We recently published a list of 11 Best Bear Market Stocks To Invest In Now. In this article, we are going to take a look at where Berkshire Hathaway Inc. (NYSE:BRK-B) stands against other best bear market stocks to invest in now.
As of January 2025, the prevailing sentiment among US economic experts leans towards cautious optimism regarding the stock market’s trajectory. While concerns about potential downturns exist, explicit predictions of a bear market in 2025 are not prominent. For example, economists surveyed by The Wall Street Journal have adjusted their forecasts, anticipating higher inflation and interest rates in the coming years. They note that inflation has been higher than expected, with the consumer-price index rising 2.9% in December, leading to projections of continued inflation momentum into 2025. Despite these concerns, the US economy has demonstrated resilience, driven by strong consumer spending and a declining unemployment rate, which fell to 4.1% in December. Consequently, economists estimate a 22% chance of a recession in the next 12 months, marking the lowest probability in three years.
Jeremy Siegel, a renowned economist from the Wharton School, suggests that the stock market could experience a cooling-off period in 2025, particularly within the technology sector, amid concerns over the rapid adoption of artificial intelligence. He also anticipates that interest rates might decline, which could influence market dynamics. Additionally, MarketWatch reports that foreign retail investors have been purchasing US stocks at unprecedented rates, with $76.5 billion acquired in the last three months. Historically, such surges in foreign investment have preceded market downturns, as observed before the 1987 crash, the 2000 dot-com bubble burst, and the 2008 financial crisis. This pattern suggests that increased foreign investment may serve as a contrary indicator, signaling potential market peaks.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Several economic experts also predict a bear market in 2025. For example, Cem Karsan, a volatility trader and founder of Kai Volatility, foresees a possible stock market decline of up to 40% within the next year, per a report by MarketWatch. He emphasizes that the Federal Reserve’s management of rate cuts and market expectations will be crucial. Karsan predicts that the 10-year Treasury yield could surpass 6% by the third quarter, which would exert additional pressure on stocks. He suggests that the Fed’s approach can either delay or accelerate the decline; a dovish stance might prolong the market rally but lead to a harder drop, whereas a hawkish stance could cause an earlier slide.
Similarly, Paul Krugman, a Nobel laureate and economist, has raised concerns that aggressive policy measures, such as imposing tariffs on China, could lead to inflation spikes and trade wars, potentially destabilizing the economy. He warns that such policies might exacerbate inflation and pressure the US labor market, contributing to economic instability. While these experts highlight potential risks, it’s important to note that market predictions are inherently uncertain. Other analysts maintain a more optimistic outlook for 2025. For instance, JP Morgan Research anticipates robust global economic growth, with the exception of a slowdown in China, and projects a price target of 6,500 for the S&P 500, with earnings per share of $270.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
Our list of the best bear market stocks to buy is grounded in hedge fund sentiment towards each stock. These selections are derived from sectors such as consumer staples, utilities, and healthcare, given their historical resilience and stability even during economic downturns. A considerable number of these stocks present enticing annual dividend yields and possess defensive attributes that enable them to maintain stability in a bear market. Additionally, we’ve identified promising tech stocks that currently pose as appealing entry opportunities for investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of insurance professionals in a boardroom overlooking a city skyline.
Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 120
Berkshire Hathaway Inc. (NYSE:BRK-B) is an Omaha-based conglomerate with interests in transport, insurance, and other businesses. There are several compelling factors that make this company a strong investment. Firstly, as per the report for the third quarter of 2024, Berkshire’s shareholders’ equity in September 2024 was $629.1 billion, representing an increase of $67.8 billion since the prior year, which reflects strong growth in its net worth. The net earnings of $69.3 billion for the first nine months reflect healthy profitability, with $36.4 billion stemming from after-tax investment gains. Moreover, the company has acquired 1.28 million shares of Domino’s Pizza, valued at approximately $549 million, which reflects a strategic move into the food service industry.
Overall, BRK-B ranks 4th on our list of best bear market stocks to invest in now. While we acknowledge the potential of BRK-B as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than BRK-B but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
