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Apparently Buffet isn't afraid of the printer, which is massively disrupting what should be a bear market.

by axaxs 6y ago

vkou 6y ago
Regardless of whether or not we are printing money, it's better to invest into companies that have a future, as opposed to ones that are going to be limping along. Airlines will need a lot of government money to stay afloat, and it may come with strings attached, to the detriment of shareholders.
- axaxs 6y ago
  But that's now impossible to know. Any bailed out company by definition had no immediate future. Yet here we are.
  - ben_w 6y ago
    Understanding the investments, having at least a rough idea of their future potential, is one of Buffett’s things. That’s why it should be no surprise he’s pulled out of this sector.
    - axaxs 6y ago
      And I'm saying it's all fooey. A real 'oracle' in a free market would have pulled out in January. The government is not going to let the airlines fail. To be clear, I'm not insulting or saying I know better than Buffet, just that the Fed throws a wrench in all logic.
      - blackrock 6y ago
        Can the Fed really save them all? So much for being a self-proclaimed “free market”. We might as well call this the United Socialist States of America.
      - greenyoda 6y ago
        > The government is not going to let the airlines fail. Just because a company won't fail doesn't mean it's a good investment to hold on to. Maybe Buffett thinks that it will take years for the airlines to become profitable again, or even that they'll never be profitable again and will be subsidized by the government forever.
      - boublepop 6y ago
        You Are trying to reason as if the action happened in a vacuum. He’s not pulling out the money because he’s certain the entire airline industry is going to disappear. He’s pulling out because the uncertainty for the industry is much higher than his investments in other industries. The fact that the Fed is throwing wrenches in normal logic supports that decision, it doesn’t negate it.
      - ben_w 6y ago
        > The government is not going to let the airlines fail. That’s pretty much the logic my dad used when he advised me to invest £1,000 in Lloyds bank when I was still at university. LLOY is currently trading at 5% of the price I paid for them. Not 5% less, which would be bad enough after 15 years, but 5% of their original value.
    - soneil 6y ago
      I think it was more a surprise that he bought in at all. Interesting reading in this context, is from 2017, when they bought into these positions - https://www.businessinsider.com/warren-buffett-blasted-the-airline-industry-before-investing-billions-in-it-2017-3?r=US&IR=T https://www.businessinsider.com/warren-buffett-blasted-the-a... Buffett appears to have very much a love/hate relationship with the Air sector. Every time he buys in, he gets bitten.

Apparently Buffet isn't afraid of the printer, which is massively disrupting what should be a bear market.

by axaxs 6y ago

Apparently Buffet isn't afraid of the printer, which is massively disrupting what should be a bear market.

vkou 6y ago

Regardless of whether or not we are printing money, it's better to invest into companies that have a future, as opposed to ones that are going to be limping along. Airlines will need a lot of government money to stay afloat, and it may come with strings attached, to the detriment of shareholders.

axaxs 6y ago
But that's now impossible to know. Any bailed out company by definition had no immediate future. Yet here we are.
- ben_w 6y ago
  Understanding the investments, having at least a rough idea of their future potential, is one of Buffett’s things. That’s why it should be no surprise he’s pulled out of this sector.
  - axaxs 6y ago
    And I'm saying it's all fooey. A real 'oracle' in a free market would have pulled out in January. The government is not going to let the airlines fail. To be clear, I'm not insulting or saying I know better than Buffet, just that the Fed throws a wrench in all logic.
    - blackrock 6y ago
      Can the Fed really save them all? So much for being a self-proclaimed “free market”. We might as well call this the United Socialist States of America.
    - greenyoda 6y ago
      > The government is not going to let the airlines fail. Just because a company won't fail doesn't mean it's a good investment to hold on to. Maybe Buffett thinks that it will take years for the airlines to become profitable again, or even that they'll never be profitable again and will be subsidized by the government forever.
    - boublepop 6y ago
      You Are trying to reason as if the action happened in a vacuum. He’s not pulling out the money because he’s certain the entire airline industry is going to disappear. He’s pulling out because the uncertainty for the industry is much higher than his investments in other industries. The fact that the Fed is throwing wrenches in normal logic supports that decision, it doesn’t negate it.
    - ben_w 6y ago
      > The government is not going to let the airlines fail. That’s pretty much the logic my dad used when he advised me to invest £1,000 in Lloyds bank when I was still at university. LLOY is currently trading at 5% of the price I paid for them. Not 5% less, which would be bad enough after 15 years, but 5% of their original value.
  - soneil 6y ago
    I think it was more a surprise that he bought in at all. Interesting reading in this context, is from 2017, when they bought into these positions - https://www.businessinsider.com/warren-buffett-blasted-the-airline-industry-before-investing-billions-in-it-2017-3?r=US&IR=T https://www.businessinsider.com/warren-buffett-blasted-the-a... Buffett appears to have very much a love/hate relationship with the Air sector. Every time he buys in, he gets bitten.