Berkshire Hathaway Is Down 6%. What History Says Now

Berkshire Hathaway's 348-Day Drawdown Just Eased

Berkshire Hathaway Inc. (BRK-A) is down 5.6% from its all-time high as of July 7, 2026, having just exited the yellow zone after 348 days. The Drawdown Severity Score™ has improved to 1.3, which represents a Slightly Elevated level in the green zone. In 49 comparable prior recoveries where the stock dropped 5% or more, Berkshire Hathaway Inc. (BRK-A) moved to the next zone within an average of 244 days.

Berkshire Hathaway Exits the Yellow Zone

The transition of Berkshire Hathaway Inc. (BRK-A) from the yellow zone to the green zone represents a significant shift in its risk profile. The yellow zone indicates a period of moderate risk where a stock's price correction has either deepened or persisted longer than its typical historical baseline. For a stock like Berkshire Hathaway, which is widely considered a defensive anchor for many portfolios, spending 348 days in a drawdown is a notable departure from its usual behavior.

As of July 7, 2026, the stock has clawed its way back to a current price of $764258.06. This recovery toward its peak of $809350.00 has reduced the total drawdown to -5.6%. This recovery has lowered the Drawdown Severity Score™ to 1.3, placing the asset in the green zone under the classification of a Slightly Elevated risk level. This shift indicates that the selling pressure that kept the stock depressed for nearly a year has begun to dissipate, allowing the price to stabilize.

During the period spent in the yellow zone, market participants watched closely to see if the correction would worsen into a more severe red zone drawdown. Instead, the stock demonstrated resilience, consolidating and slowly grinding upward. This slow but steady recovery highlights the changing dynamics within the broader market, where defensive equities are finding renewed support.

How Berkshire's Recovery Compares to Peer Assets

To understand the significance of this recovery, we must compare Berkshire Hathaway's behavior to other mega-cap equities. In the financial and conglomerate sectors, large-scale assets often experience long periods of consolidation after reaching record highs. For example, when major financial institutions like JPMorgan Chase & Co. (JPM) or defensive giants like Johnson & Johnson (JNJ) enter a drawdown, their recovery timelines can vary widely based on prevailing macroeconomic conditions.

Our data shows that fast-growth technology companies like Apple (AAPL) or Microsoft (MSFT) tend to experience much sharper, more volatile drawdowns. These technology stocks may drop 10% or 15% rapidly but often recover to their previous highs within 90 to 120 days when market liquidity is favorable. In contrast, Berkshire Hathaway's 348-day drawdown demonstrates a much slower, more deliberate consolidation process. The stock did not plunge precipitously, but instead ground sideways for almost a year before reclaiming its green zone status.

This slow recovery characteristic is typical of diversified conglomerates. Because Berkshire's portfolio is tied to heavy industries, insurance, utilities, and railways, its price action reflects the broader economy rather than speculative momentum. While tech peers might offer rapid rebounds, Berkshire's steady climb out of the yellow zone offers a different kind of risk-adjusted profile that appeals to conservative investors.

Historical Drawdown Patterns for BRK-A

Analyzing Berkshire Hathaway's historical record provides essential context for evaluating the current 348-day period. Over its trading history, our database has recorded 255 total historical drawdown events for this stock. The vast majority of these pullbacks have been shallow and short-lived, with an average maximum drawdown of -3.6% and an average drawdown duration of 54 days.

The current event, lasting 348 days with a maximum depth of -5.6%, clearly represents an outlier compared to the average historical pullback. However, when we isolate more severe pullbacks, we get a clearer picture of how the stock behaves during prolonged market cycles. Specifically, Berkshire Hathaway has dropped 5% or more from its all-time high 49 times in its history.

In these 49 comparable deeper drops, the average duration of the drawdown was 244 days. The fact that the current drawdown has lasted 348 days indicates that the current consolidation phase has been even more prolonged than the historical average for comparable 5% drops. This extended duration suggests that the market has taken longer than usual to digest Berkshire's previous run-up to its all-time high of $809350.00.

The table below outlines how the current drawdown compares to Berkshire's historical averages and comparable 5% or deeper pullbacks:

This historical perspective shows that while a 348-day drawdown is unusually long, it is not entirely unprecedented for Berkshire Hathaway. When the stock breaks below the 5% threshold, investors should historically expect a multi-month process before the stock can reclaim its previous highs.

Valuation Context and Historical Multiples

As of the valuation snapshot on 2026-07-06, the price drawdown of -5.6% contrasts with historically elevated valuation multiples relative to the asset's own history. The Price-to-Sales (P/S) ratio stands at 2.9, which is in the 98th percentile of its own daily P/S record since 2006-07-06, well above its historical median of 1.8. Similarly, the EV-to-EBITDA (EV/EBITDA) ratio is 16.4, placing it in the 85th percentile of its own daily record since 2006-07-06, compared to its historical median of 10.8. This indicates that while the stock price remains below its all-time high, its valuation multiples are positioned toward the upper end of their historical ranges.

Fundamental Drivers and Market Context

Several fundamental and macroeconomic developments have influenced Berkshire Hathaway's price action over the course of this drawdown. According to Barron's, Berkshire's stock recently received a significant lift as the massive momentum in "Magnificent Seven" technology stocks began to cool. As investors sought refuge from high-valuation tech names, capital rotated back into stable, cash-generating businesses, benefiting Berkshire's diversified portfolio.

In addition to broader market rotation, company-specific news has kept the conglomerate in the headlines. A report by Simply Wall St suggested that Berkshire Hathaway could be 19% undervalued based on Greg Abel's recent high-profile portfolio moves. While outside analysts debate the intrinsic value of the company, our proprietary data focuses strictly on the historical percentile of the stock's actual multiples, showing that its current multiples remain historically high relative to its own past.

Furthermore, according to The Motley Fool, Greg Abel is already actively reshaping Berkshire's operational playbook, particularly in its energy and infrastructure divisions. This leadership transition is being watched closely by the market as Warren Buffett delegates more responsibility. Meanwhile, Yahoo Finance reported on why Warren Buffett paused his traditional stock donations to the Gates Foundation, sparking discussions about capital preservation and the future distribution of his massive equity stake. These news items highlight the complex mix of governance, portfolio reshuffling, and market rotation that has defined Berkshire's path back to the green zone.

Measuring the Remaining Path to All-Time Highs

With Berkshire Hathaway Inc. (BRK-A) now residing in the green zone with a Drawdown Severity Score™ of 1.3, the immediate risk of a deeper breakdown has decreased. The stock's current price of $764258.06 is 5.6% below its all-time high of $809350.00. To fully erase this drawdown and establish a new record high, the stock must gain approximately 5.93% from its current level.

The transition out of the yellow zone indicates that buyers have stepped in to support the stock at these levels, ending the prolonged period of moderate risk. However, because the valuation multiples remain in high historical percentiles as of 2026-07-06, the stock may continue to experience consolidation as earnings catch up with the valuation. Investors will want to monitor the Drawdown Severity Score™ closely to see if the stock can maintain its position in the green zone or if macroeconomic headwinds will push it back into the yellow zone.

Tracking the exact days in drawdown and the severity score provides a systematic way to assess risk without relying on market hype. As Berkshire Hathaway continues its recovery journey, its historical patterns suggest that patience remains a key factor for those analyzing its long-term price cycles.