Is Berkshire Hathaway the Smartest Investment You Can Make Today?

Key Points

• Warren Buffett is stepping down as CEO of Berkshire Hathaway, a role he has held since 1965.

• Investing lieutenants Todd Combs and Ted Weschler could bring fresh perspectives to Berkshire's investment strategy.

• With $340 billion in cash and short-term investments, Berkshire Hathaway has a significant stockpile ready to invest.

• 10 stocks we like better than Berkshire Hathaway ›

Warren Buffett has long been a beacon of inspiration for investors worldwide. Known for his long-term investment approach, Buffett has delivered an average annual return of 20% since taking the helm of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) in 1965.

Now at 95, Buffett is preparing to step back and pass the reins to CEO Greg Abel, alongside Buffett's chosen investing lieutenants, Todd Combs and Ted Weschler.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Since Buffett announced his retirement, Berkshire's stock has lagged the broader market. This subdued performance has created an attractive buying opportunity. With the stock priced reasonably and the company sitting on a substantial cash reserve, Berkshire looks like a smart buy today. Here's why.

Image source: The Motley Fool.

Berkshire Hathaway is undergoing a transition

For decades, Buffett has been a pillar of stability and influence, not only at Berkshire Hathaway, but also in the broader economy. He has proven to be a prudent and patient investor, waiting for the right time to put Berkshire's cash to work.

For this reason, it's not too surprising that Berkshire stock has underperformed since Buffett announced his retirement this May. Investors may be cautious about what the future could have in store for the company without Buffett and the late Charlie Munger for the first time in over six decades.

Buffett stepping down opens the door for new faces to take over the company's operations and investment decisions. Greg Abel, currently vice chairman of Non-Insurance Operations, is Buffett's chosen successor to lead the company and oversee Berkshire's vast empire. Meanwhile, Todd Combs and Ted Weschler are the investment lieutenants that Buffett and his right-hand man, the late Charlie Munger, tapped to guide Berkshire's massive investment portfolio.

Paving the way for the next generation of investors

Before joining Berkshire, Combs ran Castle Point Capital, a hedge fund, from 2005 to 2010. Combs also has experience in the insurance industry and has led GEICO for the past five years, reshaping it "in a major way."

Ted Weschler has an impressive track record managing his investments. In a public statement, Weschler reported that, over 28 years, he had grown an initial Roth IRA account balance of $70,385 into $131 million -- or a 31% annual return on investment.

Combs and Weschler have massive shoes to fill. Buffett and Munger have delivered phenomenal returns thanks to their vast array of knowledge, not just about investing, but about the world in general. But they weren't without their flaws.

For example, their more cautious approach to investing only in businesses they understood kept them from investing in technology companies during the early stages of the technology revolution. While this helped Berkshire avoid many companies that went under, it also missed out on some of the biggest compounders at the time.

It was the influence of Combs and Weschler that got Berkshire to invest in Apple back in 2016, marking a departure from Berkshire's traditionally cautious approach to tech stocks. Berkshire's Apple investment quickly became one of Berkshire's most successful, delivering substantial gains to the company's portfolio over the past decade.

Combs and Weschler have also been credited with initiating or overseeing Berkshire's investments in companies such as Amazon and Snowflake in recent years, as their responsibilities within Berkshire's investment portfolio have expanded.

As the company transitions leadership, the track record of Combs and Weschler in identifying new opportunities suggests Berkshire may continue to adapt and thrive in a changing investment landscape.

Berkshire's massive cash stockpile gives it flexibility

At its core, Berkshire is highly diversified across an array of industries. Insurance is its largest business, which includes operations such as GEICO, Berkshire Hathaway Primary Group, and a global reinsurance division. In addition to that, Berkshire owns assets across various other industries, including transportation, manufacturing, service, and retail. These businesses provide Berkshire with steady cash-generating businesses across the economy.

Berkshire has parked a significant amount of its capital in Treasuries and other short-term holdings, as the conglomerate takes advantage of higher short-term rates. As of June 30, Berkshire held $340 billion in cash and short-term investments in U.S. Treasury bills. This massive cash pile is generating Berkshire investment income to the tune of $5 billion in the first six months of 2025, an increase of 11.3% over the same period of 2024.

New leadership will be under a magnifying glass, especially following such a legend as Warren Buffett. However, I really like the diverse business model and cash-rich balance sheet, which puts the new management in a prime position to pursue new growth avenues. This is why I think Berkshire is a solid buy today.

Should you invest $1,000 in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $654,759!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,046,799!*

Now, it’s worth noting Stock Advisor’s total average return is 1,042% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 25, 2025

Courtney Carlsen has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway, and Snowflake. The Motley Fool has a disclosure policy.