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Warren Buffett says Berkshire sold all its airline stocks due to the coronavirus
- jjeaff 6y agoIs this being greedy when others are fearful or fearful when others are greedy? Seems like being fearful when others are fearful. Surely the market swing has already corrected for the over-valuation. Is this long term thinking on Berkshire's part? Do they think they know something the market doesn't?
- Daishiman 6y agoYou can't "correct" and price in a future where there is no certainty whatsoever. There is no current model, no ability to predict or reason about to a sufficient degree of certainty, about the situation in the airline industry. You can't even talk about risk when the only thing you have here is essentially a gamble. This is being reasonable when looking at long-term investments; there is no useful information to work with.
- jjeaff 6y agoThen why isn't the price already zero for all stocks on the market? Surely the same uncertainty applies to many or most of the companies Berkshire owns. Why haven't they fully divested their entire portfolio? Restaurants are closed, why haven't they fully sold off Dairy Queen?
- Daishiman 6y agoSelling off an asset also means that you're assuming its value will go down, which assumes some level of certainty over your position. This is not necessarily a safe assumption.
- jjeaff 6y agoRight. Which leads us back to my original assertion, which was that it seems rash to be selling off all of your airline stock considering we know so little right now.