Value is Dead - NVDA (57% up last year) vs. BRK (down 5%)

Value Investing with Sven Carlin, Ph.D.•Jun 3, 2026

Summary

Sven addresses a viewer's frustration with Berkshire Hathaway's modest returns compared to Nvidia's surge, using this as a starting point to discuss the fundamental difference between investing and speculation, especially in what he perceives as a bubble market. He draws parallels to the dot-com bubble, noting how Berkshire underperformed significantly then but protected capital and recovered strongly when the bubble burst, while the Nasdaq suffered massive declines. He cites Jeremy Grantham's view that the current market, especially in semiconductors, is another bubble, characterized by irrational exuberance and a focus on price momentum rather than fundamentals.

Sven champions long-term value creation over speculative gains, outlining his views on specific companies:

**Berkshire Hathaway (BRK.B):** Sven argues that Berkshire Hathaway represents true long-term value investing, contrasting its steady compounding with the speculative current market. He highlights its historical resilience, noting its strong recovery after the dot-com bubble burst. Sven projects Berkshire's operating earnings of $44 billion (around $40 billion in value creation) could double to $80 billion annually in 10 years, assuming a 7.2% growth rate. His valuation model suggests a 7% expected return with a P/E of 25, implying an intrinsic value near $1.966 trillion. While personally targeting 10% returns, which would require Berkshire to be half its current price with a P/E of 15, he firmly believes it's the "best way to go for 95% of investors" due to its ability to deploy its $390 billion cash pile in downturns and consistently compound equity.

**Nvidia (NVDA):** In stark contrast, Sven views Nvidia and the broader semiconductor sector with extreme caution, likening their recent surge (Nvidia up 60%, semiconductor index 3x) to a speculative bubble. He reminds viewers of the sector's past volatility, including an 80% fall in 2000. Sven explicitly warns that if Nvidia is indeed in a bubble, its chip margins could drop to zero within three years, potentially leading to "absolute destruction" of the company and investor capital, making its long-term future highly uncertain.

Sven concludes that while Berkshire Hathaway offers certainty and capital preservation over decades, the future of semiconductors is highly uncertain, likening the current market to a casino focused on quick gains rather than sound investment.

Mentioned Stocks

NVDA

Sentiment: SELL

Reasoning: Sven expresses extreme caution regarding Nvidia, framing its recent 60% surge as part of a speculative bubble in the semiconductor sector, similar to the dot-com era. He highlights the historical volatility of semiconductors, including an 80% drop in 2000. Sven warns that if the current situation is indeed a bubble, Nvidia's chip margins could evaporate to zero within three years, leading to "absolute destruction" of the company and capital. He questions the long-term viability and certainty of investments in the semiconductor space compared to the stability of Berkshire Hathaway.

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BRK.B

Sentiment: BUYAction: RECOMMENDED

Reasoning: Sven champions Berkshire Hathaway as a reliable long-term investment, offering consistent equity compounding and capital preservation regardless of market conditions. He contrasts its stability with the speculative nature of the current market, noting its historical resilience during the dot-com bubble crash. Berkshire's operating earnings of $44 billion are projected to double in 10 years at a 7.2% growth rate. He estimates a 7% expected return based on a valuation model (with a P/E of 25, intrinsic value around $1.966 trillion), emphasizing its ability to deploy its $390 billion cash pile during downturns. While he notes a personal 10% return target would require the stock to be half its current price (with a P/E of 15), he still considers it "the best way to go for 95% of investors."

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