Warren Buffett:Tips to Invest During the Coronavirus

The Federal Reserve is giving us the gift of low interest rates. Warren Buffett recommends taking advantage of this opportunity to borrow money at these low rates.

 “This is a very good time to borrow money, which means it may not be such a great time to lend money, but it’s good for the country that it’s a good time to borrow money,” he said in at his Berkshire Hathaway company’s online shareholders meeting this past May.

For those looking to invest in real estate, rates on new and refinanced mortgages are the lowest on record . Some rates are as low as  under 3%.

Warren Buffett Berkshire Hathaway (NYSE:BRK.A) sold off his airline stocks. One in particular is Delta Air Lines  The stock price lost half its value since the beginning  of the year. He says, “The airline business, and I may be wrong, and I hope I’m wrong,  changed in a major way,”

Listen to the Oracle of Omaha- Warren Buffet told his shareholders in a letter that it would be some kind of “total surprise” that would dwarf devastating hurricanes Katrina and Michael.

Warren Buffett recommends to start paying down those high interest credit cards.

Warren Buffett  is confident the U.S. economy will bounce back from the COVID-19 pandemic.

Here is an excerpt from his 2003 letter to shareholders on why he invests in bank stocks.

Berkshire Hathaway (NYSE:BRK.A) The question about banking, you know, banking — if you can just stay away from following the fads, and really making a lot of bad loans, banking has been a remarkably good business in this country. And there are many — there are certain banks, I should say — in this country that are quite large that are earning, you know, maybe 20% on tangible equity. And when you think you’re dealing in a commodity like money, that’s fairly surprising to me. So, I would say that I guess I’ve been surprised by the degree to which margins in banking have not been competed away in something as fundamental as money. Now, part of it is that they push — they have pushed the loan-to-capital ratios higher than 30 or 40 years ago, but that — nevertheless they earn high rates of returns. They earn much higher rates of returns on assets alone, and then they have greater leverage of assets-to-capital so that produces returns on capital that really are pretty extraordinary.”

Even today Warren Buffett believes banks can still earn attractive returns on tangible capital.

Warren Buffett is an American investor, business tycoon, and philanthropist, who is the chairman and CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth of US$88.9 billion as of December 2019, making him the fourth-wealthiest person in the world.[i]

Warren Buffett Current Holdings

 

Ticker                    Company             Industry               Market Cap $Mil               Shares   Value ($1000)    Shares Change %                 Weighting %       Trade Impact %                 % of Shares outstanding                3M Change %     YTD Change %

PNC                       PNC Financial Services Group Inc               Banks    45,162.53             9,197,984             880,431                +6.08% 0.50        +0.03% 2.17        +15.91%               -33.80%

DAL                        Delta Air Lines Inc            Transportation  17,864.41             71,886,963           2,050,935             +1.38% 1.17                +0.02% 11.27     +1.67% -52.56%

UAL                        United Airlines Holdings Inc         Transportation  10,075.59             22,157,608           699,073                 +1%                0.40        0%          7.63        +0.21% -62.46%

AAPL                     Apple Inc             Hardware            1,581,338.78       245,155,566        62,340,609           0%          35.52     0%                5.66        +46.18%               +23.16%

BAC                        Bank of America Corp     Banks    214,461.10           925,008,600        19,637,932           0%          11.19     0%                10.66     +14.08%               -31.37%

KO                          Coca-Cola Co      Beverages – Non-Alcoholic           192,969.47           400,000,000        17,700,001           0%                10.08     0%          9.31        +14.22%               -17.85%

AXP                        American Express Co      Credit Services  78,742.31             151,610,700        12,979,391           0%          7.39                0%          18.83     +14.11%               -22.61%

WFC                       Wells Fargo & Co              Banks    112,175.94           323,212,918        9,276,210             0%          5.28        0%                7.88        -7.92%  -49.55%

KHC                        The Kraft Heinz Co           Consumer Packaged Goods         38,952.01             325,634,818        8,056,205                0%          4.59        0%          26.65     +41.50%               +2.49%

MCO                      Moody’s Corporation     Capital Markets 51,727.52             24,669,778           5,217,658             0%          2.97                0%          13.16     +35.93%               +12.32%

USB                        U.S. Bancorp      Banks    57,314.29             132,459,618        4,563,233             0%          2.60        0%          8.79                +19.52%               -37.11%

BK                           Bank of New York Mellon Corp   Asset Management        33,779.65             79,765,057           2,686,487                0%          1.53        0%          9.01        +21.10%               -24.80%

CHTR                     Charter Communications Inc       Media – Diversified          105,297.47           5,426,609             2,367,684                0%          1.35        0%          2.63        +21.12%               +4.72%

V                             Visa Inc Credit Services  426,095.13           10,562,460           1,701,823             0%          0.97        0%          0.50                +24.06%               +2.19%

COST                     Costco Wholesale Corp  Retail – Defensive            132,691.11           4,333,363             1,235,572             0%                0.70        0%          0.98        +4.84% +1.85%

MA                         Mastercard Inc  Credit Services  299,124.65           4,934,756             1,192,040             0%          0.68        0%                0.49        +24.19%               -1.27%

KR                           The Kroger Co    Retail – Defensive            25,771.23             18,940,079           570,475                 0%          0.33                0%          2.41        +9.39% +14.32%

MTB                       M&T Bank Corp Banks    13,485.29             5,382,040             556,665                 0%          0.32        0%          4.20                +5.32% -38.07%

LSXMA                  Liberty SiriusXM Group  Media – Diversified          12,964.18             14,860,360           470,925                 0%                0.27        0%          4.74        +23.28%               -29%

GL                           Globe Life Inc     Insurance            7,733.78               6,353,727             457,278                 0%          0.26        0%                5.97        +9.17% -32.02%

 

 

[i] https://en.wikipedia.org/wiki/Warren_Buffett

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