Buffett, who flew 60 trillion crowns, said: “I am also a carrier. “Debt” is absolutely prohibited. “

Warren Buffett, called “Sage of Omaha”, could not avoid the shock of the new coronavirus infection (Corona19) despite maintaining a large investment despite the many economic crises. As the valuation value of the stock plummeted, Berkshire Hathaway, operated by Buffett, lost nearly $ 50 billion (approximately 60 trillion won) in the first quarter of this year.

“Corona 19 has changed our judgment significantly,” Buffett said. “We have eliminated all the actions of our airlines in the long term.” Rather, it maintained the position that there was no “attractive property” by increasing the amount of cash in the midst of the crisis.

◇ “Will not travel as before for 3-4 years”

According to the quarterly results released by Berkshire Hathaway the second (local time), Berkshire had a net loss of $ 49.7 billion (approximately 60.58 trillion won) in the first quarter. The main cause is the loss of valuation of total assets held at $ 55.4 billion due to the impact of Corona19.

Operating profit, which Buffett himself claims is a more appropriate valuation measure, increased by $ 58.7 billion thanks to insurance revenues, but Buffett, the “investment humorous”, also lost huge assets due to the decline. throughout March.

In particular, Buffett eventually stopped selling even the airline that he said would never sell it until mid-March. At Berkshire’s shareholders meeting earlier today, Buffett said directly: “Berkshire has removed all four stakes of American airlines, including Delta, United, American and Southwest, which have a stake of about 10%.”

Delta and Southwest Airlines, which accounted for more than 10% of the holdings between the four companies, were known to have already sold some of the shares, although some shares were known to have already been sold to the Securities and Exchange Commission (SEC) due to to the notification of changes in the shareholders. In fact, it was Buffett’s first public release that day.

Buffett admitted that “he was wrong (investing in the aerospace sector),” but explained that the sale of the stake was a decision not due to a recent temporary loss, but because the industry outlook changed significantly in the long term. “From an airline perspective, the world has changed significantly. I hope the industry finds a reasonable (restructuring) plan. ” “Over the next three to four years, as many people as last year, many travelers are unlikely to fly. “There are too many planes.”

◇ “Permanent loss in some companies with a crown”

In addition to the airline industry, Buffett diagnosed that some companies suffered permanent losses due to Corona19, and presented Berkshire’s own chocolate and candy production company ‘Sea Candy’ as a representative case. Buffett explained the difficulties facing the retail industry and said: “The Easter period is Seeds Candy’s” Candy Tree “.

Seas Candy is one of Buffett’s favorite success stories since his acquisition in 1972. He was a “cash cow” that always makes steady money in Berkshire, but is currently on hold due to massive movement (blocking) restrictions.

◇ “Do not” borrow “in the crown crisis”

Buffett is also famous for his investment principle of “buy when others are afraid and sell when he is greedy.” It means buying dividends or earnings after acquiring high-value companies or buying shares in a bear market.

However, in the first quarter of this year, when the stock fell due to Corona 19, it was only buying shares worth $ 1.8 billion. At the end of the first quarter, Berkshire’s cash was $ 1.337 billion (about 167 trillion won), an increase of $ 10 billion from the previous quarter.

“There were no attractions for sale,” said Buffett. “At the time of the fall, we reviewed some corporate investments (in crisis), but the Federal Reserve (Federal Reserve System) quickly intervened and the companies quickly filled the necessary funds.” He also praised the market policy of Fed President Jerome Powell.

“I’m not saying don’t invest now,” said Buffett. “The United States economy will eventually grow.”

However, he said, “There is great uncertainty because of the infection.” Investing in the United States economy, but be careful when investing in individual companies, especially in the current situation, should not be done with borrowed money.

In particular, the general investor said: “It would be better to have a Standard & Poor’s (S & P) 500 index fund.” This means having an ETF that is uniformly invested throughout the stock market rather than a risky all-in-one company. Buffett has not invested in ETFs in the past, but he has encouraged regular investors to invest in ETFs for a long time.

The Berkshire Hathaway shareholders’ meeting, which is rarely engaged in outside activities, rarely responds at headquarters, has attracted the attention of investors around the world. It’s called ‘Investor’s Woodstock’ at the Woodstock Festival international music festival. However, this year the offline event was canceled due to the influence of Corona 19 and instead was streamed live through the website, Yahoo Finance.

Reporter Inhyeon Hyun [email protected]