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LIVE UPDATES: Warren Buffett discussed selling airline stocks, bailouts, and coronavirus at Berkshire Hathaway's annual meeting. Here are the highlights.

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  • Warren Buffett discussed a range of topics at Berkshire Hathaway's annual meeting on Saturday, often touted as "Woodstock for capitalists."
  • The billionaire investor and Berkshire CEO joined Greg Abel, vice chairman of non-insurance operations, to host the virtual event and answer questions.
  • Buffett revealed that it exited its positions in the "big four" airlines, explaining Berkshire's net $6.1 billion in stock sales in April.
  • The investor also talked about bailouts, coronavirus, the economy, and other subjects.
  • Visit Business Insider's homepage for more stories.
Warren Buffett discussed a range of topics at Berkshire Hathaway's annual meeting on Saturday, famously described as "Woodstock for capitalists."
The famed investor and Berkshire CEO, along with Greg Abel, vice chairman of non-insurance operations, hosted the virtual event and answers questioned posed by journalists. The event was livestreamed by Yahoo Finance.
The pair spoke hours after Berkshire released its first-quarter earnings. The company posted a record quarterly loss of about $50 billion, largely due to $55 billion in investment losses. It also grew its cash pile from $128 billion to $137 billion in the period, and sold about $6.1 billion in stock on a net basis in April, upending expectations that it would capitalize on the coronavirus sell-off and buy stocks on the cheap.
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Here are the highlights from the Berkshire annual meeting:

"Charlie is in fine shape"

Buffett opened the meeting by lamenting the absence of Charlie Munger, Berkshire's vice chairman and his longtime partner.
"Charlie is in fine shape, his mind is as good as ever, his voice is as strong as ever," he said. It "just didn't seem like a good idea" for the 96-year-old to fly from his California home to attend the meeting in Omaha, Nebraska.
"He's added Zoom to his repertoire," Buffett continued, referring to the video-conferencing app. "He's just skipped right by me technologically. Like stepping over a peanut."

"It's been a flip of the switch"

Buffett tackled the topic of coronavirus early on in the meeting.
"It's been a flip of the switch in a huge way in terms of national behavior, the national psyche, it's dramatic," he said.
"There was an extraordinarily wide variety of possibilities on both the health side and the economic side," he continued. A few months on, it's become clear that "we're not getting a best case and we know we're not getting a worst case."
"The range of possibilities is still extraordinarily wide," Buffett continued. "We do not know what exactly happens when you shut down a substantial portion of your society."
Whereas the economic train fell off the tracks in the 2008 financial crisis, Buffett said, "This time we just pulled the train off the tracks and put it on its siding."
Read more: Quant megafund AQR explains why investors should be more worried about prolonged slumps than virus-style crashes — and details a 3-part process for protecting against them

"Nothing can stop America"

Buffett reflected on the Great Depression, pointing out that someone who invested on the day of his birth in August 1930 needed to wait more than 20 years to make back their money.
He also discussed the challenges that his father faced at that time, when he had no job and two children to feed, but couldn't access his savings as the bank was closed.
"Don't worry about your groceries," Buffett's grandfather, who owned a grocery store where Buffett and Munger worked as children, told his father. "I'll let your bill run."
"He cared about his family, but he wasn't going to go crazy," Buffett joked.
When the Dow Jones passed the 381 mark in the 1950s, he said, investors feared the market was overheated and it was going to be 1929 again. Buffett's mentor and boss at the time, Benjamin Graham, was called to Washington along with a slew of other experts to assess whether the US economy was in trouble.
Now, the Dow is above 24,000. "You're looking at a market today that has produced $100 for every $1," Buffett said. "Nothing can stop America when you get right down to it."
"We are now a better country as well as an incredibly more wealthy country than we were in 1789," the next slide read. "We have gone dramatically in the right direction."
Read more: Famed economist David Rosenberg nailed the housing crash. Now he says this crisis won't end as quickly as it began and shares an investing strategy for the next 3 years and beyond.

