History Says a Bear Market Is Coming Eventually. Here's the 1 Move the Smartest Investors Are Making Right Now.

Historical data show U.S. expansions averaged 64 months from 1945-2020 versus roughly 76 months for the current cycle, while bear markets have occurred about once every six years with a median 33% decline. Waiting for a 20% S&P 500 drop historically took three years on average and, by the eventual bear-market entry, the index was on average 30% above its initial level. Berkshire Hathaway ended 14 quarters of net equity selling by buying $23.5 billion of stocks in Q2 2026 versus $3.7 billion sold, while Pershing Square initiated six positions; however, Vanguard forecasts subdued 10-year annualized U.S. equity returns of 4.2%-6.2% amid stretched valuations.

Analysis

The actionable signal is not broad-equity direction but the identity of businesses that compound through a low-index-return regime. V, MA, ICE, SPGI and MSCI monetize transaction volumes, asset values, issuance and market activity; their earnings can still outgrow nominal GDP, but the distinction matters: V/MA are most exposed to consumer and cross-border volume deceleration, while ICE/SPGI/MSCI retain more pricing power and benefit from volatility, debt refinancing and the secular shift toward indexed/private-market data.

BRK.A's return to net buying modestly reduces the probability that management sees its opportunity set as wholly impaired, but its large liquidity reserve is the more important second-order variable. It gives Berkshire a unique ability to provide capital during a credit or liquidity shock, when acquisition multiples and preferred-equity terms become attractive; that optionality can support relative performance even if its public-equity marks decline. The reported activity is not independently sufficient to infer a durable change in management's valuation view until the disclosed holdings and operating cash-flow deployment are known.

Near term (days to weeks), this is low-information retail-flow content rather than a fundamental catalyst. Over 1-3 months, a softening labor/consumption backdrop would likely widen V/MA underperformance versus ICE/SPGI/MSCI as payment-volume estimates reset; in a risk-off episode, data/ratings businesses may initially de-rate with the market but have a more credible earnings floor. Over 6-18 months, elevated starting multiples make index returns increasingly dependent on earnings delivery, favoring quality compounders funded by recurring revenue over passive beta.

Contrarian view: simply deploying capital ahead of a correction is not evidence that valuations are attractive; managers with permanent capital can tolerate mark-to-market losses that leveraged or benchmarked investors cannot. The better expression is to own durability while explicitly financing it with exposure to the most valuation-sensitive index segment, rather than treating a long market history as a timing signal.

Key Decisions for Investors

• Initiate a 3-6 month relative-value basket: long ICE and SPGI, short equal-dollar V and MA. Target 8-12% relative return if consumer spending slows while issuance/volatility and contractual pricing support information-exchange earnings; exit if V/MA organic payment-volume growth remains above consensus for two consecutive monthly data cycles or ICE/SPGI cut full-year guidance.
• Accumulate BRK.B on broad-market drawdowns rather than chase the reported purchase activity; use a 5-8% S&P 500 pullback as entry framework. The thesis is downside-relative resilience plus crisis-deployment optionality over 6-18 months, invalidated by sustained deterioration in insurance underwriting, BNSF volumes, or cash deployment into low-return acquisitions.
• Avoid adding index beta solely on this item. For investors requiring equity exposure, prefer a barbell of BRK.B and ICE/SPGI over cap-weighted SPY for the next 6-12 months; reassess if real rates fall materially and earnings revisions broaden beyond mega-cap technology, which would restore a stronger case for broad-index upside.
• Keep NFLX and ALC on a watchlist, not as copy-trades: their inclusion provides no disclosed position sizing, cost basis, or underwriting assumptions. Require independently visible catalysts—NFLX advertising-margin acceleration or ALC procedure-volume/guidance upside—before initiating.