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SAO PAULO – Billionaire Warren Buffett revealed that Berkshire Hathaway, his investment company, sold all the positions he had on major US airlines in April due to the coronavirus pandemic.
Buffett said he had concerns about whether people could fly again in the next two to three years after the pandemic.
“The world has changed for airlines. Some companies, and unfortunately this is the case in the aviation industry, will be really affected, ”said the investor at the annual meeting of the conglomerate in Omaha, United States.
In December, the company invested $ 4 billion in United, American, Delta, and Southwest. “I was wrong,” Buffett said of the bet on airlines.
The meeting comes hours after Berkshire posted a loss of $ 49.7 billion in the first quarter of the year, reflecting the devaluation of the company’s portfolio shares with the downturn in the markets in recent weeks.
The balance sheet also showed that the conglomerate has $ 137 billion in cash, a record for the company. A sign that the company didn’t buy anything during the stock market crash? The mega-investor simply said that he had not found a company to buy reasonably priced in the past few months.
“We didn’t do anything because we couldn’t find anything attractive to do,” Buffett said. “This may or may not change quickly.”
Due to the coronavirus, Berkshire Hathaway’s famous annual shareholder meeting, which generally brings together thousands of people each year at a gym in Nebraska, was broadcast on video conference. Buffett spoke in the same gym, but without an audience.
The meeting began with a message of optimism from the mega-investor, who reaffirmed his confidence in the recovery of the United States economy after the coronavirus pandemic.
“Never bet on the United States,” Buffett said, in a long presentation of moments when the American economy recovered from serious crises, citing the Civil War, the 1929 Crisis and World War II. “We have already faced worse problems and the ‘American miracle’ has always overcome them,” he said.
Regarding the post-pandemic future, the mega-investor said stocks are still the best investment, but cautioned against the market.
“No one knows what will happen on the market tomorrow, next week, next month, next year. You can bet in America, but you will have to be careful how you bet. Simply because anything can happen in the markets, “he said.
The best bet, according to Buffett, is to invest in the S&P 500, an index that brings together the top companies listed on the New York Stock Exchange. And, mainly, do not take the money at the first moment of volatility that appears.
“If you hold that position for decades, you will do much better than buying Treasury bills, or better than listening to what people say to you,” he said. “Stocks are good investments if they are treated as investments, not as chips to be exchanged all the time,” he said.
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