By Jonathan Stempel

NEW YORK (Reuters) - It's a bear market for Warren Buffett's Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research)(BRKb.N: Quote, Profile, Research), too.

The shares of the billionaire's insurance and investment company have dropped more than 20 percent from their most recent peak, the first time that has happened since February 2003.

A 20 percent decline is a traditional sign of a bear market in stocks. The Nasdaq .IXIC went through that level on Feb 6, the Dow Jones industrial average .DJI on July 2 and the Standard & Poor's 500 .SPX on July 9.

Berkshire Class A shares had through Friday fallen 22.5 percent from their December 11, 2007 record high of $151,650. In Monday afternoon trading, they fell another $1,650 to $115,850. Class B shares trade at about 1/30th of the Class A price.

"It makes a lot of sense for this to happen," said Vahan Janjigian, the author of "Even Buffett Isn't Perfect," in an interview.

"Insurance makes up the bulk of Berkshire profits, and they can't command the premiums they had in the recent past," he continued. "I think it's even good news that Berkshire stock is down only 20 percent. When you compare it with Citigroup (C.N: Quote, Profile, Research), Fannie Mae (FNM.N: Quote, Profile, Research), Freddie Mac (FRE.N: Quote, Profile, Research) or other large financial companies, Berkshire is actually doing quite well."

Berkshire was not immediately available for comment.

At Berkshire's May 3 annual meeting in Omaha, Nebraska, Buffett said there was "absolutely no question" the company's returns would decline. Shareholders who expected performance to replicate the past should sell their stock, he said.