Warren Buffett says the coronavirus can not stop America, or Berkshire Hathaway
May 05 2020
The net lost totaled 49.75 billion dollars in the first quarter, or 30,653 dollars per Class A share and 20.44 dollars per Class B share, compared with a net earning of 21.66 billion dollars a year ago, Berkshire said in a news release.
However, the devastating economic effects of the pandemic have hit hard at Berkshire Hathaway's wide range of investments and the need for social distancing forced Buffett to address an annual meeting of shareholders in a livestream.
"We will not fund a company. where we think that it is going to chew up money in the future".
"We did not take out anything like $7 or $8 billion and that was my mistake", Buffett said at the company's virtual annual meeting. Edward Jones analyst Jim Shanahan said it was striking that Buffett didn't find any bargains to invest in at the end of the first quarter.
The Berkshire Hathaway previously held shares of United Airlines, American Airlines, Southwest Airlines and Delta Airlines, worth over 4 billion USA dollars in December, but stocks are down by 69.7 percent, 62.9 percent, 45.8 percent, and 58.7 percent this year, respectively, according to a report from CNBC.
"It is basically that we shut off air travel in this country", he said. In March, he told Yahoo Finance that he wouldn't be selling airline stocks.
Berkshire has been among the biggest shareholders in the four largest USA airlines - American, Delta, Southwest and United.
Berkshire Hathaway had paid US$7 billion to US$8 billion, but "we did not take out anything like that", he said. Its stock price has fallen 1 percent in 2020, compared with a 12 percent drop in the Standard & Poor's 500, despite Buffett's prediction that Berkshire would outperform in down markets. Maintaining that discipline is gratifying to longtime investors, said James Armstrong, who manages money, including Berkshire shares, as president of Henry H. Armstrong Associates.
Buffett underscored that the world had changed after the pandemic for the airline industry. No shareholders were present at the meeting this year, nor was Vice Chairman Charlie Munger. Buffett, 89, shared the stage with a top deputy, Greg Abel, who runs Berkshire's non-insurance operating units. Still, he ended the meeting on his classic optimistic note that people should never bet against America. Ajit Jain who manages Berkshire's insurance businesses is also considered to be a leading candidate to be the company's next CEO.
Berkshire's quarterly operating profit rose 6% to $US5.87 billion, from $US5.56 billion.
3️⃣ And Berkshire's airline selloff is a sign of tough times. "And I don't know how it's changed and I hope it corrects itself in a reasonably prompt way", he said.