The #1 safest stock amid tariff and market chaos?

Maybe better than Berkshire, and with a secret weapon (literally)?

Markets are tumbling today. We’re all witnessing the global economy getting pushed into disarray.

Those drastic tariffs are hitting every part of the world. Stocks are in freefall and companies are forced to rethink strategies. History suggests a lot of companies will struggle to adapt and/or go bust.

As an investor, it feels impossible to predict who comes out ahead in all this.

So, now what?

Safety first

No one wants to lose money. In general, I give a lot of weight to safe investments.

I’m thinking even more about safety and robustness now.

With this in mind, I thought I’d share a quick thought. A reflection on what could be the safest stock for me to buy in all this, and why.

I realized this company also has a secret weapon or two in its arsenal to help if things go really bad.

The company:

Investor AB.

Who?

Investor (INVE) is a Swedish investment company, with large stakes in several market-leading companies. Sort of a Berkshire of Europe.

I’ve written about them before. They’re a good investment in any climate.

But there are six things I like extra much about them right now in the middle of this turmoil.

1. High-quality, robust, diverse holdings

There are a lot of investment companies out there.

But Investor may have the highest quality and most robust holdings of them all.

Big, blue-chip, global market leaders that have stood the test of time, including:

• ABB (industrial giant)

• AstraZeneca (pharma giant)

• Ericsson (telecoms giant)

• Nasdaq (stock exhange)

• Atlas Copco (industrial)

• SEB (big bank, who I work for)

With Investor you get a significant and diverse stake in some of the strongest companies around.

2. Diverse

Maybe the key word in that last sentence is diverse.

Because, again, there’s no telling who comes out of all this ahead.

But Investor has a wide-ranging mix of companies with strong market presence. I’m guessing some of their holdings will suffer.

But not all. Some (or most) will come out alright. They feel robust.

Diversity isn’t always good.

I get there are times when a focused and concentrated fund of fewer and less diverse holdings can be the better bet.

Could be wrong, but I’m feeling like this is not that time.

3. Family-run and crisis-tested

Investor is also an old company, and it’s family-owned.

The company has roots from the mid-1800s. It’s lasted through the Depression, two world wars, oil and currency crises, the financial crisis, you name it.

It, and a lot of the key holdings, are time-tested.

It’s also family-owned. By a highly respected family at that.

Plenty of studies show a lot of outperformance for companies that remain founder and family-owned.

They just have a long-term approach to running the business, and don’t panic when crises hit. So that’s a big plus.

Investor also has a strong financial position. Debt/equity of 0.1.

This is no small thing either. Debt can be fine in good weather, but crush even the best of companies when things turn bad.

4. Secret weapons (literally)

Right now I think Investor also has a couple of secret weapons. Two holdings that could buoy them as conditions deteriorate.

• SAAB. They have significant holding in the Swedish fighter jet and weapons manufacturer SAAB. With geopolitical tension rising, SAAB has been booming. As markets drop today, SAAB is up 2%. It’s also up 70% this year and nearly 800% in the past five years.

• EQT. Investor has a key stake in EQT, the big and fast-growing private equity company. EQT is in good financial shape. As prices drop, you can expect EQT to be there scooping up assets. I see this as another growth engine for Investor.

So these could help Investor even through the downturn.

Although it’s of course scary and sad that the world wants to ramp up weapon buying.

5. Valuation

Investor is valued fairly.

A great thing about Investor is you can see pretty clearly what its worth.

For investment companies, I think you only need to look at their NAV. Net asset value. The sum of their holdings.

Investor also owns a strong set of unlisted companies, so it’s not an exact science.

But in general, it’s possible to get a good idea of their NAV.

And they typically trade about 5-10% below that value.

Right now they’re at around 7% below NAV. So you know you’re not over-paying. They also have a book value of around 1.

If you wanted to buy SAAB alone right now, you’d have to pay a PE of around 50x.

With Investor, you get all those great robust companies and management at a 7% discount to holdings.

6. Returns

I’m not saying Investor won’t drop. They’re down 4% today and tend to drop a lot in downturns, including 2020 and 2022.

But when they come back, they usually come back strong. 20% average return in the past five years and 14% since the financial crisis in 2008.

Yes - an average 14% return for a decade and a half.

This means it’s also a great investment to keep after we get out of the downturn.

Runner ups

Investor is similar to Berkshire in a lot of ways.

Berkshire could be a great choice too. Considering its huge pile of cash and sheer size.

Also, Berkshire is American with mostly US holdings.

When things get shaky in the world, there can be a huge flight to safety to the US. Despite tariffs. So that could help US companies.

But Berkshire’s American-ness is also a negative. The world is turning away from US products. Boycotting them even.

And thinking out loud, the US seems intent on sort of disrupting itself right now.

While in Europe, there seems to be a rising sense of urgency, solidarity and need to cooperate.

This maybe bodes well for Europe vs the US. Who knows?

Another big family-owned investment company with strong holdings is Exor, based in the Netherlands.

But they don’t have quite the same track record. Investor makes more sense to me. Especially with SAAB and EQT.

Just my thoughts

This is not a recommendation.

These are just my thoughts today as markets tumble and reality sets in on tariffs.

I wanted readers to know what at least one investor (me) is thinking about in all this.

We’ll see how it all plays out.

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Thanks for reading. Good luck out there and talk to you soon.

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Joel Sherwood invests each week and writes about what he buys, learns and earns. He’s a former financial journalist for Dow Jones and The Wall Street Journal, and a current bank employee. He lives in Stockholm, Sweden and started the Sherwood Investment Letter in January 2025. Purchases are not recommendations.