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| Berkshire Hathaway Lost $49.7 Billion in First Quarter Stung by Coronavirus | Berkshire Hathaway Lost $49.7 Billion in First Quarter Stung by Coronavirus |
| (3 days later) | |
| Not even Warren E. Buffett was spared financially from the coronavirus, as his conglomerate, Berkshire Hathaway, reported a $49.7 billion loss in the first quarter on Saturday, reflecting the outbreak’s toll on an investment portfolio that includes big stakes in major airlines and financial firms. | Not even Warren E. Buffett was spared financially from the coronavirus, as his conglomerate, Berkshire Hathaway, reported a $49.7 billion loss in the first quarter on Saturday, reflecting the outbreak’s toll on an investment portfolio that includes big stakes in major airlines and financial firms. |
| The loss was Berkshire’s biggest ever and a sharp swing from a $21.7 billion profit in the same quarter a year earlier. The conglomerate’s vast array of investments exposed it — and Mr. Buffett, long considered one of the world’s top investors — to huge swaths of the battered American economy. | The loss was Berkshire’s biggest ever and a sharp swing from a $21.7 billion profit in the same quarter a year earlier. The conglomerate’s vast array of investments exposed it — and Mr. Buffett, long considered one of the world’s top investors — to huge swaths of the battered American economy. |
| Its total investment loss for the quarter, without accounting for operating earnings, was $54.5 billion. By comparison, its investment gain in all of 2019 was $56.3 billion. | Its total investment loss for the quarter, without accounting for operating earnings, was $54.5 billion. By comparison, its investment gain in all of 2019 was $56.3 billion. |
| Berkshire said it continued to sell stock in April, totaling $6.5 billion, plowing that money primarily into supersafe Treasury bills. Later Saturday, at his annual shareholders meeting, Mr. Buffett suggested that some of those sales involved Berkshire’s reversing its roughly 10 percent in the four largest U.S. airlines. | Berkshire said it continued to sell stock in April, totaling $6.5 billion, plowing that money primarily into supersafe Treasury bills. Later Saturday, at his annual shareholders meeting, Mr. Buffett suggested that some of those sales involved Berkshire’s reversing its roughly 10 percent in the four largest U.S. airlines. |
| Berkshire’s investment loss tracked the overall slide in stock markets: The S&P 500 dropped 20 percent in the first quarter. (The company’s biggest holdings are also mainstays of the S&P 500: American Express, Apple, Bank of America, Coca-Cola and Wells Fargo, with those stakes amounting to nearly $125 billion.) | Berkshire’s investment loss tracked the overall slide in stock markets: The S&P 500 dropped 20 percent in the first quarter. (The company’s biggest holdings are also mainstays of the S&P 500: American Express, Apple, Bank of America, Coca-Cola and Wells Fargo, with those stakes amounting to nearly $125 billion.) |
| The loss overshadowed a 6 percent rise in Berkshire’s operating earnings, which track the performance of the company’s owned-and-operated businesses like the insurer Geico. Mr. Buffett regards that as a better measure of the company’s overall performance and has long argued that quarterly paper gains or losses on its investments “are often meaningless” in understanding its overall health. | The loss overshadowed a 6 percent rise in Berkshire’s operating earnings, which track the performance of the company’s owned-and-operated businesses like the insurer Geico. Mr. Buffett regards that as a better measure of the company’s overall performance and has long argued that quarterly paper gains or losses on its investments “are often meaningless” in understanding its overall health. |
| But it is hard to ignore the damage to a portfolio that includes stakes in financial firms like Bank of America and American Express, both of which reported steep drops in earnings for the first quarter, and four of the biggest U.S. airlines. (Berkshire also disclosed that the value of its stake in Kraft Heinz on its books exceeds the market value of that holding by about 40 percent, and warned that it might have to take a write-down on the investment in the future.) | But it is hard to ignore the damage to a portfolio that includes stakes in financial firms like Bank of America and American Express, both of which reported steep drops in earnings for the first quarter, and four of the biggest U.S. airlines. (Berkshire also disclosed that the value of its stake in Kraft Heinz on its books exceeds the market value of that holding by about 40 percent, and warned that it might have to take a write-down on the investment in the future.) |
