Should You Buy Berkshire Hathaway While It's Below $500?

Key Points

• Berkshire Hathaway's B shares have fallen notably and are now down about 10% from their recent peak.

• The company made a big announcement at its annual meeting.

• Long-term investors should probably expect the company to be run similarly to how it has always been run.

• 10 stocks we like better than Berkshire Hathaway ›

Shares of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) have pulled back from the all-time highs reached earlier in 2025. There are multiple potential reasons for that drop, but one stands out above all the others. And while the concerns here are real, the likelihood is that the company will remain very similar in the future to what it looks like today. Here's what you need to know if you are considering buying Berkshire Hathaway today.

Pullbacks happen on Wall Street

No stock goes up in a straight line, not even iconic Berkshire Hathaway. So the fact that the shares have dropped about 10% from their all-time high isn't really that shocking. The Class B shares can now be bought for less than $500 a share, while the Class A shares are fetching around $723,000 each. Clearly the Class B shares are going to be more accessible to most investors.

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While pullbacks are normal, investors always want to know why something has happened. There are several potential options with Berkshire Hathaway, including a massive cash hoard on the balance sheet that could drag on returns, a reversal of recent relative outperformance, and the announcement that Warren Buffett is retiring as chief executive officer, among others. That last one is actually a huge piece of news.

Is Berkshire Hathaway the same without Buffett?

For decades Berkshire Hathaway has been seen as the investment vehicle of Warren Buffett. If you wanted to invest alongside the so-called Oracle of Omaha, you just had to buy a few shares of Berkshire Hathaway. After all, the conglomerate is run more like a mutual fund than a traditional corporation. Given Buffett's incredible success -- noting that the company's stock has handily outdistanced the S&P 500 index (SNPINDEX: ^GSPC) over the long term -- investing alongside Buffett made complete sense.

Buying Berkshire Hathaway was effectively hiring Buffett to invest on your behalf. His broad approach was appealing, too, buying well-run companies while they were attractively priced and then holding for the long term to benefit from a company's growth over time. But after Buffett drops the title of CEO at the end of 2025, the way Berkshire Hathaway is managed is going to change. There's no way around that fact.

Indeed, Greg Abel, Buffett's hand-picked successor isn't Warren Buffett and he never will be. The way each person invests is going to be unique to that person. However, Abel has worked for Buffett for decades. And he has been involved in running the overall company for many years at this point. While Abel will bring his unique perspective to investing, the foundation for his perspective has been shaped by Buffett. It seems highly unlikely that Abel will make huge changes to what has been an incredibly successful approach.

Meanwhile, Buffett isn't walking away from Berkshire Hathaway. He is expected to stay on as board chairman. That means he will still be Abel's boss. And it seems highly likely that he will be available to Abel at a moment's notice to help him or, if the new CEO is struggling, Buffett can step in to course correct. Buffett has long been a hands off CEO, letting the companies Berkshire Hathaway owns run unfettered. But that's only true so long as the companies are being run well. It is unlikely he'd take a different approach as chairman.

So, all in, one of the biggest concerns that investors have today, a new CEO, is probably not as big a deal for Berkshire Hathaway as it may seem. And, still, things will change because Abel is not Buffett and never will be. He will have to figure out his own way of doing things, with Buffett in the background to help.

Is Berkshire Hathaway a buy below $580?

If you are a long-term investor and believe broadly in the Buffett investment approach there's no reason not to buy Berkshire Hathaway's B shares on the pullback. Abel isn't likely to change the broad direction of the company. That said, given that Berkshire Hathaway is similar to a mutual fund in many ways, keep in mind that a bear market is likely to drag the stock down just like the rest of the market. Berkshire Hathaway is best viewed as a long-term investment, not one that you jump in and out of trying to time price swings.

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Reuben Gregg Brewer 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.