Recommended Free Tools
Berkshire Hathaway has outperformed the S&P 500 in several down calendar years, but it is not a dependable hedge: it fell 31.8% in 2008, lagged the index in 2020 and in the 2009 rebound, and underperformed in 2025. Its results depend on the period measured, and the company’s annual comparison does not report peak-to-trough declines.
What Berkshire’s downturn record actually measures
Berkshire Hathaway’s latest annual comparison, published in its 2025 shareholder letter, pairs the company’s annual change in per-share market value with the S&P 500’s annual return including dividends. It covers completed calendar years, not every trading day within them. That distinction matters: a calendar-year result can show how each investment ended the year, but it cannot tell you which suffered the larger temporary loss before year-end.
As an Amazon Associate I earn from qualifying purchases.
For instance, Berkshire’s 2008 result was better than the S&P 500’s for that calendar year, but a decline of 31.8% is still a substantial loss. The table does not establish that Berkshire’s largest intrayear drop was smaller, that its shares recovered sooner, or that it would fall less in a future bear market. Those questions require matched daily or monthly price data and a defined peak-to-trough period.
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
The comparison also uses different return descriptions: Berkshire’s figure is per-share market-value change, while the S&P 500 figure includes dividends. Read it as the official annual comparison Berkshire publishes, rather than as a perfectly identical price-return calculation for both investments.
#1 Best Overall
What the annual results show
The years below illustrate both relative resilience and its limits. A positive Berkshire figure in a year when the index fell means Berkshire rose on the reported annual measure; a smaller negative figure means it lost less over that calendar year, not that it was insulated from the market’s decline.
| Calendar year | Berkshire per-share market value | S&P 500, dividends included | What the annual result says |
|---|---|---|---|
| 2000 | +26.6% | −9.1% | Berkshire rose while the index fell. |
| 2001 | +6.5% | −11.9% | Berkshire rose while the index fell. |
| 2002 | −3.8% | −22.1% | Both fell; Berkshire’s decline was smaller. |
| 2008 | −31.8% | −37.0% | Both fell substantially; Berkshire’s annual loss was smaller. |
| 2009 | +2.7% | +26.5% | Berkshire lagged the sharp rebound. |
| 2020 | +2.4% | +18.4% | Berkshire lagged in a year of severe market disruption. |
| 2022 | +4.0% | −18.1% | Berkshire rose while the index’s total return was negative. |
| 2025 | +10.9% | +17.9% | Berkshire lagged in the latest completed calendar year. |
Source: Berkshire Hathaway’s 2025 shareholder letter. These are calendar-year figures, not peak-to-trough drawdowns.
The pattern is not simply “Berkshire falls less.” It beat the index in the three consecutive down years from 2000 to 2002, and again had the stronger annual result in 2008 and 2022. Yet 2008 still brought a loss of nearly a third in Berkshire’s reported per-share market value. In 2020, Berkshire ended up only 2.4% while the index’s dividend-inclusive return was 18.4%. The following year in the table, 2009, shows another important risk for investors seeking protection: a holding that loses less in a decline can also participate less in the recovery.
Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minuteRank #2
- Ideal for Gifting
- Ideal for a bookworm
- Compact for travelling
Over the much longer span from 1965 through 2025, Berkshire reports a compounded annual gain of 19.7%, compared with 10.5% for the S&P 500 with dividends. That long-run record provides context for the company’s history, but it does not establish how Berkshire will behave in the next downturn. A multidecade average blends strong and weak years and cannot substitute for a drawdown analysis or a forecast.
Why Berkshire has sometimes held up better
Berkshire is a conglomerate with operating businesses, insurance operations, and investments, rather than a fund that simply tracks the S&P 500. The mix of businesses and investment exposures can produce different results from the broad index in any given year. It also changes over time, so past relative performance should not be treated as a fixed characteristic of the stock.
In his 2002 shareholder letter, Warren Buffett linked Berkshire’s relative performance that year partly to having a lower portion of its assets committed to common stocks. He described the 32.1 percentage-point advantage over the S&P 500 in 2002 as exceptional, writing: “This result is aberrational: Charlie Munger, Berkshire’s vice chairman and my partner, and I hope to achieve – at most – an average annual advantage of a few points.” The explanation is specific to that period; it is not a promise that Berkshire will outperform whenever stocks fall.
The 2002 letter also warns against treating the older historical comparison as a perfectly matched investment test. In that discussion, the S&P 500 results were pre-tax while Berkshire’s results were after-tax. Buffett noted that a corporation owning the index and accruing taxes would lag it in positive-return years and exceed it in negative-return years, with taxes creating substantial aggregate lag over time. That tax explanation concerns the older book-value comparison. The more recent annual table reports Berkshire per-share market value, so the tax caveat should not be casually applied as if it describes every detail of the current series.
