Trump calls out Warren Buffett for selling all his airline stocks, says he made a mistake
- Warren Buffett made a rare error when he dumped all his airline stock holdings in April, President Donald Trump said on Friday.
- "He's been right his whole life, but sometimes even someone like Warren Buffett — I have a lot of respect for him — they make mistakes," Trump said after a strong jobs report sent airline stocks skyward.
- Buffett's Berkshire Hathaway sold its stakes in the "big four" US airlines because the famed investor feared that passenger numbers wouldn't rebound and that the airlines would be stuck with "too many planes."
- Buffett also highlighted the fact that the carriers would have to repay the government loans they received earlier this year.
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President Donald Trump called out Warren Buffett on Friday, saying the billionaire investor and Berkshire Hathaway boss made an error when he dumped all his airline shares in April.
"Warren Buffett sold airlines a little while ago," Trump said. "He's been right his whole life, but sometimes even someone like Warren Buffett — I have a lot of respect for him — they make mistakes."
He added, "They should have kept the airline stocks, because the airline stocks went through the roof today."
Buffett's Berkshire Hathaway conglomerate owned 8% to 11% of the "big four" US carriers — American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines — at the start of this year. Their shares were up 18%, 9%, 5%, and 13% as of 12:40 p.m. ET on Friday.
Trump addressed the nation after the latest Bureau of Labor Statistics data showed that the US economy added 2.5 million jobs in May, upending economists' forecasts of 7.5 million job losses. Stocks surged on the news: The Dow Jones industrial average was up 914 points on Friday afternoon.
Buffett revealed his exit from the airlines at Berkshire's annual shareholder meeting last month. He justified the sale by saying he wasn't certain that passenger numbers would rebound from the coronavirus pandemic in the next few years, raising the possibility that the airlines could be stuck with "too many planes."
The investor, who has repeatedly criticized airlines as a terrible investment over the years, also pointed out that the carriers would have to repay the government loans they received earlier this year.
As part of their bailout deals, the airlines also handed over warrants that the government can convert into shares at a fixed price in the future. Moreover, Southwest and United have issued new shares to raise cash, diluting existing shareholders.
"The world has changed for the airlines," Buffett said at the meeting. "The future is much less clear to me."