The most obvious and proven example is Berkshire Hathaway Inc. (NYSE:BRK.B).
Although Warren Buffett officially stepped down at the end of 2025, nothing significant has changed about the empire he built. The capital allocation philosophy is intact, the balance sheet remains fortress-like, and the collection of operating companies and stock holdings is as diversified and cash-generating as ever.
It’s also one of the largest single stock positions in my own portfolio. If I had to sell everything else and buy just one stock to hold for decades, it would be Berkshire Hathaway. Here are three reasons why.
Diversification supported by a strong balance sheet
Berkshire Hathaway is diversified in a way that few individual stocks can match. On the public side, it owns large stakes in leading insurance, energy, consumer products and technology companies. On the private side, the company owns entire businesses that generate stable cash flow regardless of market conditions.
That includes household names such as GEICO, BNSF RailroadAnd Duracellalong with dozens of other operating companies involved in manufacturing, utilities, retail and services. These companies do not deal in vehicles. They are paid ATMs that fund everything else Berkshire does.
Then there is the balance. Berkshire has about $381 billion in cash and short-term government bonds. That war chest gives it an option that no other publicly traded company really has. In practical terms, Berkshire could buy most companies outright without raising capital, diluting shareholders or relying on debt markets. When markets panic, Berkshire can act while others are forced to sell.
The succession risk has already been addressed
Many investors worry that Berkshire would be a different company without Warren Buffett. In reality, the succession has been planned for years.
Operational leadership is included Greg Abelwho oversees Berkshire’s non-insurance businesses and has long been deeply involved in capital allocation decisions. On the insurance side Ajit Jain continues to operate one of the most disciplined and profitable insurance businesses in the world.
This is not a situation where one charismatic founder disappears and leaves a vacuum. The decision-making framework, culture and risk discipline are embedded. Today, Berkshire is run by a team that has led the company for years.
Built-in tax efficiency through internal composition
Berkshire doesn’t pay dividends, and that’s intentional. Instead of sending cash to shareholders and raising taxes, the company reinvests internally or buys back shares when they trade below intrinsic value.
This approach makes it possible to increase capital within the company without annual tax leakage. Redemptions increase the ownership interest of each remaining shareholder without generating taxable income. Over longer periods, this can be much more efficient than taking dividends and reinvesting them yourself, especially in taxable accounts.
For patient investors, Berkshire essentially acts as a tax-efficient composite vehicle wrapped into one stock.
How to Invest in Berkshire Hathaway
Most investors reach Berkshire via Class B shares (BRK.B)which are traded on the NYSE in US dollars and are more affordable than the Class A shares. If you are a Canadian investor, this means you will need to convert Canadian dollars to US dollars through your brokerage.
Because Berkshire doesn’t pay dividends, it can be particularly attractive in taxable accounts, where ongoing distributions would otherwise create a tax burden. As always, the right account depends on your broader portfolio and tax situation, but structurally Berkshire is built to reward long-term investors who are willing to stay put.
An additional option for Canadian investors is the Berkshire Hathaway CDR (TSX:BRK)which trades in Canadian dollars and eliminates the need for currency conversion, although it does come with an additional management fee.
#buy #hold #stock