China News Client, Beijing, May 3 (Xie Yiguan) On May 2, US time, the shareholders' meeting of Buffett's Berkshire Hathaway Company was held as scheduled. This annual investor event was due to the epidemic this year. It was held online for the first time. Although Buffett did not attend with old partner Charlie Munger, he still explained the economic impact of the outbreak from all sides to investors.
Data map. Drawing: Wang Shanshan
"Share God" huge loss in the first quarter nearly 50 billion US dollars
Before the shareholders' meeting, Buffett's Berkshire Hathaway (Berkshire) announced its first quarterly report.
The financial report shows that Berkshire's revenue in the first quarter was 61.265 billion US dollars, compared with 60.678 billion US dollars in the same period last year; the net loss attributable to Berkshire shareholders was 49.746 billion US dollars, and the net profit in the same period last year was 21.661 billion US dollars. Investment and derivatives contracts lost US $ 70.275 billion, of which investment losses were US $ 54.517 billion.
As of March 31, 2020, Berkshire's stock investment was 113.249 billion U.S. dollars, Buffett's five largest heavy stocks American Express (with a stock market value of 13 billion U.S. dollars), Apple (with a stock market value of 63.8 billion U.S. dollars), Bank of America (20.20 billion U.S. dollars) ), Coca-Cola (US $ 17.7 billion) and Wells Fargo (US $ 9.9 billion) accounted for nearly 70% of its portfolio, and five stocks had a book loss of US $ 42.1 billion from the previous quarter.
Berkshire explained that the actions taken by the government and relevant departments to curb the new coronavirus began to have a significant impact on the company ’s business operations in March and may have an adverse impact on almost all businesses in the second quarter, despite this impact There may be great changes. It is currently not possible to reasonably estimate the duration and extent of long-term effects.
Admit to making mistakes and clear all aviation stocks
At this shareholder meeting, Buffett revealed a major investment decision-the aviation stocks that had previously been valued by Clearance.
He said that the four major US airlines (American Airlines, Delta Air Lines, Southwest Airlines, United Airlines), in addition to Southwest Airlines, other airlines have international routes. The airlines suffered particularly great losses due to the epidemic. "We bought these four major airlines and invested 7-80 billion dollars in it. Now we want to take them out. This is our fault. We are not talking about partial reductions, we changed The idea is to sell them all.
In Buffett's view, the epidemic has an impact on many industries. I particularly doubt whether the market will need so many aircraft after the epidemic. I don't know what the future of Boeing and Airbus will be. "The future looks ambiguous, especially in the tourism, aviation, cruise, and hotel industries, which have a huge impact."
It is worth noting that Buffett also increased its shareholding of Delta Air Lines in February, but reduced its shares of Delta Air Lines and Southwest Airlines in early April. Buffett also admitted at the conference that he made an "understanding error" when evaluating airline stocks, and their prices fell sharply due to the suspension of almost global travel caused by the new coronary pneumonia epidemic.
Data map: On March 23, local time, at Tulsa International Airport in Tulsa, Oklahoma, American Airlines passenger planes crowded on a runway. In order to cope with the spread of the new coronary pneumonia epidemic, airport flights are reduced.
Or resell its loss-making company
As with airline stocks, the companies that lost money due to the epidemic may be resold by Buffett "ruthlessly."
At the shareholders meeting, some investors questioned that Berkshire ’s long-term policy will not be a bottomless loss. After the closure of the closure of the city, some small companies under Berkshire will not re-open, will this affect Berkshire's long-term policy?
In this regard, Buffett said that Berkshire's long-term policy is to continue for more than 30 years, but different companies have different operations. Are they likely to lose money in the future under the epidemic situation? "Of course, these companies may be sold to others, and in any case, they will not continue to maintain these companies. This is not a new policy. This is how we do it for the aviation industry."
Think it's still a good time to buy stocks
Buffett said at the shareholders meeting that it is still a good time to buy stocks, but to prepare for a long-term response to the epidemic, it may decline even if it is bought.
