Warren Buffett’s company Berkshire Hathaway is not betting on airline stocks
May 3, 2020
Airline stocks have taken a beat during the coronavirus crisis, Warren Buffett says it was a big mistake buying them
During a virtual address to shareholders for the company’s annual shareholders meeting Saturday, the chairman and CEO called Berkshire’s recent purchase of roughly 10% of four of the world’s largest airlines — including American (AAL), United (UAL), Delta (DAL) and Southwest (LUV) — an “understandable mistake.
“But the companies we bought were well managed. They did a lot of things right. It’s a very, very, very difficult business because you’re dealing with millions of people every day and if something goes wrong for 1% of them, they are very unhappy,” Buffett added.
Reasons to buy or sell stocks
“The world has changed,” said Warren Buffett. One of the main catalysts to buy stocks or sell stocks is the fundamental outlook and prospects of the business sector. Warren Buffett thinks that in the following years the business outlook for airline stocks will not be too optimistic. Correct or not, it is a very compelling argument to sell for now the airline stocks, even if they may have shown temporarily a bottom. There are too many stocks to analyze in the US stock market, and now airline stocks seem too risky. Investing in stocks and investing, in general, is about analyzing risks.