Warren Buffett gives a lesson on when to sell a share: the sale of all his US airline shares

A downward movement on the stock market is not a reason to sell a share. What matters is the underlying economics and quality of management.  If those economics or management deteriorate then it might be a candidate for sale, but this is not because Mr Market has shoved the price down.  Warren Buffett said a few days ago,

 

 

 

 

 

“If we hold stock XYZ, and we like the business, and the stock goes down 20, 30 or 40% we don’t feel we’re poorer.

We would feel we were poorer if [when something like] what happened to the airline business [occurs]. The world has changed for the airlines.

The virus will cost Berkshire money. It doesn’t cost it money because our stock moves around…But there are certain industries – the airline industry among others – that are really hurt by a forced shutdown.”

He sold, in April, all the airline shares held by Berkshire for $6bn, making a $1bn- $2bn loss on these four investments.

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