Warren Buffett holds Berkshire Hathaway AGM
Sitting on stage in an empty arena in Omaha, Nebraska, and in the absence of his usual pal, Charlie Munger, Warren Buffett began Berkshire Hathaway’s 2020 AGM under the slogan “Nothing Can Stop America.”.
«Woodstock for capitalists», which attracted tens of thousands of visitors over the years, was organized in such a way for almost the first time. This year is 89 years old «Oracle from Omaha» shared the scene with Greg Abel, vice chairman of insurance operations in a financial conglomerate and the main contender for the role of successor Warren Buffett.
The four-hour live presentation, Q&A session provided an insight into Buffett’s investment mindset in the coronavirus era. While Buffett still believes in «American miracle» deep down, the pandemic has indeed led to the legendary investor’s extravagant moves. Buffett also explained why he stays on the sidelines for now with a record $ 137 billion..
Minutes before his speech, Buffett inspired investors, many of whom were hit by the market sell-off, with confidence that the US economy would weather this global pandemic, just like in previous crises..
«Nothing can stop America, Buffett said. – American miracle, American magic has always prevailed, and so it will be this time. … During the Second World War, I became convinced of this, – he added. – I was convinced of this during the Cuban Missile Crisis, 9/11, the global financial crisis».
The outbreak of the pandemic, which has infected more than 1 million people in the United States, has led to nationwide economic shutdowns, resulting in unprecedented job losses. The US economy experienced its biggest contraction since the financial crisis in the first quarter.
Berkshire reported significant losses of $ 50 billion in the first quarter, a record for the Buffett conglomerate and mainly due to losses in the stock market..
Buffett believes one area of the economy – the airline business – could be dramatically changed by the economic impact.
The investor showed in value terms that the conglomerate had sold its equity stake in the US aviation industry. Previous $ 4 billion stake in December included positions in United, American, Southwest and Delta Airlines.
«The world has changed for airlines. And I don’t know how it changed, and I hope that it will be fixed quickly enough, ”he said. – I don’t know if the Americans have kept their habits or if everything will change due to a long period».
Demand for air travel has plummeted since March as precautions keep potential passengers at home. The airline shares that Buffett dropped have dropped 70% this year as of Friday. This was a rare move for an investor who prefers to buy and hold.
The billionaire also commented «elephant-sized acquisition», which he still has to do.
Buffett hasn’t made any major investments for several years, with Berkshire Hathaway’s account holdings surging to a record $ 137 billion by the end of March. According to him, the reason is that he did not find anything «attractive».
«We didn’t do anything because we didn’t see anything attractive, ”Buffett said. “We’re not doing anything big, obviously. We are ready to do something very big. I mean, you could come to me Monday morning with something that would raise $ 30 billion or $ 40 billion or $ 50 billion. And if we really like what we see, we will.».
Buffett believes that average investors should buy a wide range of assets over an extended period of time instead of following stock picking advice..
«In my opinion, it is best for most people to own an S index fund&P 500, Buffett said. – People pay huge amounts of money for advice they really don’t need».
Warren Buffett and Charlie Munger chair the 2019 Berkshire Hathaway Shareholders Meeting (FULL)
«If you bet on America and keep that position for decades, it will be better than buying Treasuries, or much better than following the advice of people who tell you what to invest in.», – he added.
He added that people should not borrow money to participate in the market, especially now, given the uncertainty surrounding the pandemic..
«When something similar to the current pandemic occurs, it is difficult to account for. This is why you never want to use borrowed money, at least in my opinion for investments.», – said Buffett.
His deputy, 96 years old Charlie Munger did not attend the meeting, although Buffett said his longtime business partner is in good shape and will return for the annual meeting next year.
Buffett said Munger installed himself Zoom Video and had virtual meetings every day..
When asked about the future leadership that will allocate capital at Berkshire Hathaway, Buffett listed Greg Abel, and Todd Combs and Ted Weschler, his two key deputies for investments.
«Charlie and I are near. We love allocating capital ourselves. We will not go anywhere voluntarily, but perhaps soon we will involuntarily go to some places.», – said Buffett.
«Charlie is in good health. I am in good health», – he added.