"I hope I've convinced you to bet on America"

Buffett linked his optimism back to the current threat to the global economy. He also underlined his company's commitment to funding its own operations, and warned against the dangers of debt.
"When something like the current pandemic happens it's hard to factor that in and that's why you never want to use borrowed money to buy into investments," he said. "We run Berkshire that way."
"There's no reason to use borrowed money to participate in the American tailwind," he added.
Buffett also trumpeted the merits of stocks.
Equities are an "enormously sound investment," he said, that will outperform US Treasuries and the money people have stashed under their mattresses over time.
Buffett also discouraged people from selling stocks purely because their prices change.
"If you owned the businesses you liked prior to the virus arriving, it changed prices, but nobody's forcing you to sell."
The Berkshire boss recommended "the best thing" for investors to bet on is the S&P 500 index, as it gives them a broad cross-section of American businesses.
"I will bet on America the rest of my life," Buffett said. "I hope I've convinced you to bet on America."

"It hurts some of our businesses a lot"

Buffett addressed the impact of coronavirus on Berkshire's companies.
"For some period, certainly during the balance of year ... our operating earnings will be considerably less than if the virus hadn't come along," he said. "It hurts some of our businesses a lot."
While Berkshire's three biggest businesses — insurance, the BNSF railroad, and Berkshire Hathaway Energy — are in a "reasonably decent" position," Buffett said, other businesses have been "effectively shut down."
Buffett also defended the company's growing cash reserves.
"We don't want to be dependent on the kindness of friends even," Buffett said, let alone strangers. "There are times when money almost stops," he added, pointing to the 2008 financial crisis and the liquidity crunch just over a month ago.
"Investment-grade companies were essentially going to be frozen out of the market" in late March, Buffett said, before the Federal Reserve "reacted in a huge way."
"Fear is the most contagious disease you can imagine, makes the virus look like a piker," he added, using a term for a gambler who only makes small bets.

"I was wrong"

Buffett shed some light on Berkshire's stock-market activity in recent months. "We did very little in the first quarter," he said.
However, he pointed to Berkshire's sales of $6.1 billion in stocks on a net basis in April, and explained that figure reflected its exit from its positions in the "big four" US airlines.
"It turned out I was wrong," Buffett said about the bets on American, Delta, United, and Southwest. He explained that the airline business has "changed in a very major way."
The investor questioned whether people would fly as much in the next two or three years as they did last year. Even if 70% or 80% of the airline business returns, he continued, the carriers could end up with "too many planes."
Later, he added that an oversupply of airline seats would drive down prices, and it was unclear how long the airlines would have to sustain billions of dollars in operating losses.
Moreover, they will have to repay their recent loans from the government out of their earnings, he said. They also agreed to hand over warrants that the Treasury can exercise to buy their shares at a discount in the future then sell them for a profit, potentially weighing on the carriers' stock prices in the future.
"The future is much less clear to me," Buffett said about the airline business.

Bailouts

Buffett addressed the question of whether Berkshire would be bailing out companies as it did during the financial crisis. He said that the Fed's speed in lending to struggling companies meant there was less need for Berkshire's cash this time around, and no attractive opportunities have come Berkshire's way so far.
However, there was some early interest, Buffett revealed.
"There was a period right before the Fed acted," he said. "We were getting calls. A number of them were able to get money in the public market, frankly at terms that we wouldn't have given them."
Buffett and Abel added that none of Berkshire's fully owned businesses have applied for government aid.

See's Candies

Buffett discussed the tough situation at See's Candies, which he's described as his "dream business."
"We were in the midst of our Easter season, and Easter is a big sales period for See's," he said. "See's business stopped and it's a very seasonal business to start with. We have a lot of Easter candy. Easter candy's kind of specialized too, we won't sell it. We produced quite a bit of it ... we couldn't sell it.
He also acknowledged that not all businesses will last, giving the example of Blue Chip Stamps, a trading stamps company that Berkshire invested in back in the 1970s.
This story is still developing....
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