As Warren Buffett’s reign ends, fans should sell Berkshire — and buy these stocks instead

If you're a fan of investment legend Warren Buffett (and who isn't?), this is as good a time as any to sell the stock of his investment vehicle Berkshire Hathaway.

And to move your money instead into five stocks that Buffett himself has praised extravagantly, and which he thinks resemble Berkshire BRK.A BRK.B in its early days.

Buffett himself, now 96, just stepped down as Berkshire Hathaway chairman , though he will remain on the board as a director. He had already handed over the reins as chief executive to hand-picked successor Greg Abel at the end of last year.

Berkshire's longtime vice chairman Charlie Munger, Buffett's Svengali, died at age 99 three years ago.

Without the dynamic duo in charge, you could argue that Berkshire is just another very big company. But then it already was.

Shocking to say, but Berkshire Hathaway's stock has actually not outperformed the broad S&P 500 Index SPX in about 30 years. Don't believe me? Check out the chart below, from FactSet, which shows the total return on Berkshire Hathaway relative to (i.e., divided by) the total return of the S&P 500, which you can own through a low-cost index fund.

A few things stand out. Berkshire, a conglomerate of high-quality businesses with a strong balance sheet, has outperformed dramatically during periods of extreme market stress. Look at the spikes — relative outperformance — during President Donald Trump's ill-fated "liberation day" fiasco early last year, or during the global financial crisis of 2008-'09. Going further back, the stock also did much better than the S&P 500 during the stock-market slump of the early 2000s, and even the Asian financial crisis of 1998. (But see too the massive underperformance during the dot-com bubble of 1999-2000, when Buffett famously refused to join the insanity and the stock got shunned.)

Yet the overall trend is sideways. Actually, during every market panic of the past 30 years, you were better off selling Berkshire and buying the S&P 500 than doing the reverse.

That is an astonishing reversal from Berkshire's glory days during the 1970s, 1980s and early 1990s when it crushed the overall market by a wide margin.