Could Buying Berkshire Hathaway Stock Today Set You Up for Life?

Warren Buffett stepped down as CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) at the end of last year after an illustrious career. During his six-decade long stretch controlling the company and its capital allocation decisions, the conglomerate registered a jaw-dropping return of more than 5,000,000%. Early investors have crushed the S&P 500 index.

Berkshire today carries a gargantuan market capitalization of more than $1 trillion, and Greg Abel is now in the CEO role. Can buying shares of this business today set you up for life?

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Recent performance lags the benchmark

While the conglomerate's long-term return is phenomenal, the gains haven't been all that impressive in recent times. In the past decade, Berkshire shares have climbed 283% (as of Jan. 22). The S&P 500's total return of 337% is higher. This is a colossal entity, so naturally its ability to expand is more limited. It makes sense that the stock has underperformed the overall benchmark, given that it's somewhat of a proxy for the economy, but with much less exposure to the technology sector.

The challenge that Berkshire, Buffett, and now Abel have faced and will face is a growing cash hoard coupled with limited opportunities to deploy significant amounts of capital. It's hard to move the needle when the balance sheet had $382 billion in cash, cash equivalents, and short-term investments in U.S. Treasury bills as of Sept. 30. Higher valuations can also result in more patience when making capital allocation decisions, placing a drag on the stock's returns.

Berkshire is a defensive stock pick

Berkshire runs a diversified business with numerous segments. The company has a presence in insurance, railroads, energy, manufacturing, consumer products, retail, and services. These activities raked in $8.9 billion of net income in third-quarter 2025. With consistent profits and cash flow generation, these are low-risk operations.

Having exposure to a variety of end markets that are affected by many different variables introduces a natural buffer regardless of economic conditions. Based on its history of operating discipline and sound financial decisions, a trend that should continue without Buffett in the CEO seat, Berkshire is a defensive stock pick today. Owning the business will give investors peace of mind.

Plus, there's a $314 billion (as of Jan. 22) public equities portfolio that can't be overlooked. This can drive shareholder value if the right investing moves are made.

It's not a surprise that buying the stock isn't going to generate life-changing returns for your portfolio and set you up for life. But at a price-to-book ratio of 1.5, the valuation is inviting for investors who are looking to scoop up shares of Berkshire.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.