At the Annual General Meeting of Berkshire Hathaway Inc. announced it sold its entire stakes in the 4 largest US largest airlines, the size was 11% in Delta Air Lines, 10% of American Airlines, 10% of Southwest Airlines and 9% of United Airlines. This was big change in the Berkshire portfolio because for years, Warren Buffett said he did not understand airline investing. Then in 2016 he took the plunge.
In 2020, because of the virus passenger travel is down to 5% capacity and thousands of flights have been cancelled and planes parked and ready to go. The when is the issue.
According to an article by Jonathan Stempel of Reuters, Berkshire Hathaway is being hit hard by the virus posting a quarterly net loss of $50 billion. Berkshire owns 90 businesses, most of them are number one or two in their category. Some of the bigger names are BNSF railway – commodities are down such as coal while consumer products are up; Geico the auto insurance company – companies are giving rebates for consumers not driving. other large holdings are Apple, American Express, Bank of America, Wells Fargo, Precision Castparts and in Omaha – Nebraska Furniture Mart and See’s Candies. Usually those business do their busiest weekend in connection to the Berkshire Hathaway annual meeting.
Berkshire’s cash rose from $128 billion to $137.3 billion. Quarterly operating profit rose 6% to $5.87 billion or $3.624 a share.
Linking to dividend paying stocks, the wonderful thing about Berkshire Hathaway is the cash position which could buy up multiple companies, if Mr. Buffett and Mr. Charlie Munger see opportunity. In the meantime, the companies are progressing as much as they can, waiting for the openings we all hope for.
There are more questions than answers, till the next time – to raising questions.