Buffett: "COVID-19 Won't Stop the US, but No Attractive Stocks"

'The Sage of Omaha' Holds Berkshire Hathaway Annual Meeting Online This Year
US Economy Expected to Overcome COVID-19 but No New Investments Made
All Airline Stocks Sold
Cash Reserves Built Up with Plans to "Buy Big When Investment Opportunities Are Found"

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] "Nothing can stop the US economy"

This is the diagnosis of the "Oracle of Omaha" regarding the US economy, which has plummeted due to the novel coronavirus infection (COVID-19). Billionaire investor Warren Buffett, chairman of Berkshire Hathaway, met with shareholders on the 2nd (local time) via a Yahoo Finance broadcast instead of the annual gymnasium shareholders' meeting podium.

COVID-19 has even changed the atmosphere of Berkshire's annual shareholders' meeting, once called the "Woodstock of Capitalism." Shareholders who used to flock to Omaha every year to hear investment advice from Buffett and his colleague Charles Munger, vice chairman of Berkshire, listened attentively to Buffett's remarks on screen. This year, Buffett's close partner Charles Munger did not attend, making the meeting look even more different from previous years.

Although the appearance of the shareholders' meeting changed, investors paid more attention than ever to Buffett's remarks. Just before the meeting, Berkshire announced a net loss of $49.7 billion (about 60.5843 trillion KRW) in the first quarter, but more attention was focused on Buffett's assessment of COVID-19 and his future investment direction.

◆ US economy will eventually recover, timing is 'uncertain' ? According to Yahoo Finance and CNBC broadcasts, Buffett predicted a recovery of the US economy but was cautious about the timing. While US President Donald Trump and Federal Reserve Chairman Jerome Powell claim a V-shaped recovery, some experts expect L-shaped or W-shaped recoveries, and Buffett did not endorse either side.

Buffett evaluated the potential impact of COVID-19 as very broad. However, he emphasized, "Basically, I am confident that nothing can stop America," adding, "America's miracle, America's magic has always prevailed, and it will do so again."

He said, "I was confident of this during World War II, the Cuban Missile Crisis, the 9/11 attacks in 2001, and the global financial crisis."

However, he added, "You can bet on America, but you need to be careful about how you bet," and "The market can do anything."

Buffett also revealed Berkshire's investment situation. The key was airline stocks. He said he sold all the airline stocks he held. This means that Delta, United, American Airlines, and Southwest Airlines have disappeared from his investment list. Although he said he would invest long-term in airlines immediately after the COVID-19 outbreak, he reversed that and sold all airline stocks.

According to CNBC, he explained, "There are industries affected by (COVID-19). Unfortunately, it is the airline industry. It suffered damage from shutdowns beyond control," and added, "We usually sell all when we sell."

◆ Accumulating cash and seeking investment opportunities ? Despite the US stock market's strong rebound in April after a sharp drop in March, Buffett said he did not buy stocks. He said, "There was nothing attractive, so I did not invest." As of the end of March, Berkshire's cash holdings reached a record high of $137 billion, meaning he did not see the stock price correction period as an investment opportunity.

However, Buffett said, "I am willing to invest significantly. Even this coming Monday, an investment of $30 billion or $40 billion could be announced," suggesting that he intends to make large-scale investments if he finds good investment opportunities.

Buffett made significant profits investing in bank stocks during the 2008 global financial crisis. At that time, his investment targets were Goldman Sachs and Bank of America (BOA), with investments of $5 billion each.

This content was produced with the assistance of AI translation services.