…and what might happen to BRK in a “severe bear market”.
“Something like the crackup of a Granthamite 3-sigma bubble may or may not be unraveling at this very moment. On the other hand, it may be a sharp and scary but brief readjustment. Only in the fullness of time will we know. He’s spot on so far with the implosion of the silliest categories first. That started about a year ago - NFTs, SPACs, meme stocks favored by proudly ignorant “apes,” and new growth companies valued by price to sales ratios because they have no earnings or cash flow. But what happens in the end to serious companies with a long track record of good performance?”
Summing it up, Berkshire Hathaway is one of the true sleep-well-at-night companies in the market and is well defended against a wide range of negative events. Its share price may be pulled down in a bear market, but it should bounce back promptly. It doesn’t appear to be overpriced. Combined with its strong return on equity and solid growth, it is a stock which can be kept as a core holding in your portfolio without worry.
“it is a stock which can be kept as a core holding in your portfolio without worry.”
Berkshire’s business did reasonably well during those “negative events”, but the stock price took significant hits.