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WASHINGTON: Billionaire investor Warren Buffet said Saturday that he is confident the US economy will recover from its beating from the coronavirus pandemic because “American magic has always prevailed.”
The 89-year-old man made the optimistic prediction about the world’s largest economy, as his holding company Berkshire Hathaway reported first-quarter net losses of nearly $ 50 billion.
Buffett also announced Saturday that his company had sold all of its stakes in four major US airlines last month, as the pandemic hit the travel industry.
“It turns out I was wrong,” he said of his acquisitions of 10 percent stakes in American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.
Berkshire Hathaway had paid between $ 7 billion and $ 8 billion, and “we didn’t get anything out of it,” he said.
Between the purchases that took place for months and the sale, “I think the airline business changed in a very important way” and could no longer meet the Berkshire criteria for profitability, he said.
Buffett’s announcement may further harm airlines that have already been pushed to the brink by coronavirus-blocking measures, which are now seeking the United States government for $ 25 billion in aid funds.
Berkshire Hathaway, based in Omaha, Nebraska, called its first-quarter mishap “temporary,” but said it couldn’t reliably predict when its many businesses would return to normal or when consumers would resume their old shopping habits.
“We have faced big problems in the past, we have not faced this exact problem; in fact, we have not faced anything that closely resembles this problem,” Buffett said in a long speech about the country’s economic history.
“But we face more difficult problems, and American miracles, American magic has always prevailed and will do so again.”
“Now we are a better country, as well as an incredibly richer country, than in 1789 … We have a long way to go, but we are moving in the right direction,” he said, referring to the abolition of slavery and suffrage for the women.
“Never bet against the United States.”
Buffett is considered one of the smartest investors in the world. Its $ 72 billion fortune is the fourth largest in the world, according to Forbes, and in normal years, the company’s annual meeting in Omaha is a calendar highlight for investors, a “Woodstock for capitalists.”
But the devastating economic impact of the pandemic has strongly affected Berkshire Hathaway’s wide range of investments, and the need for social distancing forced him to hold the annual meeting online.
Buffett addressed his shareholders in a live broadcast flanked only by Gregory Abel, who is in charge of Berkshire’s non-insurance operations.
His business partner for six decades, Charlie Munger, 96, did not appear.
Buffett, in a statement, played down the gloomy net number of his company. He said a better measure of the company’s performance was its operating profit, which excludes investments and is less subject to sharp fluctuations.
By that measure, Berkshire Hathaway saw growth to $ 5.9 billion from $ 5.55 billion a year earlier.
The brutal drop in the network, to a loss of $ 49.75 billion from a profit last year of $ 21.7 billion, was primarily due to the virus-related decline in the value of its broad investment portfolio, spanning from energy to transport, insurance and technology. .
The annual gathering often has a quasi-carnival atmosphere as thousands of fans and investors flock to Nebraska to hear the famous “Omaha Oracle.” Buffett, famous for his relatively modest lifestyle, turns 90 on August 30.
In documents filed Saturday, Berkshire noted that as of mid-March, many of its companies posted “comparative revenue and profit increases” during the same period in 2019.
Many of its companies, including rail transportation, power generation, and some manufacturing and service companies, are considered essential and can continue to work amid far-reaching containment orders.
But its turnover decreased considerably in April, according to the company statement.
The moves taken by those companies, such as employee leave, wage cuts and cuts, and capital spending reductions are “necessary” and “temporary” actions, he said.
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The 89-year-old man made the optimistic prediction about the world’s largest economy, as his holding company Berkshire Hathaway reported first-quarter net losses of nearly $ 50 billion.
Buffett also announced Saturday that his company had sold all of its stakes in four major US airlines last month, as the pandemic hit the travel industry.
“It turns out I was wrong,” he said of his acquisitions of 10 percent stakes in American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.
Berkshire Hathaway had paid between $ 7 billion and $ 8 billion, and “we didn’t get anything out of it,” he said.
Between the purchases that took place for months and the sale, “I think the airline business changed in a very important way” and could no longer meet the Berkshire criteria for profitability, he said.
Buffett’s announcement may further harm airlines that have already been pushed to the brink by coronavirus-blocking measures, which are now seeking the United States government for $ 25 billion in aid funds.
Berkshire Hathaway, based in Omaha, Nebraska, called its first-quarter mishap “temporary,” but said it couldn’t reliably predict when its many businesses would return to normal or when consumers would resume their old shopping habits.
“We have faced big problems in the past, we have not faced this exact problem; in fact, we have not faced anything that closely resembles this problem,” Buffett said in a long speech about the country’s economic history.
“But we face more difficult problems, and American miracles, American magic has always prevailed and will do so again.”
“Now we are a better country, as well as an incredibly richer country, than in 1789 … We have a long way to go, but we are moving in the right direction,” he said, referring to the abolition of slavery and suffrage for the women.
“Never bet against the United States.”
Buffett is considered one of the smartest investors in the world. Its $ 72 billion fortune is the fourth largest in the world, according to Forbes, and in normal years, the company’s annual meeting in Omaha is a calendar highlight for investors, a “Woodstock for capitalists.”
But the devastating economic impact of the pandemic has strongly affected Berkshire Hathaway’s wide range of investments, and the need for social distancing forced him to hold the annual meeting online.
Buffett addressed his shareholders in a live broadcast flanked only by Gregory Abel, who is in charge of Berkshire’s non-insurance operations.
His business partner for six decades, Charlie Munger, 96, did not appear.
Buffett, in a statement, played down the gloomy net number of his company. He said a better measure of the company’s performance was its operating profit, which excludes investments and is less subject to sharp fluctuations.
By that measure, Berkshire Hathaway saw growth to $ 5.9 billion from $ 5.55 billion a year earlier.
The brutal drop in the network, to a loss of $ 49.75 billion from a profit last year of $ 21.7 billion, was primarily due to the virus-related decline in the value of its broad investment portfolio, spanning from energy to transport, insurance and technology. .
The annual gathering often has a quasi-carnival atmosphere as thousands of fans and investors flock to Nebraska to hear the famous “Omaha Oracle.” Buffett, famous for his relatively modest lifestyle, turns 90 on August 30.
In documents filed Saturday, Berkshire noted that as of mid-March, many of its companies posted “comparative revenue and profit increases” during the same period in 2019.
Many of its companies, including rail transportation, power generation, and some manufacturing and service companies, are considered essential and can continue to work amid far-reaching containment orders.
But its turnover decreased considerably in April, according to the company statement.
The moves taken by those companies, such as employee leave, wage cuts and cuts, and capital spending reductions are “necessary” and “temporary” actions, he said.
