For all those in tears over their losses at the NSE,take comfort that the world's greatest investor ie Warren Buffet aka Oracle of Omaha,portfolio is also taking a massive beating as below

@slick - The thread becomes very long and a waste of online estate so let me respond here.

You are concentrating on the airline stocks that constitute less than 4% of the LISTED portfolio. And an even smaller % when the unlisted portfolio is included. And even tinier when the $120bn cash/treasuries is included.
I estimate max of 1.5% (of all assets) before the COVID19 crisis.
BUT I will address it.

--Yes for now its the airline stocks and cruise lines that need an immediate bailout but rest assured almost all companies in Buffet's portfolio will be asking for a bailout soon.The crisis is only just beginning and mass bankruptcies are yet to come and they will all want to be bailed out.

WB is not being sly but making smart moves in that others can also buy shares in USA airlines eg Delta, Southwest, etc.
He is seeing an opportunity but that also comes with risk while others look but do not see.

WB is benefiting from a market that he knows is rigged in his favour.He knew all these firms that he would get a bailout and has bee pushing for bailouts himself knowing he will be a beneficiary

As for the bailout of airlines, I agree that they (shareholders, executives and board) should pay the price for taking loans to buyback shares. They should have only used excess cash to do so and at prices that made sense but not those done to benefit a few e.g. CEO, CFO, etc with options. I hope they are forced to regurgitate their unearned bonuses.

We both know these executives wont pay the price and the bailouts guarantee this.These airlines should be allowed to collapse.In a free market,they would have collapsed a long time ago.The nonsense being peddled is that these airlines and even Boeing (plus inevitably all the big firms like banks) are too big to fail and will cause economic armageddon if they are allowed to implode thus must be bailed out.If the airlines fail,do the airplanes and airports cease to exist and people stop flying?No.What would happen is that if they are allowed to collapse (this applies to even other corporates like banks) new owners will scoop these assets like airplanes and other assets at bargain prices (passing the reduced costs to consumers) considering they were overvalued to begin within and resume operations.Yes in the initial bankruptcy of this overpriced airlines,there would be job losses and pain but once the new owners take up these airlines they will re-employ the staff that were let go and the owners will act responsibly knowing if they mess up like their predecessors they should expect a bankruptcy with no bailouts.The entire system will become more honest from then on.

That said, there is a case for some compensation for the airlines since the bans were not of their own making but limited to certain parameters and factors e.g. employees pay, etc. If there were no bans then they would have continued flying. Nevertheless, this does not mean a bailout that makes executives even richer as happened in 2008 with the banks. That should be a NO-NO.

Covid-19 is unfortunate but these airlines dug their own grave.If they had kept their Free Cash Flow and proceeds for borrowing in the corporate bond market as cash reserves for a rainy day like Covid-19 pandemic then they would have the cash to weather the pandemic not requiring a bailout but they wasted this money on stock buybacks and executive bonuses.Wastage in stock buybacks and executive bonuses isnt an airline phenomenon only.All of corporate America operates this way.In real life bad things like pandemics happen and a solid firm should save up reserves for such scenarios not going to beg for bailouts when things get thick

The primary reason WB can invest today is his foresight in keeping $120bn of dry gunpowder. This cash cost a lot to keep it in cash aka cash drag for years.

Yes I agree.It was wise of him to keep dry powder

Excluding the airlines (1.5% of the portfolio), there are multiple other sectors he can buy into on the cheap. I expect some sweet deals from firms requiring short-term funding. Others will be up for sale and will complement BH-owned firms. What he calls bolt-on acquisitions.

2020 will be a tough year for BH e.g. Precision Castings (Boeing is its largest customer), BNSF (drop in oil shipments), WF, JPM, USB (loan defaults) and many others but they can make it through to come out stronger thanks to the $120bn cash to cushion them. Some competitors will die. Some will sell themselves to BH.

We should learn from WB on having a diversified yet focused portfolio, not paying too much and some dry gunpowder. Sadly, I have not taken all the lessons to heart especially the dry gunpowder!

@slick - He is but one and not always the largest shareholder in many of the listed firms.

The bailouts - I am not justifying them - aren't applicable just to "his" investments. I would assume ALL airlines would benefit from a bailout and not just those he has invested in.

So of the total value of the bailout, WB/BH would benefit from just a small percentage. I do not have the numbers but if you can dig them up then we can discuss them.

Well,I think this time global stocks wont stage a V-shaped recovery like in 2008 GFC.The current crisis is unlike what we have seen before.First its a health crisis that pricked the biggest debt bubble in history that has been built up over decades.There was simply too much leverage and money printing in Western markets post 2008 and bursting of such massive debt bubbles at times takes decades to recover.It took nearly 25 years for the Dow to recover from the 1929 crash and many assume that the globe maybe going into a Great Depression type disaster.This time its not just a financial crisis like 2008 GFC but a health and monetary crisis and this could usher a whole new financial and monetary dispensation in what contrarian refer to as the great reset.I doubt the Dow will reach its all time highs of 29,551.42 anytime soon.Maybe it could do so in nominal terms if the Fed prints enough trillions to re-inflate the stock market bubble but it would be meaningless.Venezuela's stock market has been the best performing for many years because they printed their bolivar currency to hyperinflation so nominal gains are worthless.Considering that Western investors constitute the majority of the players in the NSE,how Western markets recover will have an equal trend to how the Kenyan bourse recoups from losses.If first world markets stage a V shaped recovery (I doubt they will) then yes the NSE will have a similar V shaped recovery.If I as suspect Western markets have a prolonged U shaped or even L shaped recovery then the NSE will suffer a long recovery time frame.

These firms do make these tax laws.Corporate America is the most powerful lobby machine paying off and placing their key agents in political offices to push their agenda like tax cuts.Its the whole essence of crony capitalism.When you for instance have Goldman Sachs alumni serving at US Treasury Secretaries like Steve Mnuchin,Hank Paulson,Robert Rubin is one surprised that firms like Goldman Sachs get bailed out or former ECB President Mario Draghi or Bank of England and Canada Mark Carney being Goldman alumni?

So these tax codes are pushed by corporates that favour them.Big corporates own the United States not the politicians and the political class is there to serve the corporate interests.Most of these politicians when they retire from active politics go to serve as executives in corporates.



Its unfortunate that these corporate used the revenue preserved from the tax cuts into stock buybacks and executive bonuses and the whole scheme is now unravelling as stocks tank then they go begging for bailouts.