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Berkshire Hathaway, a subsidiary of Warren Buffett, announced its first quarter financial results on 2. Affected by the new crown epidemic, the quarter’s net loss was 49.75 billion yuan, but operating profit increased 6% annually, which was better than market expectations. Additionally, the cash level rose to a record level, proving that Buffett did not buy stocks on the downside.
According to the Berkshire financial report, the first quarter net profit loss was 49.75 billion yuan, and the loss per share was $ 30.653, which was a significant decrease from the same period last year. The main reason was the stock disaster at the end of March, which resulted in unrealized investment losses of up to $ 54.52 million. Large-scale holdings in the portfolio have dwindled, such as American Express, Bank of America, Wells Fargo and Delta, Southwest and four other US airlines.
However, Berkshire’s first quarter operating profit increased 6% yoy to $ 5.87 billion, better than market expectations. Because the new accounting standards require companies to include unrealized investment gains and losses in their calculations, because Buffett believes that operating profits may more closely reflect the company’s operating performance.
It’s worth noting that Berkshire’s cash and cash equivalents reached $ 137.2 billion at the end of the first quarter, not only setting a new high, but even more than $ 10 billion more than at the end of last year, which shows that the “god of stocks” did not drop in the first quarter. Buy shares. The financial report noted that Buffett only bought $ 3.5 billion in shares last quarter, including another $ 1.8 billion in stock, and bought $ 1.7 billion in Berkshire stock.
Buffett held a shareholders meeting the same day. Affected by the new crown epidemic, it was changed to take place online. 60-year-old partner Munger did not attend. In general, there are four main points:
1. Will not shorten the United States, firmly believe that nothing can hinder the growth of the United States
Buffett noted that although the epidemic has a very broad impact on the economy and has caused great anxiety for people, he firmly believes that the United States economy will not stop moving forward. “We have survived the Cuban missile crisis, the September 11 terrorist attacks and the financial tsunami. Nothing can hinder the United States. Even under extremely severe circumstances, the United States will eventually win.”
Buffett also said that while he doesn’t know how the market will fare tomorrow, next week, or next year, anything can happen, but if he bets on shortening the United States, he must be very careful.
2. Acknowledge the wrong love, erase all aviation stocks
Buffett said all four major airlines – American Airlines, Delta Air Lines, Southwest Airlines and United Airlines – were affected by the epidemic and suffered huge losses. The initial investment of $ 7 billion to $ 8 billion was a mistake. “I don’t know if the number of passengers on the plane will be the same as before after two or three years. The future situation is still vague.”
Third, the cash level hit a new high, frankly I didn’t see the attractive target
Berkshire’s first-quarter cash level hit a new high, indicating that Buffett did not buy shares on declines. He also said bluntly at the shareholders’ meeting: “Because there is still nothing attractive.”
Buffett said the epidemic caused a lot of uncertainty, in order to respond to a number of problems that may occur, to prepare for a long-term anti-epidemic, he believes that now is a good time to buy stocks, just to be prepared. .
4. Don’t borrow money to speculate – it’s good to have an ETF that tracks the S&P 500
Now is a good time for Americans to borrow money, but given the uncertainty of the new crown epidemic, don’t borrow money to participate in the stock market. If you are optimistic about the United States, buying an ETF that tracks the S&P 500 index can be much better than following the investment advice of others or buying a Treasury bill.
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