Warren Buffett remains in bullish mood despite $50bn Covid-related losses

The 89-year-old opened the meeting in Omaha, Nebraska with one and three quarter hours of remarks to soothe anxious investors, urging them to stay committed to stocks despite this year’s bear market, even if the pandemic gets a second wind late this year.

Warren Buffett’s Berkshire Hathaway is being hit hard by the coronavirus pandemic, posting a record quarterly net loss of nearly $50bn (€45.5bn) at the weekend and saying performance is suffering in several major operating businesses.

Berkshire said most of its more than 90 businesses are facing “relatively minor to severe” negative effects from Covid-19, with revenue slowing considerably in April even at businesses deemed “essential.”

However, the billionaire investor has said the US’ capacity to withstand crises provides a silver lining as it combats the coronavirus, even as he acknowledged that the global pandemic could significantly damage the American economy and his investments.

Over more than four and a half hours at the annual meeting of Berkshire Hathaway at the weekend, Mr Buffett said his conglomerate has taken many steps responding to the pandemic, including providing cash to struggling operating units, and throwing in the towel on a multi-billion-dollar bet on US. airlines.

Mr Buffett also said he remains keen on making a big acquisition, which he has not done since 2016, but has not provided financial support to companies as he did during the 2008 financial crisis because he saw nothing attractive enough, even after the recent bear market.

The 89-year-old opened the meeting in Omaha, Nebraska with one and three quarter hours of remarks to soothe anxious investors, urging them to stay committed to stocks despite this year’s bear market, even if the pandemic gets a second wind late this year.

Illustrating his remarks with dozens of plain black-and-white slides, Mr Buffett called dealing with the pandemic “quite an experiment” that had an “extraordinarily wide” range of possible economic outcomes.

“Nothing can stop America when you get right down to it,” Mr Buffett said. “I will bet on America the rest of my life.”

The meeting began several hours after Berkshire reported a record $49.75bn first-quarter net loss, reflecting huge unrealised losses on common stock holdings such as Bank of America and Apple during the market meltdown.

Mr Buffett said operating earnings will, through at least this year, be “considerably less” than they would have been had the pandemic not occurred.

- Reuters