After 60 years of running Berkshire Hathaway (NYSE: Brk.a)(NYSE: Brk.b)Warren Buffett will go to sunset.
The 94 -year -old, widely regarded as the largest investor of all time, announced at the annual Berkshire shareholders’ annual meeting during the weekend that Greg Abel would assume as CEO by the end of the year.
Buffett is considered an investment and business legend for several reasons, and Berkshire’s career speaks for herself. The annual return of the S&P 500 (Snpindex: ^GSPC) Throughout his career, providing phenomenal returns for their investors along the way.
Image Source: The Motley Fool.
Without a doubt buffett was at his best during Bear marketsAnd the greater periods of overcoming Berkshire often occurred during sales. He built his conglomerate for longevity with durable companies and all times like insurance companies, and the famous value that investor was able to take advantage of stock market sales and take advantage of private market offers, as he often maintained a large hand cash chest to be ready when it was well value.
Although we are not in a bear market, the S&P 500 was about to do it -not long ago, and by 2025 it has given the investors a lot of volatility. In this environment, Berkshire’s reputation for stability has served it well as it exceeds the S&P 500 by a wide range, and the following graph includes the 5% decrease after Buffett announced his retirement.
As good as Berkshire has been in the bear markets under buffett, there are some other stocks that have been even better, surpassing Berkshire not only this year, but in previous years. Let’s take a look at two.
Altical (NYSE: MO) It has not been a more important stock for the last decade, but its performance throughout its history has been dominant, especially when the dividends were reinvested.
At present, Alria is the national seller of his Marlboro brands and other cigarettes, as well as smoke -free products like where! The nicotine oral bags and Njoy’s vapors. Previously in its history, it was a world company combined with Philip Morris International.
As a tobacco company, Altria has the advantage of selling a product resistant to recession, as smokers and other consumers of their products usually buy them regardless of the state of the economy. The dividend and the state of high performance of ally as the king of dividends, after increasing its dividend 59 times in the last 55 years, it also makes it an attractive action in a descent market, as it has paid reliably increasing dividends for almost some time that Buffett has been CEO.
In a total profitability base, altitium shares have increased by 16.6% this year, surpassing both Berkshire and S&P 500.
During the Bear Market of 2007-2009, during the financial crisis, altitar actions fell, but still overcome both Berkshire Hathaway and the S&P 500, as shown in the following graph.
Although Berkshire’s actions remained well through the early stages of the bear market, it fell abruptly in the fourth quarter of 2008 after the collapse of Lehman Brothers, and, according to great paper losses on his portfolio.
A company like Altria, on the other hand, does not have to worry about this kind of volatility.
Similarly, during the Bear Market 2000-2002, both Ally and Berkshire Hathaway obtained a positive performance, as they were relatively affected by the bust of Dot-com, even when the S&P 500 lost 49%. However, as the following graph is shown again, it was the clear winner, tripling during that period when dividends were reinverted.
With its current 6.8% dividend performance and its recession business model, Altria seems like a good commitment to overcome in a bear market if it happens again.
Another sector that has a clear history of overcoming the Bear markets is the after -sales car parts.
After all, consumers generally buy these products because they need them for repairs, and in recession environments they usually delay the replacement of their vehicles and, on the other hand, are spent on repairs, that is, replacement pieces. That is, Auto Parts is a counter -jump industry, that is, consumers spend more in bad times than in good.
One of the best performance stocks in this sector has been Autozone(NYSE: Available)She has constantly expanded her base store base and stood out in the management of the inventory through her hub and spoke, where HUB stores are centrally stated that speech stores are well provided. This also helps to serve commercial customers such as repair stores who need pieces in a timely manner.
Autozone has a history of recession capitalization and, so far, the action has increased by 17.8%.
In previous bear markets, Autozone has also prospered. In the 17 -month bear market during the financial crisis, the shares obtained 22%, as can be seen from the following graph.
Historically, the business has accelerated towards the end of recessions, probably because consumer savings have been exhausted at the moment. In 2009, which ended in August 2009, domestic sales in the same store increased by 4.4%, their best performance in the previous five years.
Autozone is not a dividend payer, but the company has aggressively bought its shares during its history, accelerating its growth of earnings by action and increasing the price of actions taking advantage of the discounts as they arrive.
At the Bear 2000-2002 market, Autozone actions also increased, tripling during that period as altria. Once again, their earnings were weighted until the second half of the fall.
Similarly, comparable sales of Autozone increased 9% in 2002, leaving the recession of that time.
It is likely that this overcoming pattern will remain again if the economy sinks into a recession, which explains why Autozone has increased almost 20% this year by little news.
Investors may be disappointed that buffett go down as Berkshire’s rare 5% slide, but Oracle de Omaha has built the company in the long term.
In addition, Berkshire also benefits from a cash assoig that has increased to almost $ 350 million, giving the company a large amount of fire power to make an agreement if you find it attractive.
Berkshire is not certainly a bad stock to own in such an environment and its unique position makes it a purchase. However, investors seeking capitalization of a bear potential market would do well to buy altitia or autozone shares.
Both have history behind it, and their business models make them very likely to overcome the market again in case they are in a recession.
Before buying shares in the Altria group, consider this:
It Motley Fool Stock Exchange Advisor The analyst team just identified what they think are the 10 best stocks For investors to buy now … and Altria Group was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Think about whenNetflixMade this list on December 17, 2004 … if you invested $ 1,000 at the time of our recommendation,would you have 614,911 dollars!* Or when NvidiaMade this list on April 15, 2005 … if you invested $ 1,000 at the time of our recommendation,would have $ 714,958!*
Now it’s worth notingValue AdvisorThe total average profitability is907%: a market crushing performance compared to163%For the S&P 500. Do not miss the most recent list of 10 Top, available when you joinValue Advisor.
Jeremy Bowman It has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Berkshire Hathaway. The Motley Fool recommends Philip Morris International. The mold’s fool has a Outreach policy.
