Buffett sells all aviation shares “The world will change”


Berkshire Hathaway, headed by well-known investor Warren Buffett, held an annual shareholders meeting on the 2nd.

Buffett said he had sold all of his US aviation stock, saying that the world would change with the spread of the new coronavirus.

The “god of investment” who has survived numerous crises, while believing in the bright future of the United States, is beginning to move toward the post-Corona world.

“COVID-19 can’t stop US growth”

Berkshire is headquartered in Omaha, Nebraska, in the Midwest.

At the annual shareholders meeting, Mr. Buffett had the opportunity to ask questions directly, and 40,000 shareholders gathered not only from the United States but from all over the world every year.

In 2020, after making the venue “no audience”, Chairman Buffett and Vice Chairman Greg Abel attended.

The impact of corona was significant in Berkshire’s January-March 2010 financial results announced on the day.

The valuation loss of listed stocks (total of $ 180.7 billion) such as Apple expanded, and the final loss was 49.7 billion dollars (about 5 trillion yen), the largest loss ever.

Buffett still did not turn bullish to US stocks.

He introduced the history of overcoming many difficulties such as the September 11 terrorist attacks in the United States and the financial crisis in 2008 as a “miracle of the United States” and said that the United States will continue to grow in the medium to long term.

As for US stock investment, he said, “Never bet against growth in the United States.”

Sold all airline stock “passengers never returned”

While believing in the bright future of the US economy, Buffett also showed the face of a cold investor.

At the shareholders’ meeting, it announced that it has sold all the shares of four major US airlines, including Delta.

As airline stocks were known as Mr. Buffett’s “favorite stocks,” surprises spread, and questions from shareholders were concentrated.

He sold four companies: Delta, American Airlines, United Airlines, and Southwest Airlines.

Buffett admitted he was “wrong” about buying more Delta shares in February.

“I don’t know how outing restrictions affect people’s behavior. I can’t see if I’ll be flying in the same way as last year, three to four years later,” he said.

Accumulated cash “No attractive investment destination”

There is no way to figure out how to use the cash on hand, which was an issue.

Total cash and equivalents at the end of March 2020 reached a record high of $ 137 billion.

Buffett has always been looking for large-scale M & A, although, he lamented that he has no attractive investment destination.

Mr. Buffett has been cautious about large-scale acquisitions until now because the price of acquisitions has soared due to the offensive of investment funds.

Stock prices plunged due to the spread of the new Corona infection, but Buffett did not move.

Candidate for successor, negative for future “Berkshire dismantling”

Berkshire has a strong image of an investment company, but it has multiple operating companies such as energy, railways, and insurance under its umbrella.

Even if Mr. Buffett retires, can anyone still run a huge conglomerate with annual sales of $ 250 billion?

Berkshire dismantling is always a topic.

“Berkshire’s unique business structure creates value,” Abel said, disabling the demolition.

“Hold shares permanently” “Do not restructure after acquisition”

This unique management philosophy has enhanced Berkshire’s brand power.

However, during the corona crisis, the stock holdings were reviewed, and the affiliated companies also carried out restructuring.

Abel said that “Berkshire’s culture will not change in the future,” in a question-and-answer session at the General Assembly and tried to reassure long-time fan shareholders, but Berkshire also faces unexpected events and is required to change.