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Which stocks were hit hardest during the crisis (Warren Buffett's failure)



Warren Buffett is considered one of the most successful stock investors in history, and his company Berkshire Hathaway has been involved in hundreds of super-profitable trades. But coronavirus negatively affected even the best and most experienced investors. According to the results of the first quarter of 2020, Berkshire Hathaway lost $ 49.7 billion.

The main factors were the widespread drop in stock prices of airlines, the railway operator, and the worsening situation for financial institutions. In today's article, we’ll talk about investments in which assets turned out to be the least successful against the backdrop of a pandemic.

How much Buffett lost


According to the results of the first quarter of 2020, Berkshire Hathaway recorded a loss of $ 49.7 billion. Over the same period last year, profit was $ 21.7 billion. As a result, the shares of the investment company fell 19% (chart on the teaser for the article).

Berkshire's portfolio of shares fell by $ 55.5 billion. Interestingly, operating profit, which excludes some results of investment transactions, still grew by 6% and amounted to $ 5.87 billion.

After we figured out the size of the losses, let's talk about what stocks led to this result.

Which companies were hit hardest by the coronavirus?


The reason for the loss of Berkshire Hathaway is the serious blow that the coronavirus pandemic inflicted on a number of industries. As a result, the shares of many companies have seriously fallen in price. So the S&P 500 index in the first quarter fell by 20%, and Warren Buffett's investments are also in key companies of this index: American Express, Apple, Bank of America, Coca-Cola and Wells Fargo - the total investment value is approaching $ 120 billion .

Financials Bank of America and American Express have reported a decrease in revenue the first quarter, and its shares fell.



Decline in Bank of America shares

Another segment seriously affected by the epidemic is the airline industry. In early April, it became known that Warren Buffett had reduced the share of Delta Air Lines Southwest Airlines in its portfolio by 18% and 4%. The investor himself admitted that the decision to invest in their shares was a mistake:

[As for] the aviation business - I could be wrong and hope so - but it seems to me that the epidemic has changed it very, very seriously.

Not everything was good with businesses that are wholly owned by Berkshire Hathaway. For example, the railway operator Burlington Northern Santa Fe was also seriously affected by the lockdown.

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