocks reached earlier this year, but above the company’s five-year average.
Berkshire stocks seem a little expensive right now, but I think long-term investors will do well by owning it. One is Buffett And his team has kept Berkshire lasting for a long time. This means it can function well throughout the entire economic cycle, including the more demanding parts.
Although Berkshire’s stock portfolio is exposed to growth stocks such as technology and artificial intelligence, management clearly believes in oil and gas, and may consider it a finite resource. Not only does the company own and operate the energy business, but Berkshire has big stakes on large domestic oil and gas producers Occident Oil and Chevron. These stocks should work well if the price of oil, which trades at a low $60 per barrel, ultimately rises.
The investor is 94-year-old Buffett. Preparing to retire At the end of 2025, after over 60 years of work. While Omaha’s oracles cannot be exchanged, the next CEO, Greg Abel, is more than capable. Without the Buffett brand, I think Berkshire might try to seduce investors by returning more capital to shareholders, even dividends that Berkshire has never paid before, and perhaps even dividends.
So despite the departure of Buffett, who chairs the company’s board of directors, it is not all fate and darkness. There is still a lot more to be looking forward to, investors.
Consider this before purchasing stocks at Berkshire Hathaway.
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Bram Berkowitz There is no position in any of the stocks mentioned. Motley Fools have been working and recommending Berkshire Hathaway and Chevron. Motley Fools recommend Western oil. To Motley’s fool Disclosure Policy.