He also said that the current US 30-year Treasury yield is only 1%, and the inflation rate is only 2%. In the long run, the return of stocks will be higher than that of Treasury bonds, and it will be higher than if you hide cash under the mattress.
In terms of investment strategy, Buffett said, although I do not know what will happen in a few weeks, a few months or next year. It is hoped that investors will be able to invest in stocks in a comprehensive and decentralized manner across industries and be optimistic about the future.
Holding a lot of cash, but did not find interested companies
Berkshire had $ 124 billion in cash at the end of the first quarter, nearly $ 125 billion. With so much cash in hand, many people care whether Buffett has an investment plan?
Buffett said at the shareholders' meeting that Berkshire Hathaway has not yet invested in the company because he cannot see anything appealing. "Now this situation may change soon, maybe not."
Buffett also said that I will bet on America now. "If you want to buy, just buy the entire company. We often do this. Of course, we don't mind buying part of the equity of quality companies."
Earlier, Buffett said in a shareholder letter: "We are constantly seeking to acquire new companies that meet three criteria. First, their net capital must achieve good returns. Second, they must be managed by competent and honest managers. Finally, they Must be bought at a reasonable price. "
However, Buffett also said that it is very regrettable that large-scale acquisition opportunities that meet all these requirements are actually quite rare. "More often, we still have to seize the opportunities emerging from stock market volatility and acquire a large number of shares of listed companies that meet the standards, but often cannot reach the level of holding."
Data map: May 1, local time, Texas, the United States began to "restart" the economy, restaurants, retail stores, cinemas and shopping malls can resume operations as required. The picture shows the first day of economic "restart", the light rail station in downtown Houston, few passengers. China News Agency reporter Zeng Jingning
The epidemic will lead to further decline in newspapers, automobiles and other industries
In terms of the impact of the epidemic on the industry, Buffett pointed out that the epidemic will cause further decline in certain industries. Perhaps customers in these industries will have other consumption habits and will no longer use these products.
"For example, in the newspaper industry, we have now increased investment in the newspaper industry and helped them repay their debts. But before the epidemic, the newspaper industry's advertising, sales, and circulation declined. After the epidemic, this situation was exacerbated. "
Buffett said that car dealers who sell cars will not advertise in newspapers. "This kind of situation happened before, but now it's just that the situation has intensified and become more serious."
The future of oil companies is unpredictable
Affected by the epidemic and other factors, the international crude oil market fluctuated sharply this year, and even a "negative oil price" appeared rarely.
In this regard, Buffett said at the general meeting of shareholders that crude oil production will decline significantly in the next few years because of the sharp decline in demand. Under the situation of $ 20 a barrel of oil price, if oil companies cannot continue to operate, drilling activities will decline.
"I don't know if future oil prices will increase significantly, and the future of oil-producing companies cannot be predicted. If oil prices remain low, there will be a lot of bad energy loans, and it is impossible to imagine what will happen to equity holders," Buffett said.
The banking system will not cause too many problems
"At present, there will not be too many problems in the banking system." Buffett believes that although energy companies or consumer credit may have some conditions, the banking system has sufficient capital and a lot of reserves, so the banking industry is not our main concern. .
Bank stocks are Buffett's "good heart" in recent years and are held by heavy positions. In an interview with CNBC on February 24, he said that compared to most other securities he saw, bank stocks were very attractive. "The net tangible assets of the banks we own are between 12% and 16%. This is a good deal compared to 2% of long-term bonds."
This crisis is not similar to 2008
In response to the epidemic, Buffett said, "In 2008 and 2009, our economic train deviated from the track. There are some reasons why the subgrade is weak in the bank. This time, we just pulled the track of the train and put it on the sideline. .. I really do n’t know any similarities. "
"It is not yet possible to fully predict the future development of the new coronary pneumonia epidemic," but Buffett also pointed out that you don't know, and I don't know. But the result may not be worse, nor as deadly as the Spanish flu. (Finish)