| Even some of the conglomerate’s wholly owned businesses, like the Burlington Northern Santa Fe railroad and retailers like See’s Candy, were hurt by the lockdowns that have shaken the U.S. economy. Still, Geico reported a 28 percent gain for the quarter, to $984 million, while Berkshire’s overall insurance investment profits rose modestly because of increased dividend income for the company. | Even some of the conglomerate’s wholly owned businesses, like the Burlington Northern Santa Fe railroad and retailers like See’s Candy, were hurt by the lockdowns that have shaken the U.S. economy. Still, Geico reported a 28 percent gain for the quarter, to $984 million, while Berkshire’s overall insurance investment profits rose modestly because of increased dividend income for the company. |
| The first-quarter results, in which Berkshire reported having $137.3 billion in cash, were released ahead of its first-ever online-only shareholder meeting. Sometimes described as a kind of Woodstock for capitalists, the meeting is usually a weekend-long Omaha extravaganza celebrating all things Buffett and Berkshire. | The first-quarter results, in which Berkshire reported having $137.3 billion in cash, were released ahead of its first-ever online-only shareholder meeting. Sometimes described as a kind of Woodstock for capitalists, the meeting is usually a weekend-long Omaha extravaganza celebrating all things Buffett and Berkshire. |
| This year, it was a decidedly more subdued affair, reflecting the limits on mass gatherings and travel of the Covid-crisis era. Mr. Buffett’s longtime business partner, 96-year-old Charlie Munger, did not attend, staying at home in Los Angeles. | This year, it was a decidedly more subdued affair, reflecting the limits on mass gatherings and travel of the Covid-crisis era. Mr. Buffett’s longtime business partner, 96-year-old Charlie Munger, did not attend, staying at home in Los Angeles. |
| “It just didn’t seem like a good idea to have him make the trip to Omaha,” Mr. Buffett said, adding, “Charlie is in fine shape, and he’ll be back next year.” | “It just didn’t seem like a good idea to have him make the trip to Omaha,” Mr. Buffett said, adding, “Charlie is in fine shape, and he’ll be back next year.” |
| Mr. Buffett was joined instead by Greg Abel, Berkshire’s vice chairman overseeing all of the company’s non-insurance companies, who sat at a separate desk some distance from Mr. Buffett. | Mr. Buffett was joined instead by Greg Abel, Berkshire’s vice chairman overseeing all of the company’s non-insurance companies, who sat at a separate desk some distance from Mr. Buffett. |
| Instead of facing thousands of adoring and affluent shareholders, Mr. Buffett, noting that he hadn’t had a haircut in seven weeks, held forth in an almost completely vacant Omaha arena that seats more than 17,000, as his comments were livestreamed. | Instead of facing thousands of adoring and affluent shareholders, Mr. Buffett, noting that he hadn’t had a haircut in seven weeks, held forth in an almost completely vacant Omaha arena that seats more than 17,000, as his comments were livestreamed. |
| Updated June 12, 2020 | |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. | Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| Discussing the breakdown in the financial markets that prompted the Federal Reserve to drastically ramp up efforts to pump in fresh cash, he said, “We came very close to having a total freeze of credit.” | Discussing the breakdown in the financial markets that prompted the Federal Reserve to drastically ramp up efforts to pump in fresh cash, he said, “We came very close to having a total freeze of credit.” |
| When it came to Berkshire’s stake in the airlines, Mr. Buffett said, “I just decided that I’d made a mistake.” | When it came to Berkshire’s stake in the airlines, Mr. Buffett said, “I just decided that I’d made a mistake.” |
| He added that because of the pandemic’s impact on travel, “the airline business — and I may be wrong, and I hope I’m wrong — but I think it, it changed in a very major way.” | He added that because of the pandemic’s impact on travel, “the airline business — and I may be wrong, and I hope I’m wrong — but I think it, it changed in a very major way.” |