Investing in Berkshire in your 20s

[hopspreads]

Is BRK actually a good pick for someone in their 20s?

 

I get the appeal -- capital allocation discipline, huge downside protection and lots of optionality in case of a downturn. But at $1T, the alpha that made early shareholders rich seems structurally capped.

 

Wouldn't a 25-year-old with 40 years of runway be better off in smaller compounders -- the kind of business Berkshire itself used to be?

[charlieruane]

Well, do you know how to identify smaller compounders? If so, buy them!

 

I just use Berkshire as my hurdle rate. Will this other idea beat Berkshire? If yes, buy it. (And sometimes this other idea is just holding cash.) If no, buy Berkshire. 

 

Your question depends entirely on the alternatives available to you. 

 

[gfp]

I would not buy Berkshire today if I was in my 20's but I did buy Berkshire when I was in my 20's and I'm not sorry I did.  

 

If I was in my 20's today I would probably prefer Fairfax Financial and Constellation Software at today's prices vs. Berkshire at today's prices.  If you are uncomfortable being fully invested for some reason, Berkshire is probably a better option than holding a bunch of cash.  Berkshire doesn't have to grow a ton to be a decent investment - it just needs to grow in value on a per-share basis.

[Masterofnone]

As stated above, it all depends on context. Over the years I have almost never given friends or acquaintances suggestions of stocks to buy, but in the few times it did happen, I suggested Berkshire because it presented the least moral hazard. Presently, I would explain the probable lack of out-performance and potential of protection if things go way south for an extended period. Remember that WEB himself suggested an index fund. But if it is for someone who has little interest in investing but wishes to own a stock, you could be pretty much certain that they would be better off with Berkshire 40 years from now than if they put that money in treasuries or CDs. 

[Munger_Disciple]

Rephrasing Munger, it boils down to your opportunity cost. I do think Berkshire will be a solid holding going forwrd with very low risk of permanent loss of capital. But it won't shoot the lights out; its size makes significant outperformance highly unlikely. I started buying Berkshire in my thirties and it has been a rock solid investment. But now there are possibly better alternatives like Fairfax. But you have to do your home work and be realistic about alternatives & your investing skills in identifying them. 

 

For LT Berkshire owners it makes all the sense in the world to continue to hold Berkshire even if it underperforms the index over the long term from this point forward due to significant amount of accumulated deferred taxes. For newcomers, the math is much harder; there are better alternatives depending on your skill level. 

Edited May 25 by Munger_Disciple

[redskin]

What does age have to do with investing?  Whether you are 12 or 95?  

[hopspreads]

Thanks all, genuinely useful responses.

 

The opportunity cost framing is the right one. My actual goal is to beat the index, which is why I'm in individual stocks at all. Whether I have the skill to do that consistently is still an open question. I've matched the index over the past 5 years with meaningfully less volatility, which I take as a mild positive signal. Of course, four years is nowhere near enough to distinguish skill from luck.

 

All in all, I'm ready to take on that risk, as the rewards of even slight outperformance over decades are significant, although the opposite is also true. I have half my portfolio in individual picks and the other half in index ETFs as a hedge against my own stupidity.

Edited May 26 by hopspreads

[hopspreads]

10 hours ago, redskin said:

What does age have to do with investing?  Whether you are 12 or 95?  

Really?

 

Time horizon and risk tolerance. A 25-year-old has 40 years of compounding runway, a 95-year-old doesn't. That changes the math on what you should optimize for. A retiree drawing down capital has different constraints than someone who won't touch the money for decades. 

[CassiusKing1]

Then no.  Berkshire is not for you.

[Lazarus]

Any solid investment is good for a guy in his 20s.

 

Put it this way: if a 25 year old invests a mere $10,000 per year in an ETF that earns 10% compounded (the historical average), he would have $3 million by the time he is 60. Adjusting for inflation, it is still worth present day value of $1.4 million. Berkshire will outperform the market, imho, at least for another 10 years. For example, if Berkshire earns 12%, the investment would grow to $4.75 million.

 

Bottom line: time in market is what really matters, along with not losing money. An ETF is perfectly valid investment, and so is Berkshire. We all want to find the big winners, hence we are here. But solid investments at the core of the portfolio are important. 

[Intelligent_Investor]

At current prices and prospects, I'd prefer Fairfax for a longer term investment. If Berkshire/Greg get the opportunity to do massive repurchases, that could change the dynamics, especially if Berkshire can shrink meaningfully.

[Libs]

Another reason to buy BRK- if you have skin in the game, you're more likely to follow the company closely enough to read the AR's and imbibe investing wisdom.

[ScottHall]

On 5/24/2026 at 10:24 AM, hopspreads said:

Is BRK actually a good pick for someone in their 20s?

 

I get the appeal -- capital allocation discipline, huge downside protection and lots of optionality in case of a downturn. But at $1T, the alpha that made early shareholders rich seems structurally capped.

