Will the stock market crash? I don’t know. That’s why I own this recession-proof stock.

The stock market has rebounded nicely from the bear market lows of 2022, and most major indexes are within striking distance of their all-time highs. With expectations of lower interest rates and continued strength in megacap tech stocks, things have been going pretty well for equity investors.

However, it is important for all investors to know that the stock market will crash again — it’s just a question of when. A crash could come next month, next year, five years from now, or it could come tomorrow. We have no idea and there are many potential factors that could cause an accident. But stock market crashes are a normal part of becoming a long-term investor.

I aim to fill my own portfolio with stocks that should do well over the long term, whether the market crashes or not. But there is one in particular that I would be confident in owning during a market crash and that is Berkshire Hathaway (BRK.A 0.57%) (BRK.B 0.58%).

A collection of recession-proof businesses

First, there are three major components of Berkshire’s business: its operating businesses, its stock portfolio, and its cash. The stock portfolio is clearly not immune to a stock market crash (although the types of stocks Berkshire owns tend to hold up better than most).

When it comes to operational businesses, there are over 60 different subsidiary businesses. Some of them could be vulnerable to market crashes and recessions, but Berkshire’s largest subsidiaries should be fine. GEICO and Berkshire’s other insurance operations are a great businesses and are very close to being truly recession proof. After all, people still pay their car insurance when times get tough.

Berkshire Hathaway Energy is another massive component of the company and is also very recession-proof. Even in hard times, electricity and gas bills still need to be paid. I could go on — BNSF Railroad, Pilot Travel Centers, and Duracell are also great examples of businesses that should perform well regardless.

Berkshire’s cash is the main differentiator

To be fair, there are plenty of recession- and crash-proof businesses you can invest in. There is no shortage of utility stocks, for example. But what makes Berkshire different is its unmatched financial flexibility.

At the end of the second quarter, Berkshire had $277 billion in cash and short-term investments on its balance sheet. For now, most of it is in Treasuries that pay Berkshire about 5% annually.

However, if a market crash or prolonged recession comes, this stockpile of cash gives Warren Buffett and his team a massive war chest to take advantage of the bargains. Berkshire can use it to buy stocks that have fallen or negotiate unique investment deals. Actually, Berkshire’s Bank of America the investment can be traced back to a $5 billion preferred stock deal with warrants that Buffett negotiated in the wake of the financial crisis.

Berkshire in a market crash

Berkshire’s stock portfolio may become volatile in a crash, but its operating businesses should remain profitable, and the cash may actually allow Berkshire to emerge from a market crash even stronger than it entered.

I’m not saying Berkshire’s share price it will not fall in a market crash. It can, and has done in previous accidents. But the point is that the business is in a better position than any other large-cap company to ride through a market crash unscathed.