Warren Buffett defends Berkshire decisions in pandemic year


Berkshire Hathaway Inc. chairman and CEO Warren Buffett on Saturday defended the company’s investments over the past year as the coronavirus pandemic initially caused stocks to plummet, before the market does not turn around and reach record highs.

A year ago, as the pandemic set in, Buffett sold all of his stakes in major airlines. He also reduced his stakes in several banking companies and did not make any significant acquisitions even as the markets were in sharp decline. Since then, the airline industry has been one of the most important to rebound and the market at large has surged. Shareholders questioned whether Buffett was active enough during a potentially opportunistic time.

“I don’t consider this to be a big moment in Berkshire history, but we have more net worth than any business on Earth,” he said. “And I still don’t want to own the airline business.”

Buffett said the decision to cut the number of airlines reflects a broader belief in the future of the industry, especially in what is likely to happen to business travel.

Buffett also addressed several other matters on Saturday, including the decision to hold the meeting in Los Angeles and commented on the company’s quarterly results.

As Buffett, 90, and his 97-year-old business partner Charlie Munger advance in age, succession has become an increasingly important topic for shareholders. Some investors have asked to know more about Buffett’s successors and potential vice-presidents Ajit Jain and Greg Abel, who respectively oversee the company’s insurance business and operations. The two men joined Buffett and Munger in Los Angeles.

With millions of Americans out of work, Buffett spent much of the 2020 meeting emphasizing the economy’s ability to bounce back from adversity. A year later, Buffett speaks as the US economy has greatly improved and 30% of Americans are fully vaccinated against the coronavirus.

However, Berkshire BRK.B,
+ 0.06%
faces increased pressure this year. Some of its shareholders want the conglomerate to recruit new directors and disclose more information on climate risks and executive compensation. The company’s returns have been below the S&P 500 for the past five years.

Berkshire Class A BRK.A,
+ 0.08%
Hares closed at $ 412,500 on Friday, down 1.3%.

An extended version of this story appears on WSJ.com.


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