Core Viewpoint - Warren Buffett's retirement raises concerns about Berkshire Hathaway's future performance, but the company is expected to continue growing due to its strong fundamentals and value-oriented investment strategy [4][11]. Group 1: Underperformance Analysis - Over the past 12 months, Berkshire Hathaway's stock increased by 7.4%, underperforming the S&P 500, which rose by 16% [2]. - The primary reason for this underperformance is Buffett's announcement of his retirement, leading to uncertainty about the company's leadership under Greg Abel [4]. - Berkshire's stock portfolio is valued at $295 billion, representing 29% of its total market capitalization of $1.03 trillion, raising concerns about potential mismanagement under new leadership [5]. Group 2: Investment Strategy and Performance - Berkshire Hathaway's conservative moves, including pausing buybacks and increasing cash reserves, suggest a cautious outlook on market valuations [6]. - Despite recent challenges, Berkshire's stock is considered reasonably valued, trading at 21 times its operating earnings for 2024 [7]. - From 2019 to 2024, Berkshire's operating earnings grew at a compound annual growth rate (CAGR) of 15%, demonstrating resilience amid various macroeconomic challenges [9]. Group 3: Future Outlook - The company is expected to maintain its value-oriented investment strategy under Greg Abel, focusing on stable cash generation from its core businesses [10]. - While Buffett's retirement may introduce some volatility, the company is believed to be well-positioned for long-term growth, making it a compelling investment opportunity [11].
Here's Why Berkshire Hathaway Stock Is a Buy Before November