Warren Buffett’s Berkshire Hathaway slumps to $50bn loss, their largest quarterly loss ever. The stock market sell-off hurt investment holdings despite an uptick in operating profit.
Warren Buffett, one of history’s greatest investors, has not been immune to the rough recent market environment. Today’s video is about Buffett’s quarterly report Q1 2020 or 10-Q released May 2, 2020, and what it tells us about investing in these uncertain times.
Berkshire Class A shares were down around 19% YTD as of Friday afternoon May 1, 2020, off 16% over the past 12 months. The S&P 500 is down 3% over the same period.
The Berkshire Hathaway 2020 Annual Meeting goes live on the internet this afternoon. This video gives a preview of some of the topics likely to be discussed.
Buffett recently called oil volatility and the panic hitting markets a “big one-two punch.”
The COVID-19 pandemic will likely be the largest event in insurance-industry history because it affects both sides of the balance sheet. How will this affect Berkshire Hathaway?
Auto insurers, such as Berkshire’s Geico, have returned some premiums to consumers as driving decreases, which could translate into fewer accidents. The industry may also see potential claims from business interruptions, canceled events, and workers’ compensation claims.
The COVID-19 lockdown has not been kind to value portfolios, value stocks today are highly economically sensitive and levered. By contrast, growth stocks had limited leverage coming into this crisis and software-based business models better suited to the economy effectively closing.
Buffett highlighted that many of the biggest tech stocks in the S&P don’t really require capital.
Value often performs best coming out of a recession, and for that reason everyone wants to know when will Buffett start deploying Berkshire’s 128 billion dollar cash position.
Charlie Munger told The Wall Street Journal last month that Berkshire would likely close some of its smaller holdings as a result of the pandemic but didn’t specify which specific businesses would be affected. Investors are eager to find out.
Berkshire sold off sizeable stakes in Delta Air Lines and Southwest Airlines as the coronavirus battered the travel industry.
Buffett has stated that he constantly seeks to buy businesses that meet three criteria.
1. First, they must earn good returns on the net tangible capital required in their operation.
2. Second, they must be run by able and honest managers.
3. Finally, they must be available at a sensible price.
When Warren Buffett, the Oracle of Omaha speaks, investors from around the world listen. If Warren Buffett has any words of comfort or warning for stock-market investors, they will hear them later today.
The Berkshire Hathaway Annual Meeting which last year drew over 40,000 attendees will be streamed live online at 3PM central time.
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