Berkshire Hathaway Inc. (BRK.B) is a large and diversified US business conglomerate, with operations that include insurance, transportation, and energy, among others. It is a core holding in our client portfolios. Here’s why, writes Albert Lu, president of Luma Financial.
The company, founded in 1839 as a textile manufacturer, has operated in its present form since 1965, with Warren Buffett, the chairman and CEO, at its helm. From inception to 2024, the company has achieved an average annual compounded gain of 19.9% – compared with 10.4% for the S&P 500 Index (^SPX).
Official US statistics put annual inflation at around 3% from September 2024 to September 2025, but some experience suggests the actual rate is much higher. For example, from 2014 to 2024 the cost of a McDouble hamburger at McDonald’s increased from $1.19 to $3.19 — a rate of increase corresponding to roughly 10% per year. If this continues much longer, they will have to rename it The McTriple.
With Treasuries yielding just above 4%, even conservative investors have no choice but to seek alternatives, such as stocks, to protect their purchasing power. The challenge then becomes shielding your nest egg from the ups and downs of the market. In this case, a large, diversified business with stable profits and a solid balance sheet is just what the doctor ordered.
Meanwhile, as investor anxiety rises over the potential of a popping Artificial Intelligence (AI) bubble, Berkshire Hathaway presents an attractive alternative to technology stocks and market-weighted indexes. While the company does maintain some exposure to AI through its public investments, its exposure to AI-related semiconductor companies or AI pure-plays is minimal to non-existent.
In its Q3 2025 report, Berkshire Hathaway reported cash and cash equivalents in the combined businesses of over $380 billion. While the large cash hoard has been the target of criticism, we view it as a strategic asset. Turbulent times sometimes present rare profit opportunities. If the market is indeed heading for a big correction, this company has the experience and balance sheet to capitalize.
Finally, President Trump recently announced that the US had secured up to $21 trillion of investment capital, a number that corresponds to the largest capital-spending boom in post-war US history. While the actual number is a topic of debate (Bloomberg puts the figure closer to $7 trillion), one thing is certain — the country needs capital to create jobs and restore its infrastructure and manufacturing base.
Berkshire Hathaway has a track record of working with the government in tough times. Whether it’s developing hydrogen energy or navigating a financial crisis, Uncle Sam knows he can count on Berkshire Hathaway.
