Berkshire Shares Left Behind: What to Do as the S&P 500 Rallies to a Record High

We've all been there. You open your portfolio, see the S&P 500 hitting yet another all-time high, and then you glance at your Berkshire Hathaway shares... and sigh. They're not just lagging; they're moving in the wrong direction.

You're not imagining it. It's one of the biggest stories on Wall Street right now: while the market celebrates record territory, Buffett's legendary conglomerate is sitting on the sidelines.

Let's break it all down. I'll walk you through exactly why this is happening, the cash hoard question, the post-Buffett era, and, most importantly, what you should do next.

The Numbers Don't Lie: Just How Far Behind Is Berkshire?

If it feels like a punch to the gut every time you check the ticker, the data backs up that sinking feeling.

A Look at the 2026 Scorecard: BRK.B vs. the S&P 500

The contrast is stark. In early 2026, as the S&P 500 rallied to new heights, Berkshire was heading the other way. Through late March, Berkshire's Class B shares (BRK.B) were down roughly 5% to 6% year-to-date. During that same stretch, the broader market was showing resilience and eventually sprinted to a new all-time high above 7,000 points in April 2026.

This isn't a fluke. The stock fell 14.9% in just three months after Buffett's succession announcement. The momentum just... vanished.

It's Not Just This Year: A Decade of Playing Catch-Up

Here's the part that might really sting: this isn't a new problem. In 2025, Berkshire gained about 11.5%, not bad, right? But the S&P 500 soared over 16%. Even more sobering: over the last decade (2015-2025), the S&P 500 has delivered a total return of 304%. Berkshire? 234%.

When you're trailing by 70 percentage points over ten years... well, let's just say it's more than a temporary setback.

The Three-Headed Monster: Why This Underperformance Is Happening

So, what's going on? It's not one thing. It's a perfect storm of three major forces.

Reason #1: The Market's Tech Obsession vs. Berkshire's Old-School Value

The S&P 500's recent record run has been powered by a relatively small group of tech giants. In Q1 2026, the tech sector was expected to post revenue growth of over 22%, compared to just 8.8% for the overall index. Meanwhile, Berkshire is built on insurance, railroads, and utilities, bedrock businesses, but not the ones leading the AI revolution.

As one analysis put it bluntly: "The most convincing argument about Berkshire's lag is its low exposure to the super-hot tech sector". The market is rewarding a future Buffett famously didn't bet on.

Reason #2: The Elephant in the Room, The Post-Buffett Era

Let's be honest: a huge chunk of Berkshire's value has always been the "Warren Buffett Premium." It's the confidence that comes from knowing the world's greatest investor is at the helm. With Greg Abel officially taking over as CEO on January 1, 2026, the market is now in a real-time test of what Berkshire looks like without its founder.

The uncertainty has a price. As one analyst noted, the underperformance is "a signal that the market is pricing in uncertainty about the future". Abel is a proven operator, but he's not Warren Buffett. And the market is reminding us of that daily.

Reason #3: The $380 Billion Question Mark (The Cash Pile)

Berkshire is sitting on a record mountain of cash, over $370 billion (and by some estimates, as high as $380 billion). In a normal world, that's a great problem to have. But we're not in a normal world. Inflation erodes the value of cash, and shareholders are getting antsy.

"If it doesn't spend that cash, Berkshire could soon face pressure to start issuing a dividend," one market expert warned. For a company that hasn't paid a dividend since 1967, that would be a seismic shift. The market is effectively penalizing Berkshire for not putting that cash to work in a high-priced, AI-fueled market.

What the S&P 500's 7,000 Milestone Really Means

While we're all feeling the Berkshire blues, let's not lose sight of what's happening with the S&P 500. The index breaking 7,000 for the first time in April 2026 is a monumental achievement.

The Rally's Engine: AI Optimism and Ceasefire Hopes

This wasn't a broad-based rally. It was fueled by two things: (1) unbridled optimism around artificial intelligence, and (2) a wave of relief over a potential ceasefire. These are powerful, sentiment-driven moves. They don't necessarily reflect a robust, across-the-board economy.

