Better Berkshire Hathaway Stock: Visa vs. Chubb Limited

Group 1: Berkshire Hathaway's Investment Strategy - Berkshire Hathaway has significantly reduced its stock holdings, including selling half of its stake in Apple and all shares of HP and Snowflake, while increasing cash reserves to a record $277 billion, indicating a cautious approach in anticipation of a market downturn [1][2] - Berkshire did not sell any shares of Visa and increased its position in Chubb Limited, suggesting confidence in Chubb's growth potential compared to Visa [2][6] Group 2: Visa's Business Model and Performance - Visa operates a large card payment processing network, earning revenue primarily through merchant swipe fees, which range from 1.5% to 3.5%, and does not issue credit or debit cards itself [3][4] - From fiscal 2013 to fiscal 2023, Visa's revenue grew at a compound annual growth rate (CAGR) of 11%, while earnings per share (EPS) increased at a CAGR of 16%, with over 20% of shares repurchased in the past decade [4][5] - Analysts project Visa's revenue and earnings to rise by 10% and 17%, respectively, in fiscal 2024, but macroeconomic and regulatory challenges may impact its valuations [5] Group 3: Chubb's Growth and Stability - Chubb is the largest publicly traded provider of property, supplemental health, and casualty insurance, with a significant presence in 54 countries and territories, and it currently represents 2.4% of Berkshire's portfolio [6][7] - From 2016 to 2023, Chubb's revenue grew at a CAGR of 7%, and EPS rose at a CAGR of 14%, with consolidated net premiums increasing by double digits in the past three years [7] - In the first half of 2024, Chubb's consolidated net premiums and core operating income increased by 13% and 16%, respectively, driven by growth in property and casualty underwriting, life insurance, and investment income [7] Group 4: Investment Outlook - Chubb is viewed as a more resilient investment compared to Visa, with a cheaper valuation relative to its growth potential, making it likely to outperform Visa in the coming quarters [8]