Billionaire investor Warren Buffet on Saturday exuded confidence in the US economy which is reeling under COVID-19 crisis. He said that the economy will bounce back from this phase as the "American magic has always prevailed."
The 89-year-old investor made the prediction even as his company Berkshire Hathaway reported first-quarter net losses of nearly USD 50 billion. The legendary American investor has sold his firm’s entire holdings in the four major US airlines, warning that the “world has changed” for the aviation industry because of the Coronavirus crisis.
The conglomerate had an 11% stake in Delta Air Lines, 10% of American Airlines, 10% of Southwest Airlines, and 9% of United Airlines, according to its annual report and company filings.
As quoted by an international media, Buffett told the meeting which was held virtually, "We made that decision in terms of the airline business. We took money out of the business basically even at a substantial loss."
"We will not fund a company that... where we think that it is going to chew up money in the future," he added.
"We've faced great problems in the past, haven't faced this exact problem — in fact we haven't really faced anything that quite resembles this problem," Buffett said in a lengthy speech on the country's economic history.
Buffet on Sunday warned investors of not getting in a position, so much so that market disruptions affect them badly because they are either leveraged or are psychologically unable to absorb bad news.
Buffett said he sees an extraordinarily wide range of economic possibilities, resulting from the coronavirus pandemic, but remains convinced that 'nothing can basically stop America'. Buffett cited many historical examples from the US civil war to the Great Depression to illustrate America's ability to withstand adversity.