Berkshire Hathaway (BRK)

BRk has consistently made larger returns than the market as a whole.Plus, BRK is not correlated with the Market. More importantly, BRK's breakup value is far greater than its current share price. Buffet's long-term track record is indisputable.

It’s very clear that Buffett’s investment philosophy - capitalizing on value situations in companies that enjoy strong, sustainable competitive advantages in secular growth markets, and that will perform very well over the long term - has worked much more often than not. And most of the “mistakes” that some analysts point to are actually linked overwhelmingly to short-term market movements that could easily reverse.

he short-term weakness in the U.S. economy - which is reflected in the weakness of Berkshire’s stock price - makes Berkshire a bargain itself right now. And with Buffett at the helm, Berkshire will continue to be one of the most-profitable investments you’ll be able to find anywhere in the world.

But this is not a short-term play - or a stock for trading. It’s a long-term core holding - indeed, one of the best you’ll find. Therefore, I would buy Berkshire Hathaway in incremental stages on any weakness between now and the end of the year, as market conditions improve and tax-loss-selling on U.S. stocks abates.

For all the contributions of the nearly 70 businesses Berkshire owns, it is essentially an insurance company. The unit produced $3.3 billion (down from $3.8 in 2006) of the company's $13 billion in earnings in 2007. Further, $37 billion of the company's reported $44 billion in cash and cash equivalents belong to insurance, proving to be another stellar run for the company.

According to Buffett: Finally, our insurance business – the cornerstone of Berkshire – had an excellent year. Part of the reason is that we have the best collection of insurance managers in the business – more about them later. But we also were very lucky in 2007, the second year in a row free of major insured catastrophes.

Berkshire is fairly valued for its current business environment. The last time Berkshire represented "value" was exactly 8 years ago, in March 2000, at the height of the dot.com bubble. Since then its share price has risen 256% even after the current drop.Does this mean today Berkshire buyers will not make money? No. They assuredly will.