Is Berkshire Hathaway One of the Market's Most Underrated Compounders?
Berkshire Hathaway is up 2% so far in 2026, while the S&P 500 index has risen over 8%.
Overview
Warren Buffett's investment success made Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) a household name. He retired at the end of 2025, handing the CEO job off to hand-picked successor Greg Abel. And so far, Wall Street appears to be taking a show-me approach with Abel, since Berkshire Hathaway's stock is up just 2% or so in 2026, as of this writing, while the S&P 500 index (SNPINDEX: ^GSPC) has risen over 8%. Investors appear to be underestimating the compounding power of Berkshire Hathaway.
Berkshire Hathaway operates large insurance companies. It collects premiums up front, but pays out on claims in the future. It gets to invest the cash, known as the float, in between. Buffett made good use of the float, building a large portfolio of fully owned businesses and successfully investing in a small collection of large public companies. Abel has inherited this business. And, as of the end of the first quarter, the company's roughly $400 billion cash hoard.
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Originally published at www.fool.com.