Warren Buffett Silence Broken: Here’s What He Said

Warren Buffett finally broke his silence in the annual Berkshire Hathaway meeting, and shared some of his views on the current situation.

| More on:

Market crashes are simultaneously some of the worst and best times for investors. Warren Buffett and his firm Berkshire Hathaway have amassed fortunes making smart moves during past market crashes. But this one was different. Even when the market was at its lowest point, Buffett didn’t make a move, even though the company is sitting on a lot of cash.

Even more pronounced than Buffett and his company’s lack of activity was his silence. But it was finally broken in Berkshire Hathaway’s annual meeting. Buffet virtually conducted the meeting and spoke for well over four hours. The meeting was insightful in many ways. While it was mainly for U.S. investors, there were some takeaways for Canadian investors as well.

Here are two key takeaways for Canadian investors:

Airline investment prospects

The airline business is one of the worst victims of pandemic’s economic onslaught. Major airlines across the globe, including the two largest ones from the U.S. have suffered great losses. While several investors consider airlines a taboo investment right now, some optimists believe that airlines will make a full recovery. But apparently, Warren Buffett isn’t one of them.

The Wizard of Omaha cut his losses and dumped his entire stake in the airline industry, which not only pushed the stocks down even further, but also lowered the investor morale regarding the industry. Buffett claimed that he was wrong about the business.

As an investor, you may want to decide if you wish to emulate his example or stay positive about the future of the airline industry.

Investment opportunities

Warren Buffett clearly stated that he would buy if he saw a good investment opportunity. But in the last quarter, Berkshire Hathaway sold over three times more than it bought, indicating that the Wizard of Omaha is focused more on cutting his losses than he is on cultivating new investment opportunities.

But the problem is that Warren Buffett can afford to ride out the wave until he and his company are comfortable investing again. For small investors, this kind of buying opportunity doesn’t come around often. So it might be high time to consider good businesses like Granite REIT (TSX:GRT.UN). The company is a Dividend Aristocrat and it’s currently offering a juicy yield of 4.56%.

It has an adequate return-on-equity (13.5%), and its short-term liquidity ratios indicate that the company isn’t in danger of defaulting on its debts. But perhaps the best reason to consider this stock is its growth.

It grew its market value by over 96% in the past five years. Currently, it’s still trading at a 16% discount from its high yearly value, for $62.7 per share at writing.

Foolish takeaway

Learning from Warren Buffett’s wisdom and emulating his every move are two very different things. It’s a simple issue of scale. His investment decisions reflect more than simply his investment philosophy.

This is why not all of his decisions translate smoothly for everyday investors. But you should still try to learn from his wisdom and from his take on the market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short June 2020 $205 calls on Berkshire Hathaway (B shares).

More on Dividend Stocks

woman analyze data
Dividend Stocks

The Smartest Dividend Stocks to Buy With $1,000 Right Now

Do you have some cash to invest but want to earn a safe, low-risk dividend return? These dividend stocks are…

Read more »

An investor uses a tablet
Dividend Stocks

5 Canadian Dividend Stocks I Think Everyone Should Own

These Canadian stocks have a solid track record of dividend growth and offer compelling yields near their current market price.

Read more »

calculate and analyze stock
Dividend Stocks

This 4.4% Dividend Stock Pays Cash Every Single Month

This high-quality Canadian dividend stock offers an attractive yield and plenty of long-term growth potential.

Read more »

edit Safe pig, protect money
Dividend Stocks

3 TSX Dividend Aristocrats That Can Weather Any Economic Storm

Market volatility has investors wondering which stocks can withstand an economic storm. Here are three to consider today.

Read more »

people relax on mountain ledge
Dividend Stocks

Top Canadian Stocks to Buy for Passive Income 

Are you building a passive income portfolio that can beat inflation and provide higher purchasing power? You could consider buying…

Read more »

voice-recognition-talking-to-a-smartphone
Dividend Stocks

1 Magnificent Canadian Dividend Stock Down 40 Percent to Buy and Hold Forever

This magnificent Canadian dividend stock trades at a huge discount, offers stellar growth, and pays one of the best yields…

Read more »

A plant grows from coins.
Dividend Stocks

Top Canadian Stocks to Buy for Dividend Growth

Dividend growth stocks can be a good option to build a passive income that beats inflation and improves buying power.

Read more »

Concept of multiple streams of income
Top TSX Stocks

The Best Stocks to Invest $1,000 in Right Now

Here are some of the best stocks that every investor should own today to generate massive income and strong growth…

Read more »