Investment sage Warren Buffett has sold his airline holdings and doesn’t see any bargains in the market at present.

Those were the key headlines from a remotely streamed AGM hosted by Buffett after the global pandemic forced Berkshire Hathaway to cancel the annual pilgrimage to Omaha which usually attracts 40,000 devotees keen to take part in the ‘Woodstock for Capitalists’.

He remains confident in the long-term outlook for the US economy and stocks, saying they had faced big challenges before, including serious pandemics such as the Spanish Flu in the aftermath of the First World War, yet had eventually
delivered greater wealth and higher standards of living over time.

However he acknowledged the pandemic could significantly damage the economy in the short term.

One investor question was raised around share repurchases. In the final quarter of 2019 Berkshire spent $2.2bn buying its own stock. Why hadn’t Buffett continued buying shares when they traded 30% lower in March this year?

In typical Buffett fashion he used a quote attributed to famed economist John Maynard Keynes, saying: ‘When the facts change, I change my mind, what do you do sir?’ Effectively Buffett implied that his estimate of fair value for Berkshire had dropped more than the share price and is no longer trading at a discount.

Buffett has sold all of Berkshire’s interests in airline stocks, calling his decision to buy them a mistake. Over the first quarter the company raised $5.9bn of net cash resulting in a record $137.3bn of available liquidity.

Berkshire hasn’t made a large acquisition since 2016 but is apparently willing to make a transaction in the $30bn to $50bn range.

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