Better Buy: Berkshire Hathaway or Bank of America

The past several years haven't been great for Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) investors. Berkshire underperformed the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) over the past one, three, five, and even 10-year periods. One reason for the underperformance is Buffett's penchant for investing in banks, which make up a massive portion of the Berkshire stock portfolio and have been crushed by the economic impact of the coronavirus pandemic.

Included in that collection of laggards is Bank of America (NYSE: BAC), which has performed even worse than Berkshire. But let's look past the recent stock performance. Bank of America's scale is an enormous benefit, while Berkshire remains one of the strongest companies in the world, generating enormous cash flows in nearly any economic environment. Moreover, both trade at very attractive valuations that could lead them to deliver solid returns for investors going forward. 

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Source Fool.com