Stocks: Buffett is no Longer Investing in Aviation

Once-thriving aviation industry came to a standstill due to the coronavirus pandemic. Moreover, many airlines cloud stop to exist with financial aid. Governments around the world are ready to support the aviation industry.

Moreover, people should not forget that the aviation industry is cash-intensive and has a narrow economic moat. Also, the pandemic had a tremendous impact on the industry as most of the airlines canceled a lot of flights.

Warren Buffett decided to no longer invest in aviation stocks. It is not hard to understand why this billionaire changed his mind regarding this industry.

Governments introduced measures to curb traveling. Thus, airlines made the decision to reduce the number of employees. Furthermore, this uncertainty makes airlines stocks a volatile investment until the industry will get back on track. As a result, it made sense to sell airline stocks.

Aviation industry and fourth-richest person

It is worth mentioning that Berkshire Hathaway owns significant minority holdings in the U.S. public companies such as American Express, Apple, Bank of America, The Coca Cola Company, etc. Until recently, this list also included aviation stocks. However, Buffett is no longer investing in aviation stocks.

Berkshire Hathaway’s annual meeting was full of interesting details. Importantly, thanks to the annual meeting investors have a better idea of how Buffett is investing during the pandemic.

The world’s fourth-richest person got rid of the stocks in major U.S. airlines. Buffett sold his stake of more than 10% in both Delta Air Lines and Southwest Airlines. Also, he sold his stake in American Airlines.

His decisions and opinions influence many investment strategies. At the moment, analysts, investors are closely monitoring the situation. The coronavirus crisis created a lot of questions about the future of the aviation industry. It won’t be easy to reassure the investors after the world’s fourth-richest person sold aviation stocks.