 

Wouldn't a 25-year-old with 40 years of runway be better off in smaller compounders -- the kind of business Berkshire itself used to be?

 

it really depends what your goal and style is. in my 20s i was probably the harshest critic of berkshire hathaway on this message board for reasons you basically outline, it just didn’t have the torque to appeal to me compared to investing in the FANG stocks. even so, i used and continue to use berkshire as a steady hand diversifier for my portfolio, and it has done pretty well in that capacity. it was and is a “role player” and has never been one of my star positions, but it serves its purpose well enough to justify a spot on the roster.

[gfp]

3 minutes ago, ScottHall said:

 

it really depends what your goal and style is. in my 20s i was probably the harshest critic of berkshire hathaway on this message board for reasons you basically outline, it just didn’t have the torque to appeal to me compared to investing in the FANG stocks. even so, i used and continue to use berkshire as a steady hand diversifier for my portfolio, and it has done pretty well in that capacity. it was and is a “role player” and has never been one of my star positions, but it serves its purpose well enough to justify a spot on the roster.

 

ScottHall - or do you prefer to be called something else? - I'm curious if you are still in the copywriting / marketing industry or if that is ancient history by this point

[ScottHall]

2 minutes ago, gfp said:

 

ScottHall - or do you prefer to be called something else? - I'm curious if you are still in the copywriting / marketing industry or if that is ancient history by this point

 

hi gfp. you can call me what you like, nothing like that offends me. i have not done any copywriting for many years now — around the time i stopped posting on this forum, i also quit copywriting because i came to the conclusion it was bad for me from a spiritual perspective. i spent a year running around los angeles all day with my best friend and once she was summoned back east for work i ended up working in finance for three years. while doing that i got really into charity work for spiritual/religious fulfillment, and when i quit that job i ended up starting to do that “full time,” as far as i do anything full time. mostly these days i’ve gotten really into martial arts (bjj) and travel the country to make friends and fight people, and look out for talented young people i can help get traction in life. it’s not much but it means a lot to me, most of my best relationships in life have come from it now.

[gfp]

2 minutes ago, ScottHall said:

 

hi gfp. you can call me what you like, nothing like that offends me. i have not done any copywriting for many years now — around the time i stopped posting on this forum, i also quit copywriting because i came to the conclusion it was bad for me from a spiritual perspective. i spent a year running around los angeles all day with my best friend and once she was summoned back east for work i ended up working in finance for three years. while doing that i got really into charity work for spiritual/religious fulfillment, and when i quit that job i ended up starting to do that “full time,” as far as i do anything full time. mostly these days i’ve gotten really into martial arts (bjj) and travel the country to make friends and fight people, and look out for talented young people i can help get traction in life. it’s not much but it means a lot to me, most of my best relationships in life have come from it now.

 

That's great to hear!  Glad to hear you are doing well.  I have several friends that are super into Brazilian jiu jitsu (I assume that's what the acronym meant) but I have never gotten into that kind of thing myself.  Still in Los Angles?

 

(apologies for cluttering up the invest in BRK in your 20's thread..  there are worse things to do in your 20's than invest in blue chip safe compounders, the OP will be fine either way)

[ScottHall]

4 minutes ago, gfp said:

 

That's great to hear!  Glad to hear you are doing well.  I have several friends that are super into Brazilian jiu jitsu (I assume that's what the acronym meant) but I have never gotten into that kind of thing myself.  Still in Los Angles?

 

(apologies for cluttering up the invest in BRK in your 20's thread..  there are worse things to do in your 20's than invest in blue chip safe compounders, the OP will be fine either way)

 

yeah it’s brazilian jiu jitsu. i also do muay thai but a lot more sporadically, i’m not nearly as good at it and i don’t find it to enliven my soul as much — mostly i do it to have basic striking ability, if i need it. but i never have. they’re both really quite good for cardio, and i’ve put on quite a bit of muscle from consistent practice as well. i’m not in los angeles these days, i moved out of there coming on four years ago, to the pacific northwest. i split about half the time i’m not traveling outside the west coast between san francisco and the pnw each. there’s a really cool warehouse in sf that has an octagon in it, every so often i get to participate in fighting tournaments there too.

[CS]

Anyone have thoughts on the SP500 vs BRK today? Out of those two, which would you buy today for the next 10 years and then the ‘long term’? I’m to make this decision within a 401k soon. No taxable event between rebalancing. 

[throw123]

im betting on berk.

[LC]

20 hours ago, CS said:

Anyone have thoughts on the SP500 vs BRK today? Out of those two, which would you buy today for the next 10 years and then the ‘long term’? I’m to make this decision within a 401k soon. No taxable event between rebalancing. 

 

Today and with a 10 year timeframe? Berkshire but I would rebalance on some correction event. 

 

Long term S&P will eat even Buffett's masterpiece. 

[CS]

I have the SP500 right now. By the time the correction happens I would be down more in the index I think. Thinking if I transfer to BRK the drawl down won’t be as bad.