In a volatile market environment, investors are searching for stocks that can protect their portfolios during downturns without sacrificing long-term growth potential. Two companies are standing out as resilient performers during recessions, offering investors a cushion against market turmoil while still delivering solid returns. These stocks have drawn the attention of renowned investor Warren Buffett, known for his successful track record in navigating challenging market conditions.

One of Buffett's flagship investments, Berkshire Hathaway (BRK.A) (BRK.B), has proven its ability to outperform the market even during the financial crisis of 2008. While many financial stocks were crumbling, Berkshire weathered the storm and exceeded the performance of the S&P 500. Although its shares experienced some decline during the crisis, Berkshire's profitability and sound business model allowed it to bounce back. From 2010 to 2015, Berkshire stock outperformed the S&P 500 by more than 20%, demonstrating its resilience and long-term potential.

One of the key factors contributing to Berkshire's success is its diversified business model, supported by its insurance subsidiaries that generate investable cash throughout economic cycles. This enables the company to maintain profitability and seize investment opportunities when capital becomes scarce. During the financial crisis, Berkshire made a strategic $5 billion investment in Goldman Sachs, taking advantage of advantageous terms. This ability to navigate economic conditions and capitalize on opportunities positions Berkshire for success in the next downturn.

Another stock that caught Warren Buffett's attention is Chubb (CB), a property and casualty insurer. Buffet has been gradually increasing his stake in Chubb, which currently stands at around $7 billion. Chubb, like Berkshire, proved resilient during the financial crisis, outperforming the S&P 500. In the five years following the recession, Chubb's stock soared by 157%, surpassing the gains of both Berkshire and the broader market.

A key driver of Chubb's outperformance lies in its prudent capital allocation strategy. While some insurers faced trouble due to risky financial instruments, Chubb remained conservative, maintaining positive returns on invested capital during the crisis. The company's focus on consistent profitability allowed it to invest strategically throughout market cycles. While competition intensified and insurance pricing softened, Chubb opted for a longer-term approach and made substantial acquisitions that positioned it for record profits.

Although history suggests that Chubb's shares may experience a decline in value during the next recession, its disciplined approach to capital management indicates that the company will likely use the downturn as an opportunity to set the stage for another period of outperformance.

Investors seeking protection during market downturns without sacrificing long-term gains may find solace in these two stocks backed by Warren Buffett's astute investment strategy. Their track records of weathering recessions while still outperforming the market bode well for investors looking to fortify their portfolios and position themselves for future success.