After six decades at the helm of Berkshire Hathaway (BRK.A 0.18%) (BRK.B 0.09%), Warren Buffett is set to retire. The celebrated investor, recognized as one of the greatest of all time, revealed during Berkshire’s annual shareholder meeting that Greg Abel would succeed him as CEO by year’s end.
Buffett’s investment legacy is well-established; he has significantly outperformed the S&P 500 (SNPINDEX: ^GSPC), effectively doubling the index’s annual returns while providing exceptional gains for his investors.
Buffett notably excelled during bear markets, with Berkshire showing remarkable resilience during downturns. His strategy focused on creating a conglomerate filled with robust, all-weather businesses. He typically maintained a significant cash reserve, allowing him to capitalize on stock market declines and private market opportunities.
While we’re not currently in a bear market, the S&P 500 was recently close to one, and 2025 has presented investors with ample volatility. In this fluctuating environment, Berkshire’s reputation for stability has proved beneficial, allowing it to outperform the S&P 500 notably, as illustrated by the 5% dip following Buffett’s retirement announcement.
1. Altria
Altria (MO -1.61%) may not have been a top performer in the last decade, but its historical track record, especially with reinvested dividends, has been impressive. The company is a key player in the domestic market for cigarettes and smoke-free products, benefiting from a recession-resistant business model.
2. AutoZone
AutoZone (AZO -0.44%) is another strong performer in the aftermarket auto parts sector. Consumers often prioritize maintenance in tough economic times, allowing AutoZone to thrive. The company has effectively managed inventory and expanded its stores, leading to year-to-date stock gains of 17.8%.
While Buffett’s retirement might be disappointing for some investors, Berkshire’s long-term strategies ensure it remains an attractive buy, bolstered by a cash reserve nearing $350 billion that positions it well for future opportunities. For those keen on potential bear market plays, Altria and AutoZone present compelling options, given their established histories and robust business models that suggest they will likely outperform in future downturns.
