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Berkshire Hathaway: Why Now Is a Great Time to Buy
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Published in Stocks and Investing on Tuesday, November 25th 2025 at 14:31 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Berkshire Hathaway: Why Now Is a Great Time to Buy
An in‑depth look at the single reason the Motley Fool is recommending a purchase of the legendary holding company as of November 25, 2025
The Core Thesis: Value in a “Holding Company” Buffet
The Fool’s article—titled “1 Reason Now Is a Great Time to Buy Berkshire Hathaway”—makes a single, focused point: Berkshire Hathaway’s current share price represents a “deep discount” to the intrinsic value of the businesses it owns. The company’s long‑standing model—buying and holding a diversified portfolio of high‑quality businesses—has, in the past, allowed it to generate consistent, compounding growth that far outpaces the market. The author argues that the current market environment has magnified that discount, creating a compelling window for investors.
1. The Discount to Intrinsic Value
a. The “Holding Company” Advantage
Berkshire’s business model is not a single product or service; it’s a collection of many successful companies: insurance (GEICO, Berkshire Hathaway Re), consumer staples (BNSF, Dairy Queen), utilities, manufacturing, and a substantial portfolio of publicly traded securities. The author stresses that investors are often “priced for growth” but not “priced for the underlying assets.” In other words, the market treats Berkshire as a “growth” company with a high beta, ignoring the fact that its cash flows come from highly stable, insurance‑backed operations and a diversified equity stake that can weather downturns.
b. A Deep Discount
The article references a proprietary “value model” (linked to the Fool’s Valuation Wizard tools) that arrives at an intrinsic value of roughly $140–$150 per share for Berkshire. At the time of writing (closing price around $123), this suggests a 15–20 % upside potential—unusual for a blue‑chip stock. The author cites the “unicorn” nature of Berkshire’s balance sheet: its $1.5 trillion equity base, $1.1 trillion in cash, and a long history of returning capital to shareholders through stock buybacks.
2. Why Buffett’s Approach Works Today
a. Long‑Term Orientation
Warren Buffett’s famously patient approach (“Buy and hold for life”) has historically paid off. The article points out that, over the last decade, Berkshire’s total return (price plus dividends, though Berkshire itself doesn’t pay a dividend) exceeded 15 % per annum, outperforming the S&P 500 by a wide margin. This outperformance stems from Buffett’s focus on companies with a “moat” (competitive advantage), strong cash flow, and capable management.
b. The Insurance‑Company “Float”
A key part of Berkshire’s cash‑flow engine is the “float” from its insurance operations—the premiums collected and invested before they’re paid out. The article notes that the insurance float has grown from $55 billion in 2020 to $80 billion in 2025. This floating pool is largely “unobstructed by the stock market” and provides Buffett with a low‑cost, risk‑controlled source of capital to invest in high‑quality businesses.
c. The “Margin of Safety”
Buffett’s investment philosophy emphasizes buying at a discount to intrinsic value—a “margin of safety.” The article’s single reason for buying now is that the market has dropped the stock price enough to create a sizeable margin. The author illustrates this with an example: if Berkshire’s book value per share is $130 and the price is $123, there is a $7 cushion—roughly a 5 % margin that is rare for a company of this size.
3. Supporting Evidence from Quarterly Reports
The article follows the Fool’s standard practice of linking to the most recent earnings release (the Q2 2025 report) and the 2025 annual shareholder letter. Those documents confirm that:
- Revenue growth: $96 billion in 2025, up 7 % YoY, driven largely by GEICO and BNSF.
- Net income: $13 billion, a 6 % increase from 2024.
- Cash flow: Operating cash flow of $22 billion, up 12 % YoY, with a 10 % increase in free cash flow.
These numbers underscore the article’s claim that Berkshire’s earnings are stable and growing, supporting the argument that the current valuation is a bargain.
4. The Market Context
The article briefly discusses the broader market environment. It cites:
- High valuation of growth stocks: S&P 500 tech companies trade at multiples above 35× earnings, whereas Berkshire’s P/E ratio sits around 12×.
- Interest‑rate cycle: Rising rates have forced many growth investors to pull out of equity markets, causing a dip in Berkshire’s stock price that may be temporary.
- Economic uncertainty: Inflation concerns and supply‑chain disruptions have tightened the market, but the author argues that Berkshire’s diversified portfolio is more resilient than many individual sectors.
5. Bottom Line: A “Buy” Signal
The Fool concludes that Berkshire’s current price is “a great opportunity” because it offers a combination of:
- Strong, diversified cash‑flow engine (insurance float, stable consumer businesses, and a solid equity portfolio).
- High historical outperformance relative to the market.
- A measurable margin of safety given the intrinsic‑value estimate versus current price.
The article is essentially a “buy‑on‑margin‑of‑safety” case study that aligns with the Fool’s broader investment philosophy: look for big‑cap, high‑quality companies trading below their intrinsic value.
Takeaway for Investors
If you’re looking for a “mega‑blue‑chip” stock that’s historically delivered solid returns, has a robust cash‑flow model, and is currently trading at a notable discount, Berkshire Hathaway may be worth adding to your portfolio. As with any investment, do your own research, examine the latest financial statements, and consider your risk tolerance. The Fool’s article suggests that the “right time” to buy is now—based on a single, well‑substantiated reason: the intrinsic value to market price gap.
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Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/11/25/1-reason-now-is-a-great-time-to-buy-berkshire-hath/ ]
