A common investing strategy that some investors like to employ is to identify some of the worst-performing stocks in each of the major market indexes. The thinking is that if a stock has been beaten down more than the rest then perhaps it is nearing a bottom and could outperform the next year.

Now, this is not always a winning strategy, and often there is a very good reason that a certain stock has fallen as much as it has. However, it definitely doesn't hurt to look, because there are times when the worst-performing stocks one year can turn into winners the next year and over the long term.

Let's try this strategy with one of the greatest investors of all time, Warren Buffett, and the conglomerate that Buffett has run for decades, Berkshire Hathaway (BRK.A 0.64%) (BRK.B 0.54%). I'll look at the three worst-performing stocks (as of Nov. 28) in Berkshire's roughly-$337 billion equities portfolio, and also if each of these stocks is worth buying in 2023.

1. Snowflake

Snowflake (SNOW -0.26%) is primarily a cloud company that sells data storage through a number of flexible pricing plans and packages. The company went public in September 2020 with a ton of hype, and ended up being the largest software initial public offering (IPO) ever. At the end of its first day as a public company, Snowflake had a $70 billion valuation.

But as the Federal Reserve rapidly raised interest rates this year, high-flying tech stocks got hammered -- and Snowflake was no exception, now down more than 60% this year. Berkshire actually invested in Snowflake during the IPO, and has held onto the stock.

While the stock has faltered, Snowflake's performance has been solid this year. Revenue in Snowflake's most recent quarter was up 83% year over year. The company has also continued to increase its customer count nicely, with total customers now surpassing 6,800, 7.5% of which are Forbes Global 2000 members.

Still, the company is not profitable and trades at 22 times forward revenue, and demand for its cloud products might be waning. Considering the huge market opportunity Snowflake has, I think the stock could be a long-term winner. But it may get cheaper yet considering the lofty valuation.

2. Nu Holdings

Nu Holdings (NU -1.21%) is a Brazilian fintech disrupting the banking industry in Latin America, and is another IPO that Berkshire invested in. Similar to Snowflake, it went public at a hefty valuation of about $41 billion, but has seen its stock fall more than 55% this year.

Since then, high inflation, rising interest rates, and concerns about the Brazilian economy have significantly cut into that valuation. But all in all I think Nu has had a good year. Through the first nine months of 2022 the company added close to 11 million customers, and now has more than 70 million total customers, or roughly 39% of the Brazilian adult population.

The bank has also continued to expand its offerings in other Latin American markets such as Mexico and Colombia, while also keeping an eye on profitability and generating a small $7.8 million profit on more than $1.3 billion of revenue in the third quarter.

The company is not generating as much revenue per customer as incumbent banks in the region, but it's making progress, with some of its most mature customer cohorts really starting to have higher monthly revenue.

Although the journey may not always be linear, I do think Nu is a good long-term buy considering the exciting markets it operates in and the runway for enhanced profitability over time.

3. RH

The luxury home furnishing company RH (RH 0.64%) has struggled this year and seemingly followed trends in the housing market, as higher interest rates have really started to put a dent in homebuyer demand and even home prices. The stock is down about 49% this year.

Net revenue of roughly $991 million in the second quarter of the year was down roughly 46% year over year, while the cost of goods sold still makes up more than 47% of net revenue, which is down from 51.6% one year ago.

RH (Restoration Hardware before a 2017 name change) caters to a high-net-worth clientele, but even this segment may not spend as much as if the housing market takes a big enough hit. Berkshire has actually been buying the dip on RH and other companies in the home-building sector.

RH does have a powerful brand, which we know Buffett is a fan of, and while housing prices might decline they are expected to avoid a Great Recession-like scenario due to the lack of housing inventory. So while there may be more pain to come for RH, I would expect the stock to be OK in the long term.