Even Warren Buffett’s Portfolio Isn’t Immune to The COVID-19 Shutdown

The comments below are an edited and abridged synopsis of an article by Tyler Durden

When Warren Buffett has been mentioned recently, it’s been in the context of wondering when he’s going to deploy some of the $128 billion in (depreciating) cash he has sitting around.

Even Warren Buffett’s Portfolio Isn’t Immune to The COVID-19 Shutdown | BullionBuzz
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Berkshire’s portfolio hasn’t been immune to the coronavirus shutdown. Buffett’s portfolio was churning out more than $20 billion in profit annually; that number is likely to come under pressure.

“We’ve got a few businesses, small ones, we won’t reopen when this is over,” Charlie Munger said.

While Buffett was able to navigate 2008 with his rock-solid balance sheet and diversification, there has been little said from Berkshire about the recent financial crisis.

Buffett has promised in the past that Berkshire would “forever remain a financial fortress.” But investors have been left wondering exactly what that means in terms of Buffett potentially deploying capital going forward. Berkshire underperformed the S&P 500 during the last bull market, and people are wondering if Buffett will take advantage of the recent pullback in valuations.

Buffett did exceptionally well during the 2008 crisis after making preferred stock/warrant deals with names like Bank of America and Goldman Sachs. Munger said the company is proceeding with caution. Berkshire is set to report earnings in May, which could shed some light on the company’s capital allocation strategies.

In his 2017 shareholder letter, Buffett said: “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.”

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