Berkshire Hathaway Is a Great Bear Market Stock. These 2 Are Even Better Buys.

Jeremy Bowman, The Motley Fool

Sat, May 10, 2025, 6:32 PM 7 min read

• Warren Buffett has delivered alpha in part by outperforming in bear markets.

• He is known for accumulating cash to take advantage of sell-offs when the market crashes.

• Berkshire also has a number of subsidiaries in insurance and utilities that generate profits regardless of the state of the economy.

• 10 stocks we like better than Altria Group ›

After 60 years of running Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), Warren Buffett will be riding off into the sunset.

The 94-year-old, widely regarded as the greatest investor of all time, announced at Berkshire's annual shareholder meeting over the weekend that Greg Abel would take over as CEO by the end of the year.

Buffett is regarded as an investing and business legend for a number of reasons, and Berkshire's track record speaks for itself. He essentially doubled the annual return of the S&P 500 (SNPINDEX: ^GSPC) over his career, delivering phenomenal returns for his investors along the way.

Arguably, Buffett was at his best during bear markets, and Berkshire's greatest periods of outperformance often came during sell-offs. He built his conglomerate for longevity with durable, all-weather businesses like insurance companies, and the famed value investor was able to capitalize on stock market sell-offs and take advantage of deals in the private market as he often kept a large war chest of cash on hand to be ready when a good value presented itself.

While we're not in a bear market, the S&P 500 was on the verge of one not long ago, and 2025 has already given investors plenty of volatility. In this environment, Berkshire's reputation for stability has served it well as it's outperforming the S&P 500 by a wide margin, and the chart below includes the 5% decline after Buffett announced his retirement.

As good as Berkshire has been in bear markets under Buffett, there are a few other stocks that have been even better, outperforming Berkshire not just this year, but in prior years. Let's take a look at two of them.

Altria (NYSE: MO) hasn't been a top stock over the last decade, but its performance over its history has been dominant, especially when factoring in dividends reinvested.

Altria is currently the domestic seller of its Marlboro and other cigarette brands, as well as smoke-free products like on! oral nicotine pouches and NJOY vapes. Earlier in its history, it was a global company combined with Philip Morris International.

As a tobacco company, Altria has the advantage of selling a recession-resistant product, as smokers and other consumers of its products tend to buy them regardless of the state of the economy. Altria's high-yield dividend and status as a Dividend King, having raised its dividend 59 times in the last 55 years, also makes it an attractive stock in a down market as it has reliably paid increasing dividends for nearly as long as Buffett's been CEO.