Down 10% Since Warren Buffett’s Retirement News, Should You Buy the Dip in Berkshire Hathaway Stock?
On May 3, 2025, Warren Buffett — the 94-year-old investing legend known as the “Oracle of Omaha” — announced he would step down as CEO of Berkshire Hathaway (BRK.A) (BRK.B) at the end of the year. The market’s response has been to sell Berkshire stock, which is now down over 10% since the news broke to wipe out tens of billions in market cap.
The announcement from Buffett marked the end of an era at Berkshire. But now, the stock’s pullback could mark the start of a new era for value investors: an opportunity to buy shares at a rare discount.
Berkshire stock often trades with what is known as a “Buffett premium.” Due to the legendary investor’s history of outperformance, the market trusts Buffett’s calm, rational investing style.
But with that halo gone, Berkshire shares have re-rated closer to their book and intrinsic value. Since the announcement, BRK.B has dropped just over 11% from its early May highs, even as the broader S&P 500 Index ($SPX) rallied to new highs during the same period. Yet, for long-term investors, that divergence might be a gift.
In his 1977 shareholder letter, Buffett famously wrote:
“We welcome lower market prices of stocks we own as an opportunity to acquire even more of a good thing at a better price.”
For fans of Buffett’s investing wisdom, it’s worth considering that notion as it applies to Berkshire stock itself.
When we look at Barchart’s put/call ratios for BRK.B, the open interest ratio has declined since May, even as the share price has fallen. This suggests bullish positioning may be building into Berkshire’s next earnings.
If investors are nervous about a post-Buffett Berkshire Hathaway, it’s because the Oracle leaves some big shoes to fill with his epic returns:
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19.9% compounded annual gain for Berkshire vs. 10.4% for SPX (1965-2024)
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$93,150/hour in Coca-Cola dividends alone
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Over $816 million/year in passive income from just one stock (KO)
And yet, Berkshire is underperforming the S&P 500 this quarter. That’s the kind of divergence that value investors live for.
For a closer look at what’s fueling Berkshire’s long-term performance, track Buffett’s favorite stocks — including Coca-Cola (KO), Apple (AAPL), and American Express (AXP) — in the Warren Buffett Watchlist under the Investing tab on Barchart.com.
Buffett might be stepping down, but the core investing philosophies he championed — driven by patience, value, and conviction — remain baked into Berkshire Hathaway’s DNA.
Given that, the dip in Berkshire stock may just be a prime opportunity to buy while others are fearful about what the future may hold.
Watch this quick reel for the current backdrop on Warren Buffett & Berkshire Hathaway stock:
On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com