Warren Buffett to Address Coronavirus and Stock Losses

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Follow the highlights of Berkshire HathawayThe annual meeting here. Warren Buffett is ready to comment on the coronavirus, the state of the American economy, and whether he sees any value in the sell-off. The 89-year-old “Oracle of Omaha” will join the virtual meeting with Vice President of Unsafe Operations Greg Abel. The couple will answer questions from CNBC shareholders Becky Quick. CNBC and The New York Times Andrew Ross Sorkin , along with financial journalist Carol Loomis, will also ask questions.

Buffett gave a cautious tone when discussing the US economy at the beginning of the meeting, warning that the possibilities “are still extraordinarily wide” given the coronavirus crisis. But then he reiterated his long-held belief that the United States will overcome even the most daunting challenges, including the current global pandemic.

“In 2008 and 2009 our economy train went off the tracks, and there were some reasons why the road was weak in terms of banks. This time we just pulled the train off the tracks and put it on a liner. I know of no parallels, in terms of a very, very well the most important country in the world, the most productive and enormous population, which in effect neglects its economy and its workforce. “

“But even in the face of that, I would like to talk to you about the economic future of the country. Because I am still convinced, as I have been, I was convinced of this in the Second World War, I was convinced of it during the Cuban Crisis missile, September 11, September, the financial crisis: that nothing can basically stop the United States. ” – Franck

Warren Buffett thanked White House health adviser Dr. Anthony Fauci for educating him and informing him and the country about coronavirus developments, saying he owes him a “huge debt of gratitude.” Buffett said the country is “very, very lucky” to have Fauci communicate in a “very direct way” about the global health crisis. Fauci is the director of the National Institute of Allergy and Infectious Diseases and the lead public health expert on President Donald Trump’s coronavirus task force. – Li

Buffett starts talking to Abel at another table next to him. Buffett has his beloved Coca-Cola by his side in a glass.

Joining Buffett on stage answering shareholder questions will be Greg Abel, Berkshire Vice President of Non-Insurance Operations. Abel, who joined the conglomerate in 1992, was promoted to his position in 2018. Prior to that, he served as President and CEO of Berkshire Hathaway Energy. Abel, now 57, is seen as one of the top contenders to succeed Buffett, who is 89 years old. At Berkshire’s annual meeting last year, Buffett hinted that Abel and Ajit Jain, who handles all insurance-related operations, could be possible successors. Both Abel and Ajit answered some questions from shareholders last year. –Li

Despite short-term fluctuations, Warren Buffett’s long-term record is the reason this meeting is such a great annual event for investors. Berkshire Hathaway A shares have returned nearly 21% annually since 1976, more than double the S&P 500’s 10% return over the same time, according to FactSet. Over the past year, Berkshire lost 15%, compared to the S&P 500’s 1% loss. Berkshire’s heavy investments in banking and insurance have hurt it during this dramatic economic slowdown. -Melloy

This year’s Berkshire Hathaway shareholder meeting, which will take place virtually for the first time, comes at a critical time for the conglomerate. Shareholders want more clarity on the company’s leadership, as Greg Abel shares the stage with Warren Buffett. They also want to get an idea of ​​Buffett’s plans regarding the company’s large amount of cash. Berkshire Hathaway has more than $ 137 billion in cash through the end of the first quarter and shareholders wonder if the “Oracle of Omaha” has found attractive investments since the coronavirus pandemic caused a massive sell-off in the global market. –Imbert

Berkshire Hathaway reported a net loss of nearly $ 50 billion during the first quarter of the previous Saturday as the conglomerate’s equity investments suffered a massive blow amid the coronavirus outbreak. But this quarterly result is misleading as Berkshire owns more equity investments than other fluctuating companies. Accounting rules require the company to report unrealized losses on shares, so this loss is a reflection of the crash of the coronavirus stock market. Berkshire’s operating profit actually increased to $ 5.9 billion from $ 5.6 billion in the same period a year ago. –Imbert

Based on the company’s presentation in the first quarter of 10-Q, it appears that Buffett was not trying to buy more stocks or companies directly during the crash of the coronavirus market. The presentation revealed that Berkshire had a record $ 137 billion in cash and cash equivalents on its balance sheet at the end of the first quarter, up from $ 127 billion at the end of the year. Additionally, the company spent just $ 1.8 billion buying shares and just $ 1.7 billion buying back Berkshire Hathaway shares. It will be interesting to see if Buffett is indeed expecting more clarity that the economy is not going through a more lasting pullback due to the pandemic. —Melloy

–With reports from John Melloy

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