Berkshire Hathaway B (BRK.B): A Case for Long-Term Value Investing in a Volatile Market

In an era of market turbulence and shifting investor sentiment, Berkshire Hathaway B (BRK.B) stands as a testament to the enduring power of long-term value investing. While the S&P 500 has surged by 17.68% over the past 12 monthsBerkshire Hathaway (BRK.B) Performance History & Total Returns^[1], BRK.B has lagged with a total return of just 7.39%BRK.B vs S&P 500: Performance Comparison Chart^[2]. Yet, this short-term underperformance masks a deeper narrative: BRK.B's 10-year compound annual growth rate (CAGR) of 14.16%SPY vs. BRK-B — Investment Comparison Tool^[3] aligns closely with the S&P 500's 14.51%Warren Buffett Portfolio (2023 Q4) - Berkshire Hathaway Holdings^[4], underscoring its resilience as a compounding machine. For investors seeking stability amid uncertainty, BRK.B's strategic positioning and Warren Buffett's time-tested philosophy offer compelling reasons to remain bullish.

The Short-Term Lag: A Product of Market Dynamics, Not Fundamentals

The recent divergence between BRK.B and the S&P 500 stems from structural factors rather than operational weakness. The S&P 500's outperformance in 2023–2025 has been fueled by speculative bets on high-growth tech stocks, which have surged amid AI-driven optimismThree Timeless Investment Lessons From Warren Buffett’s Annual Letter^[5]. In contrast, BRK.B's portfolio—anchored by Apple (49.54% of holdings), Bank of America, and Coca-Cola—has prioritized durable cash flows over speculative gainsBerkshire Hathaway's Strategic Portfolio Shifts in 2023^[6]. While this approach has left BRK.B exposed to the rapid revaluation of tech stocks, it has also insulated the conglomerate from the volatility inherent in high-multiple sectors.

Buffett's 2024 letter to shareholders acknowledged this tension, stating, “We're not chasing fleeting trends. Our focus is on businesses that generate consistent returns, even if they don't make headlines”Warren Buffett’s 2025 Portfolio Moves: What Berkshire Hathaway Is Buying and Selling^[7]. This philosophy is evident in Berkshire's 2023–2025 portfolio shifts, where the company trimmed stakes in overvalued positions like Apple (selling over 600 million shares) while increasing exposure to undervalued sectors such as consumer staples and energyHow Buffett’s Investment Strategy Has Shifted in 2025?^[8].

Strategic Resilience: Buffett's Playbook in Action

Berkshire's strategic adaptability is a cornerstone of its long-term success. As of Q2 2025, the company holds $325.2 billion in cash reserves, with 88% allocated to U.S. Treasury securitiesBerkshire Hathaway’s Second Quarter 2025 Portfolio^[9]. This liquidity buffer, far from signaling caution, reflects Buffett's opportunistic mindset: “Cash is a weapon, not a goal,” he emphasized in 2024Investment Lessons from Warren Buffett in 2025^[10]. By maintaining a high cash balance, Berkshire positions itself to capitalize on market dislocations, a strategy that served it well during the 2008 financial crisis and the 2020 pandemic sell-off.

Recent portfolio additions, such as UnitedHealth Group, Nucor, and Lennar-A, further illustrate this approachBerkshire Hathaway's 2024: 6 Remarkable Aspects^[11]. These investments target sectors with strong cash-generative potential—healthcare, construction, and real estate—while avoiding overhyped industries. Buffett's foray into Japan, with stakes in five major trading companies (Itochu, Marubeni, etc.), also highlights his global perspective. These holdings, acquired at attractive valuations, align with his preference for “wonderful businesses at fair prices”.

The Buffett Edge: Compounding and Capital Allocation

At the heart of BRK.B's enduring appeal is Warren Buffett's mastery of capital allocation. His 2024 letter reiterated a core principle: “Investing in subpar businesses—even if cheap—leads to subpar results”. This discipline is evident in Berkshire's 3-year CAGR of 18.95%, which outpaces the S&P 500's 16.89%. By focusing on companies with “economic moats”—such as Apple's ecosystem or American Express's premium brand—Buffett ensures that Berkshire's portfolio benefits from compounding over decades.

Moreover, Buffett's emphasis on patience and long-term thinking mitigates the risks of market timing. While short-term volatility may erode confidence, his track record demonstrates that disciplined investors who hold BRK.B through cycles reap outsized rewards. As he noted in 2025, “The goal is to own businesses that grow in value, not to time the market”.

Why BRK.B Remains a Compelling Buy

For investors navigating today's uncertain landscape, BRK.B offers a unique combination of stability and growth potential. Its underperformance in 2023–2025 is a temporary blip, not a sign of obsolescence. The company's strategic shifts—reducing overvalued positions, increasing cash reserves, and diversifying into resilient sectors—position it to outperform in the next market cycle.

Furthermore, Buffett's philosophy of “buy wonderful businesses, not cheap stocks” ensures that Berkshire's portfolio remains resilient to macroeconomic shocks. With a 10-year CAGR nearly matching the S&P 500 and a balance sheet fortified by $325 billion in liquidity, BRK.B is well-equipped to navigate volatility while delivering compounding returns.

Conclusion

Berkshire Hathaway B may not be the flashiest stock on the market, but its long-term performance and strategic adaptability make it a cornerstone of a diversified portfolio. In a world where short-term trends dominate headlines, BRK.B's focus on durable value and compounding growth offers a refreshing counterpoint. For investors seeking stability and resilience, the lessons of Warren Buffett's 65-year track record are clear: patience, discipline, and a focus on quality will always prevail.