Berkshire Hathaway: Trump on Warren Buffett’s Airline Sales: “He Made a Mistake” message

—• Berkshire Hathaway posted a total of approximately $ 50 billion in losses in the first quarter

• “He was right all his life, but sometimes someone like Warren Buffett does […] an error ” Donald Trump

• Courses are far from recovering – Buffett may have been right again

Surprisingly and against all expectations, the unemployment rate fell from 14.7 percent in April to 13.3 percent in May – apparently 2.5 million new jobs were created last month. At his White House address on Friday, Trump spoke about this progress and the rising Dow Jones, and publicly criticized Warren Buffett’s investment in Berkshire Hathaway.

Buffett sells all shares to airlines

Trump’s criticism relates to Buffett’s sale of all shares in the airline, Buffett announced at Berkshire Hathaway’s annual meeting in early May. The basis for this was that the major airlines posted losses for the first time in years: “The world has changed for the airlines,” said Buffett at the meeting. Berkshire Hathaway sold all of the shares in the airline, not just part of it, because the company “doesn’t do things halfway” when it changes the mind about an investment. In total, Berkshire Hathaway lost approximately $ 50 billion in the first quarter of 2020.

The prices are rising again

While the Dow Jones rose 3.1 percent last week and the S&P 500 gained 2.6 percent in value, the share prices of the major airlines sold by Buffett also rose again: United Airlines shares gained 16.8 percent Value, Delta Air Lines 10.4 percent, American Airlines paper 21 percent, and Southwest Airlines 5 percent.

From this fact, Trump apparently concluded that Buffett made a big mistake with the sales: “Warren Buffett sold airlines a while ago. He was right all his life, but sometimes someone like Warren Buffett – I respect him very much – makes mistakes You should have kept the airline shares because the airline shares went through the roof today. ” In his speech, Trump even went so far as to interpret the slowly falling unemployment rate as a sign of a possibly rapid economic recovery from the crisis.

Airline shares plummeted by almost 70 percent in May

After Berkshire Hathaway has long avoided investing in airlines, the company has been investing in the four major airlines since Q4 / 2016 and this was apparently very profitable given a long period without losses. But the sharp rise in prices on Friday could not make up for the losses written in April and May: Compared to the value of the shares at the end of December 2019, American Airlines lost 62.9 percent, Delta 58.7 percent, Southwest Airlines 45.8 percent and United Airlines 69.7 percent in value. Berkshire Hathaway owned between 7 and 10 percent of the shares of all airlines and thus contributed a large part of the loss in value of the companies.

So whether Buffett might have been right to sell the shares for the benefit of his company will only be clear to the public and the critical president of the United States with the new quarterly figures in his portfolio.

Olga Rogler / editors finanzen.net