But the billionaire Berkshire hathaway (( The CEO revealed on Saturday that Berkshire Hathaway had recently sold all of its stakes in the company’s four airline stocks, calling it a mistake to invest in the industry. )
Berkshire Hathaway revealed in early April that it had reduced its stakes in Delta (( and )South West ((. But in response to a question from a Berkshire shareholder, Buffett said the company has sold all of its shares in Delta and Southwest, as well as )United (( and )American ((because he thinks it will take years for air travel to recover. )
Buffett, who has long been optimistic about the US economy and the stock market, spoke at the company’s annual shareholders meeting from a virtually empty CHI health center in Omaha on Saturday. The remarks were posted on the web by Yahoo Finance.
The Oracle of Omaha recognized that the coronavirus epidemic is a very different challenge from that of other national emergencies. But Buffett remains optimistic.
“This country, in 231 years, has exceeded anyone’s dreams. Said Buffett.
Buffett, who supported Hillary Clinton in the 2016 presidential election, also said he would not be talking about politics at the meeting.
But he congratulated Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, for his management of the Covid-19 epidemic.
Bullish but cautious
Buffett has not shared any thoughts on when he thinks the United States will recover from the worst of the pandemic. But he is convinced that better times lie ahead and urged investors to be cautious.
“You can bet on America but you will have to be careful how you bet,” he said. “Markets can do it all. “
He also stressed that investors should stay in stocks for a long time as they will continue to be better bets than bonds.
“America’s tailwind is not exhausted,” said Buffett.
Buffett also paid tribute to Federal Reserve Chairman Jerome Powell for actions taken by the central bank since March – cutting rates to zero and launching several lending programs for consumers, businesses and municipalities – to help support the economy.
Buffett admitted that these measures could eventually lead to problems down the road due to the swelling size of the Fed’s balance sheet. But the Fed had no other choice, he said.
“We know the consequences of doing nothing,” said Buffett, adding that Powell’s actions are the equivalent of “all you need, squared.”
This is a reference to a 2012 quote from the former head of the European Central Bank, Mario Draghi, on the measures taken by the ECB to do everything it could to support the euro area during the crisis of sovereign debt this year.
An empty arena
Tens of thousands of people usually descend on the city of Nebraska for the Berkshire shareholders meeting to listen to Buffett and Vice President Charlie Munger discuss the market and the economy.
But Munger, 96, was not at the meeting on Saturday. Buffett was joined on stage by another Berkshire vice president, Greg Abel.
Buffett said Saturday that Munger was in good shape and joked that he even used Zoom ((. He promised that Munger would be back at the next meeting in 2021. )
Abel, who heads Berkshire’s non-energy operations, is one of two executives believed to be likely successors to Buffett, who turns 90 in August, as CEO. The other is Ajit Jain, the vice president who manages insurance operations.
Berkshire Hathaway’s first quarter losses were mainly due to the significant drop in the value of Berkshire’s large investments, such as Kraft Heinz ((, )Bank of America ((, )Apple (( and )Coca Cola ((said the company. )
But many of its consumer businesses, which include Dairy Queen, Fruit of the Loom, Duracell and Benjamin Moore, have been hit hard by the Covid-19 epidemic.
Buffett has also spoken frequently in recent years about his desire to make another big acquisition, and he certainly has the money to do it. At the end of the first quarter, Berkshire Hathaway had $ 137.3 billion in cash on its balance sheet. Its latest major purchase was the 2015 agreement for aerospace equipment company Precision Castparts.
Buffett was concerned that the prices were too high for many buyout goals.
Berkshire denied a chance to buy jeweler Tiffany earlier this year. LVMH (( ended up buying it instead. Berkshire also lost a bidding war for software and hardware distributor Tech Data to a private equity firm )Apollo Global Management ((. )