--- title: "Should You Buy Berkshire Hathaway Stock, Even Though It's Down 10% Since Warren Buffett Announced Retiring as CEO?" description: "Berkshire Hathaway's stock has dropped 10% since Warren Buffett announced his retirement as CEO, underperforming the S&P 500. Despite this, analysts view the sell-off as a buying opportunity for long-" type: "news" locale: "en" url: "https://longbridge.com/en/news/247374923.md" published_at: "2025-07-05T10:04:50.000Z" --- # Should You Buy Berkshire Hathaway Stock, Even Though It's Down 10% Since Warren Buffett Announced Retiring as CEO? > Berkshire Hathaway's stock has dropped 10% since Warren Buffett announced his retirement as CEO, underperforming the S&P 500. Despite this, analysts view the sell-off as a buying opportunity for long-term investors. Berkshire's strong portfolio and record cash reserves position it as a defensive stock. The company's operating earnings have historically compounded, and there is potential for dividends under new CEO Greg Abel. Investors are encouraged to focus on the company's fundamentals rather than short-term market fluctuations. **Berkshire Hathaway** (BRK.A 0.98%) (BRK.B 0.98%) stock is down big since Warren Buffett announced that he would be stepping down as chief executive officer (but remain chairman) by the end of the year. Here's why the sell-off is a buying opportunity for investors looking for an ultra-reliable blue chip stock to hold for years to come. Image source: Getty Images. ## Growth stocks are back in style Berkshire Hathaway stock was on a tear to start the year -- hitting an all-time high on May 2 -- the day before its annual shareholder meeting in Omaha. But between that meeting and June 30, Berkshire fell 10%, compared to a 9.1% gain in the **S&P 500** (^GSPC 0.83%). BRK.B data by YCharts. That's a significant underperformance in a short period, to which Berkshire investors aren't accustomed. The stock has trounced the S&P 500 over the long term, with a 19.9% compounded annual gain between 1965 and 2024, compared to 10.4% for the index with dividends reinvested. Part of the reason Berkshire has been lagging the S&P 500 is changing investment sentiment. When tariff turmoil was rippling through markets, some investors gravitated toward companies with business models that could hold up well even if these tensions escalated. Berkshire is an ultra-safe stock to own regardless of the market cycle. This is because of its portfolio of controlled assets -- from its insurance businesses to ownership of the BNSF railroad, utility giant Berkshire Hathaway Energy, manufacturing assets, services and retailing businesses, and its positions in public companies like **Apple**, **American Express**, **Coca-Cola**, and more. But Berkshire has been extra cautious lately. In its first-quarter 2025 financial filings, Berkshire revealed a record $348 billion in cash, cash equivalents, and short-term Treasury bills. During the shareholder meeting, Buffett said that Berkshire was holding more Treasury bills than he would like, but stressed the importance of being patient and waiting for excellent investment opportunities. In this vein, Berkshire has become even more of a defensive stock, so it makes sense that investors gravitated toward it when volatility was spiking. The news that Buffett is stepping down as CEO, combined with investors looking for riskier, higher-potential-reward stocks and less defensive names, may explain why Berkshire has underperformed the S&P 500 by so much over the last two months. ## Berkshire is chock-full of compounding potential As a long-term investor, it's important to filter out the noise of market movements and understand that stock prices can do all sorts of things in the near term that have little to do with a long-term investment thesis. Earlier this year, Berkshire's stock price was driven by some investors rotating out of mega-cap growth stocks and into value stocks. But now, the opposite is happening, as some value stocks like Berkshire are selling off or underperforming the S&P 500 while mega-cap growth stocks like **Nvidia** and **Microsoft** are hitting all-time highs. It's not that Nvidia's and Microsoft's business models have changed between now and a few months ago. Rather, investors are willing to pay a premium price for future earnings growth, because the risk of tariffs slowing that growth has gone down considerably. Instead of focusing on which stocks are in and out of favor, a better approach is to identify excellent businesses and then decide if the price is reasonable. Buffett's preferred way to value Berkshire is by its operating earnings, which reflect how the businesses it owns are performing, rather than accounting for changes in market values. Berkshire's operating earnings have compounded over time as it has grown its controlled businesses and made savvy acquisitions. Insurance underwriting and investment income have been massive drivers of operating earnings. Underwriting earnings grow as premiums collected outpace claims paid, and investment income represents the return Berkshire gets on the sum of premiums collected that haven't been paid out in claims. Given the size and operational excellence of Berkshire's insurance businesses, paired with its other controlled businesses, the company has a clear path toward steadily growing operating earnings over time. As mentioned, Berkshire also has a massive cash position that it can use to make a strategic acquisition, accelerate growth in a controlled business, or buy shares in stocks at compelling prices. Another reason to buy and hold Berkshire is the potential for the company to pay dividends under its new CEO, Greg Abel. Buffett has long been against the idea of paying dividends, because he believes that Berkshire can earn a better return for shareholders by reinvesting profits rather than passing them along through dividends. And he's been right, given the long-term performance of Berkshire stock. But if Berkshire continues to hold a ton of cash and not buy back stock, it could make sense for the company to pay a dividend. ## Buying Berkshire for the right reasons When Berkshire was a smaller company, Buffett was able to flex his investing prowess and creativity to have a meaningful effect on the business through moves like acquiring Geico and buying Coca-Cola and American Express at dirt cheap prices. But today, Berkshire is so big that buying hidden-gem, undervalued companies wouldn't affect its stock performance. So Berkshire's big buys over the last 10 years have been opportunities hiding in plain sight -- like Apple. And with Buffett passing the torch to Abel, investors should focus more on Berkshire's operational advantages, rather than treating the company like a stock-picking hedge fund. All told, Berkshire is a great buy if you like the assets it owns, its cash position, and its competitive advantages. ### Related Stocks - [BRK.B.US - Berkshire Hathaway B](https://longbridge.com/en/quote/BRK.B.US.md) - [BRK.A.US - Berkshire Hathaway](https://longbridge.com/en/quote/BRK.A.US.md) - [07777.HK - XL2CSOPBRKB](https://longbridge.com/en/quote/07777.HK.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | OpenClaw 之父爆猛料：Meta 和 OpenAI 跪着抢人，小扎亲自求收购 | 在一场重磅播客访谈中，OpenClaw 之父 Peter Steinberger 透露，Meta 的扎克伯格和 OpenAI 的 Sam Altman 都在积极拉拢他，甚至扎克伯格亲自表示对 OpenClaw 的赞赏。两大科技巨头同时争抢人 | [Link](https://longbridge.com/en/news/275962731.md) | | OPEC 月报：1 月全球产油盟国产量大幅下滑，维持今明两年需求预测不变 | 受哈萨克斯坦、委内瑞拉及伊朗供应中断影响，OPEC+ 1 月日均产量环比锐减 43.9 万桶至 4244.8 万桶，远超市场预期。其中哈萨克斯坦因 Tengiz 油田停产贡献了过半降幅，但目前该油田已开始复产，供应冲击或为短期。尽管产量骤降 | [Link](https://longbridge.com/en/news/275613183.md) | | Myrmikan 创始人：黄金矿业股估值仍处低位，金价长期看涨 1.2 万美元 | 知名贵金属矿业股基金经理 Daniel Oliver 认为，黄金正处于大规模牛市的早期阶段。历史上市场曾迫使央行将黄金储备维持在资产负债表的三分之一至二分之一之间，这意味着金价应在每盎司 8395 美元至 12595 美元之间。由于长期美债 | [Link](https://longbridge.com/en/news/275467741.md) | | 踏雪游学长白山！与付鹏等金融大咖研讨 2026 资产配置风向 | 2026 年 3 月 4 日至 6 日，华尔街见闻将举办长白山论坛，邀请知名经济学家付鹏等金融大咖探讨 2026 年全球市场走势与资产配置。论坛将讨论即将发生的关键事件，包括全国两会和美联储议息会议。活动吸引了近 20 位高净值人士参与，名 | [Link](https://longbridge.com/en/news/275732493.md) | | 英格索兰｜8-K：2025 财年 Q4 营收 20.91 亿美元超过预期 | | [Link](https://longbridge.com/en/news/275811467.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.