May 4, 2020
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“You can bet on America, but you kind of have to be careful about how you bet,” Warren Buffett said at Berkshire Hathaway’s annual meeting. Johannes Eisele/Agence France-Presse — Getty Images
Warren Buffett is more worried than usual
The “Oracle of Omaha” initially exhibited his usual optimism on Saturday during Berkshire Hathaway’s annual meeting, held online for the first time. But, Andrew writes in his latest column, Mr. Buffett appears fairly gloomy if you dig deeper:
It was unsettling on Saturday to hear him repeatedly say “I don’t know.” He was careful to say the markets would improve in the long term — though his time frame for certainty was decades, not months or not even necessarily years from now. About the current climate, he said, “You can bet on America, but you kind of have to be careful about how you bet.”
The clearest sign of hesitation was his closed wallet, Andrew notes. Mr. Buffett didn’t buy up stocks during the recent market plunge, unlike his spending spree amid the carnage of the 2008 financial crisis. Back then, he wrote an op-ed in The New York Times a month after Lehman Brothers filed for bankruptcy: “In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary. So … I’ve been buying American stocks.”
• Mr. Buffett missed his chance to strike the type of high-priced rescue deals like the one he offered to G.E. in 2008, Bloomberg notes, because the Fed quickly stepped in with a slew of bailout programs. Berkshire is now sitting on $137 billion in cash.
Mr. Buffett sold his holdings in the four biggest U.S. airlines, saying that the airline business “changed in a very major way.”
• All told, Berkshire sold $6.5 billion worth of stocks last month, putting most of the money into Treasury bills.
The meeting came after Berkshire reported a $50 billion loss in the first quarter. Mr. Buffett has long argued that swings in value of Berkshire’s investments aren’t a good indicator of the company’s health, but the conglomerate also recorded hits to wholly owned operations like its Burlington Northern railroad and retail businesses.
Mr. Buffett left investors with a sliver of hope: “The American miracle, the American magic has always prevailed and it will do so again,” he said.
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Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut and Michael J. de la Merced and Jason Karaian in London.
Good morning. (Was this email forwarded to you? Sign up here.)
“You can bet on America, but you kind of have to be careful about how you bet,” Warren Buffett said at Berkshire Hathaway’s annual meeting. Johannes Eisele/Agence France-Presse — Getty Images
Warren Buffett is more worried than usual
The “Oracle of Omaha” initially exhibited his usual optimism on Saturday during Berkshire Hathaway’s annual meeting, held online for the first time. But, Andrew writes in his latest column, Mr. Buffett appears fairly gloomy if you dig deeper:
It was unsettling on Saturday to hear him repeatedly say “I don’t know.” He was careful to say the markets would improve in the long term — though his time frame for certainty was decades, not months or not even necessarily years from now. About the current climate, he said, “You can bet on America, but you kind of have to be careful about how you bet.”
The clearest sign of hesitation was his closed wallet, Andrew notes. Mr. Buffett didn’t buy up stocks during the recent market plunge, unlike his spending spree amid the carnage of the 2008 financial crisis. Back then, he wrote an op-ed in The New York Times a month after Lehman Brothers filed for bankruptcy: “In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary. So … I’ve been buying American stocks.”
• Mr. Buffett missed his chance to strike the type of high-priced rescue deals like the one he offered to G.E. in 2008, Bloomberg notes, because the Fed quickly stepped in with a slew of bailout programs. Berkshire is now sitting on $137 billion in cash.
Mr. Buffett sold his holdings in the four biggest U.S. airlines, saying that the airline business “changed in a very major way.”
• All told, Berkshire sold $6.5 billion worth of stocks last month, putting most of the money into Treasury bills.
The meeting came after Berkshire reported a $50 billion loss in the first quarter. Mr. Buffett has long argued that swings in value of Berkshire’s investments aren’t a good indicator of the company’s health, but the conglomerate also recorded hits to wholly owned operations like its Burlington Northern railroad and retail businesses.
Mr. Buffett left investors with a sliver of hope: “The American miracle, the American magic has always prevailed and it will do so again,” he said.
____________________________
Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut and Michael J. de la Merced and Jason Karaian in London.
