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Berkshire Hathaway apparently unloaded their entire airline portfolio
Posted on 5/2/20 at 6:14 pm
Posted on 5/2/20 at 6:14 pm
LINK
quote:
Berkshire Hathaway Chairman and billionaire value investor Warren Buffett said that the conglomerate has sold the entirety of its equity position in the U.S. airline industry. The prior stake, worth a collective several billion dollars, included United, American, Southwest and Delta Airlines.
"The world has changed for the airlines. And I don't know how it's changed and I hope it corrects itself in a reasonably prompt way," he said. "I don't know if Americans have now changed their habits or will change their habits because of the extended period."
But "I think there are certain industries, and unfortunately, I think that the airline industry, among others, that are really hurt by a forced shutdown by events that are far beyond our control," he added.
Asked by CNBC's Becky Quick to clarify if Berkshire had sold all of its airline holdings, Buffett answered "yes."
He explained: "When we sell something, very often it's going to be our entire stake: We don't trim positions. That's just not the way we approach it any more than if we buy 100% of a business. We're going to sell it down to 90% or 80%."
11
Posted on 5/2/20 at 6:18 pm to The Egg
Also, excerpts from the Berkshire shareholders meeting, held virtually
LINK
LINK
quote:
4:00 pm: Buffett hunkering down?
Going by the company's first-quarter 10-Q filing, it appears Buffett was not chomping at the bit to buy more stock or companies outright during the coronavirus market rout. The filing revealed Berkshire had a record $137 billion in cash and equivalent instruments on its balance sheet at the end of the first quarter, up from about $127 billion at the end of the year.
quote:
4:28 pm: Berkshire reports net loss of $50 billion
Berkshire Hathaway reported a net loss of nearly $50 billion for the first quarter earlier Saturday as the conglomerate's stock investments took a massive hit amid the coronavirus outbreak.
quote:
5:10 pm: Buffett: Economy faces 'extraordinary' range of outcomes, but nothing can stop America
Buffett struck a cautious tone when discussing the U.S. economy at the start of the meeting, warning that the possibilities "are still extraordinarily wide" given the coronavirus crisis. But he then went on to reiterate his longtime belief that America will overcome even the most daunting challenges, including the current global pandemic.
This post was edited on 5/2/20 at 6:22 pm
Posted on 5/2/20 at 6:20 pm to The Egg
That April “recovery” exuberance was clear and total bullshite. Buffett knows we’re in for pain.
Posted on 5/2/20 at 6:24 pm to The Egg
In the short term profits may not be good, but I don’t know a whole lot of alternatives exist if you want to go from San Francisco to New York.
Posted on 5/2/20 at 6:40 pm to The Egg
ouch! cant be good short term for airline stocks. still looking to pick up some southwest stock over the next few weeks though
This post was edited on 5/2/20 at 6:46 pm
Posted on 5/2/20 at 6:41 pm to TJG210
Exactly. People are still going to need to fly when this is all said and done.
Posted on 5/2/20 at 6:44 pm to Ingloriousbastard
WB himself said the stock market transfers wealth from the impatient to the patient.
Demand for air travel isn't going anywhere.
Demand for air travel isn't going anywhere.
Posted on 5/2/20 at 6:45 pm to southernelite
He and ole Charlie probably won't be around anyways to witness the complete carnage this decade will bring.
Posted on 5/2/20 at 6:54 pm to Bestbank Tiger
Until they go bankrupt in October.
Posted on 5/2/20 at 6:56 pm to Drew Orleans
All of the airlines are going to go bankrupt in October?
Posted on 5/2/20 at 7:04 pm to Drew Orleans
quote:
Until they go bankrupt in October.
Some of them, yes. However the Feds have made it clear they will not let the industry collapse.
Per the usual, there will be long term winners and long term losers ... the disparity just may be a bit more extreme between the have and have nots.
I’m confident there’s strong profit to be made on the airlines in the long term if you have the fortitude to go long at the lows.
Posted on 5/2/20 at 7:17 pm to Ingloriousbastard
quote:
Exactly. People are still going to need to fly when this is all said and done.
I think you’ll see some companies will reconsider their demand for having their employees fly often. People will cancel delay vacations.
We could still see a 10-15% decline or more in air traffic for the next 12-18 months. That’s going to be a significant hit to airlines.
This post was edited on 5/2/20 at 7:20 pm
Posted on 5/2/20 at 7:36 pm to southernelite
quote:
think you’ll see some companies will reconsider their demand for having their employees fly often
I think this is spot on. Business travel will not recover to what it once was. Zoom is free and millions of americans were just forced to learn and accept instant video conferencing. It is now ubiquitous where it wasnt pre virus. That means less cheeks in airline seats over the long term. Buffet is spot on. Which airlines go banrkrupt? Consolidate? Etc. this is a long term structural shift in that industry. Buyer beware.
Posted on 5/2/20 at 7:41 pm to rotrain
quote:
Business travel will not recover to what it once was. Zoom is free and millions of americans were just forced to learn and accept instant video conferencing
You don’t seriously believe that do you?
Posted on 5/2/20 at 7:48 pm to TJG210
Do i believe that many businesses wont spend as much on air travel as they used to due to far greater use of video conferencing? Yes, i do. Si does buffett. Is that so far fetched? Im sort of surprised by your incredulity in the question.
Posted on 5/2/20 at 7:52 pm to TJG210
I’ve heard some businesses that are on year-long reintegration plans. I don’t think business travel will be completely scrapped, but enough will cut back it will affect the airline industry. No one is saying no companies are flying people around, but that doesn’t mean there won’t be long-term ramifications.
Posted on 5/2/20 at 7:59 pm to southernelite
So. Airline A begins to talk about bankruptcy proceedings. Feds say whoa whoa whoa you don't need to do that...here's 5 trillion
What does that do to the stocks? Fake propped up price?
What does that do to the stocks? Fake propped up price?
Posted on 5/2/20 at 8:04 pm to Drew Orleans
quote:
Until they go bankrupt in October.
UAL and AAL are high risk for that because they're overleveraged. DAL and LUV don't have excessive debt so they can survive.
Posted on 5/2/20 at 9:00 pm to rotrain
Buffet is going senile....
Are salesman going to use zoom to meet with decision makers? Maybe some will, but find it unlikely, especially ones that deal in highly technical fields.
Are salesman going to use zoom to meet with decision makers? Maybe some will, but find it unlikely, especially ones that deal in highly technical fields.
Posted on 5/2/20 at 9:09 pm to TJG210
quote:
especially ones that deal in highly technical fields.
Im speaking of the decrease across the totality of “ business travelers” not just salespeople in highly technical fields. If 1 in 10 trips are Now viewed as a nice to have want that can be done over video instead of a business need that must be done in person, that would materially change the industry imo. Between flights and hotels and rental cars and per diem, its quite literally $1,000 At least to meet someone face to face instead of free Over video. Video can also be set up within the hour so decisions can be made sooner, flights take more time to plan and travel.
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