Main takeaways from Berkshire’s Annual Meeting 2020: Buffett sold Airline stakes, preparing for even bigger mess, and: „Never bet against America“

You can watch the annual meeting of Berkshire Hathaway on YouTube here. ©J

Like every year I’ve watched the annual shareholder meeting of Berkshire Hathaway. Here are the key points of the event with the legendary investor Warren Buffett. Here’s what’s important.

• No Charlie this year: For the first time ever, this years meeting was live stream only. Also Vice-Chairman Charlie Munger, 96, was not at the meeting but will return next year, Buffett said who also noted both are in good health. For now Charlie, who is known for his short but sharp answers, has added Zoom to his repertoire for meetings everyday, Buffett said.
• Successor: Next to Buffett on another table sat Greg Abel, Berkshire Vice Chairman of non-insurance operations. He joined the company in 1992 and is seen as top contender to succeed Buffett. Abel is now 57.
• Bet on America: At the beginning of the meeting Buffett discussed his longtime belief that the economy will overcome the coronavirus pandemic. „Nothing can basically stop America“, he said, looking at other crisis like WW2, the financial crisis 2008/2009 and 9/11. „Never bet against America.“
• Index funds: Buffett believes the average investor should buy index funds. „(…) the best thing to do is owning the S&P 500 index fund.“
• No more airlines: Buffett sold all airlines stocks Berkshire owned that were worth several billion dollars. They where holding bigger stakes in American, Delta, Southwest and United. Airlines are in big trouble caused by the global pandemic. „It turned out I was wrong about that business because of something that was not in any way the fault of four excellent CEOs. Believe me. No joy of being a CEO of an airline“, he said. In other words he’s not believing in a quick rebound of the industry, otherwise he had bought more.
• Big investment: With 137 billion dollar Berkshire has more cash on hand than ever — but there’s nothing to put this money in to. During the several hour long questions and answers part of the meeting Buffett said, he hasn’t seen anything attractive but is „willing to do something very big.“ He is willing to put 30, 40 or even 50 billion dollar to work, he said.
• Waiting: During the over 5 hour long meeting Buffett didn’t shared, whether he believes the worst of the corona crash is over or not. 137 billion in cash paint a clear picture though. However, Buffett knows how much weight his words have. Millions of retail investors follow the lead of the Orcale of Omaha, which may result in a big sell off for Airlines Stocks on Monday, May 4th 2020.
• At home for weeks: During this pandemic we share something with Warren Buffett: „It’s been 7 weeks since I had a haircut. More than 7 weeks since I put on a tie. It’s just a question of what sweatsuit I wear“, he said.
• Big loss: A new accounting rule requires Berkshire to report unrealized losses in equities. Cause the whole market tanked, Berkshire reported a net loss of round about 50 Billion for the first quarter. Anyway, Berkshires operating earnings rose to 5,9 billion (up from 5,6 billion in Q1/2020).
• Over the years: Buffetts Track record is big. Since 1976 shares have returned nearly 21 per cent a year. For comparison: If you had put your money in the S&P500 you would have gotten 10 per cent a year over the same period, according to CNBC.

Here you can watch the whole meeting on Yahoo Finance. CNBC also had an live ticker from the meeting in written form.