I’d wager almost every value investor in the world has the month of May circled on their investing calendars.
Why? Because that’s the month that one of the greatest investors of all time – Warren Buffett – holds his ‘Woodstock for Capitalists’, otherwise known as the annual meeting for shareholders of his company Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B).
Traditionally, these meetings are held in Omaha, Nebraska and attract thousands of investors from all over the world. This year, due to the coronavirus, it was a virtual meeting instead – just a one-on-one with Buffett and one of his vice-chairmen.
The whole meeting ran for several hours, but here are 3 quick takeaways I gleaned from ‘Woodstock’.
Buffett isn’t buying
Warren Buffett revealed that Berkshire Hathaway hasn’t been loosening up the purse strings at all in 2020 – despite his famous love of a market crash. Whether this tells us that Buffett is simply waiting for a bigger crash down the road or is just being conservative with his pile of cash wasn’t clear. He did say, however, that he is waiting for a big deal to come along and he ‘doesn’t have as much cash as it looks’.
Airlines have landed for Buffett
Buffett also revealed that Berkshire Hathaway has exited its complete holdings of US airlines, citing too much uncertainty over their business models in the age of coronavirus, as well as the significant levels of capital they will require this year and beyond.
Years ago, Buffett had panned airline companies but appeared to have changed his mind on them in recent years, buying large chunks of 4 major American carriers. It seems as though he should have stuck to his ‘no airlines’ rule though, as Berkshire would have sold all 4 at substantial losses.
Buffett’s still betting on shares and America
Even though we are in unprecedented and scary times right now, Buffett took a lot of time walking us through how America (and the world) has been through crises before and come out the other side to scale new heights. He referenced the Spanish Flu, the two World Wars and the Great Depression as proof of humanity’s ingenuity and potential to overcome adversity. He also told investors that he is still ‘betting on America’, which he will continue to do for the rest of his (hopefully long) life.
Buffett also reminded us of the value of investing in shares over the long-term, highlighting their superior wealth-creating potential over a government bond or ounce of gold.
Warren Buffett is an invaluable source of investing wisdom and insight, and I would strongly encourage everyone who’s interested in investing to have a watch of his presentation. I think the lessons that Buffet has used and taught to become wealthy are still just as relevant today as ever.
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short June 2020 $205 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.