A Closer Look Under the Hood: Is the Rally Healthy?

Here's where it gets interesting. The tech sector's earnings growth is projected to be triple that of the rest of the S&P 500 in 2026, around 30% versus 10%. This means a few giant companies are dragging the whole index higher, masking more modest performance everywhere else.

In fact, some analysts have noted a "rotation" out of tech and into value sectors like energy and materials in early 2026. In other words, the market might be starting to come around to Berkshire's way of thinking, even if it's not showing up in the stock price yet.

So, What Should a Berkshire Investor Do Now?

Alright, deep breath. We've laid out the problem. Now for the part that matters: your next move.

Action Plan #1: Zoom Out (Remember Who You Invested With)

You didn't buy Berkshire Hathaway for a one-year sprint. You bought it for a decades-long marathon. Value investing is famous for long, frustrating periods of underperformance, followed by sharp, powerful bursts of outperformance.

Ask yourself: Has anything fundamentally broken with the businesses Berkshire owns? The insurance operations (GEICO, Gen Re) are strong. BNSF Railway is still moving the nation's freight. The underlying engine isn't broken, it's just not the shiny object the market is chasing right now.

Action Plan #2: Watch These 3 Key Signals for the Abel Era

The biggest variable is Greg Abel. His first year will set the tone for the next decade. Here's what to watch for:

• Capital Allocation: How does he deploy the cash pile? A major acquisition? More share buybacks? Or, whisper it, a dividend? His first few big moves will be crucial.
• Portfolio Adjustments: Reports already suggest Abel is taking a more "hands-on" approach than Buffett, actively reviewing and adjusting the stock portfolio.
• Communication: Buffett's annual letters were legendary. Abel's tone, transparency, and long-term vision will need to fill those very big shoes.

Action Plan #3: Revisit Your Own Asset Allocation

This is the perfect time for a portfolio checkup. If watching Berkshire lag the market is keeping you up at night, it might be a sign your portfolio is out of balance. Maybe you're too heavily weighted in a single stock (even a legend like Berkshire).

Consider whether you need to rebalance into a broader index fund to smooth out the ride. There's no shame in taking some of the edge off. The goal isn't to be a "pure" Buffett disciple; it's to reach your financial goals with your sanity intact.

Frequently Asked Questions (FAQ)

Q: Is Berkshire Hathaway a buy, sell, or hold in 2026? 

A: Most analysts are in the "hold" camp. The company is fundamentally strong, but the uncertainty around the new CEO and the cash pile deployment means there's no clear catalyst for a short-term pop. It remains a "show me" story for 2026.

Q: Will Berkshire ever pay a dividend? 

A: It's more likely than ever. With Buffett no longer CEO and the cash pile at record levels, the pressure to return capital to shareholders is immense. Abel has stated the company won't pay a dividend as long as it can create more than a dollar of value with retained earnings, so the moment that math changes, so could the policy.

Q: Why did Buffett sell Apple stock? 

A: That move continues to weigh on performance. The decision to sharply reduce the Apple stake in 2025 was a major factor in Berkshire trailing the S&P 500 that year. The proceeds went into the cash pile, which, while safe, hasn't generated the same returns as the stock itself would have.

The Oracle's Final Lesson

Warren Buffett once said, "The stock market is a device for transferring money from the impatient to the patient." Right now, with Berkshire shares left behind as the S&P 500 rallies to record highs, that lesson has never felt more relevant, or more difficult to follow.

It's okay to be frustrated. It's okay to question the strategy. That's what smart investors do. But before you make any moves, remember that this is the very kind of market environment that value investors live for. The market is pricing in uncertainty. The question is whether you believe Greg Abel and Berkshire's fortress of businesses can prove the market wrong over the long haul.

What do you think? Are you holding on, buying more, or taking profits elsewhere? I'd love to hear your take in the comments below. Let's get a real conversation going, I read every single one.

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