What Berkshire’s cash and operating results can—and cannot—tell you
At December 31, 2025, Berkshire’s insurance and other businesses held $369.0 billion in cash, cash equivalents, and U.S. Treasury bills, according to its 2025 annual report. The 2025 shareholder letter also reports $46 billion in net cash flows from operating activities. These are indicators of reported liquidity and cash generation. They do not tell investors when Berkshire will deploy cash, which securities or businesses it might buy, or what return shareholders will receive in a future selloff.
The same letter says Berkshire made no share repurchases in 2025. That is a dated company action, not evidence that repurchases will or will not occur in a later downturn. More generally, a large cash balance can provide financial flexibility, but it does not set a floor under the share price: Berkshire’s stock can decline as investors reassess its businesses, holdings, and future prospects.
Rank #4
Keep share performance separate from operating performance. Berkshire’s letter cautions that GAAP net earnings can swing with realized and unrealized investment gains and losses. It says: “These gains and losses matter over the long run, but when evaluating Berkshire’s annual business performance, we believe operating earnings remains the best measure.” The 2025 letter was signed by Greg Abel, Chief Executive Officer. Operating earnings help describe the performance of the businesses; they are not a substitute for the return an investor actually earns on Berkshire shares.
Insurance results offer another piece of business context, but not a direct share-price signal. Berkshire reported a 2025 property-and-casualty combined ratio of 87.1%, compared with its five-year average of 90.7%, ten-year average of 93.0%, and twenty-year average of 92.2%. The retroactive reinsurance business is excluded from these ratios. A combined ratio below 100% indicates that claims and expenses were lower than premiums for the measured underwriting business; it does not guarantee that the ratio will remain favorable or that Berkshire’s shares will avoid a decline.
Is Berkshire Hathaway a safe stock in a recession?
No stock can be called safe from loss based on these annual comparisons. Berkshire has demonstrated relative resilience in selected down calendar years, but the 2008 loss shows that “held up better than the index” can still mean a severe decline. The evidence does not establish that Berkshire is recession-proof, that it reliably falls less in every bear market, or that it will outperform during the next economic contraction.
Best Value
- It can be a gift option
- Comes with secure packaging
- Helpful in various ways
“Market downturn” can also refer to different events: a recession in the economy, a bear market in stocks, or a decline in Berkshire’s own share price. They may overlap, but they are not interchangeable. The annual table classifies returns by calendar year; it does not identify every recession or match each market shock to a specific peak and trough. Someone evaluating recession exposure should therefore avoid reading the table as a recession-by-recession test.
For a personal portfolio decision, start with the role you need an investment to play. Berkshire is an individual company’s stock, so it carries company-specific exposure even though its businesses and investments are diversified across activities. The S&P 500 represents a broad index and its total-return figure includes dividends. Cash and Treasury bills have a different purpose and return profile again. Compare investments using the same time period and a consistent treatment of dividends, and decide whether you are evaluating annual returns, maximum drawdown, volatility, or recovery time. This table answers only the first of those questions.
Finally, distinguish a historical result from a hedge. A hedge is expected to offset losses in another holding under specified conditions; Berkshire’s table does not demonstrate a reliable offset relationship or establish how Berkshire would correlate with a reader’s particular portfolio. Its selected periods of outperformance are useful evidence, but not a hedge strategy or assurance of future downside protection.
Windows Errors? Fix Them Before They Spread
Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallOutdated Drivers Are Slowing You Down
One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchHow to use the record without overreading it
A practical reading of the figures keeps four comparisons separate:
- Calendar-year return versus drawdown: The figures show annual endpoints, not the worst decline from a prior peak during the year.
- Per-share market value versus total return: The table pairs Berkshire’s per-share market-value change with the S&P 500 return including dividends.
- Down year versus rebound: Berkshire’s smaller losses in selected down years do not mean it keeps pace during a fast recovery, as 2009 illustrates.
- Shareholder outcome versus company condition: Operating earnings, liquidity, and insurance underwriting describe business or balance-sheet conditions; none is identical to the annual return on Berkshire shares.
If your concern is the size of a temporary loss, seek a separately calculated maximum drawdown using the same dates and dividend convention for Berkshire and the index. If your concern is what Berkshire might do with its liquidity, the reported cash figures are a snapshot rather than a commitment. And if you are considering the stock as a long-term holding, treat the 1965–2025 compound record as historical context—not as a return target or guarantee.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
