InvestorQ : What is the reason for the massive loss reported by Warren Buffett’s Berkshire Hathaway in the March 2020 quarter?
Neelam Naik made post

What is the reason for the massive loss reported by Warren Buffett’s Berkshire Hathaway in the March 2020 quarter?

Answer
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Priyanka N answered.
5 months ago


Berkshire Hathaway has taken a big hit on account of Coronavirus pandemic and actually posted record quarterly net loss of nearly $49.70 billion. The lockdown had hit most of its businesses and its $250 billion equity portfolio had taken a steep hit on account of the pandemic. Five of the largest holdings of Berkshire viz. Apple, Bank of American, Coca Cola, American Express and Wells Fargo corrected between 15% and 45% during this period. The BNSF railroad (French railroad) saw shipping volumes fall, GEICO set aside money for car insurance premiums it doesn't expect to collect, and some businesses cut wages and furloughed workers. Retailers such as See's Candies closed down their stores. Ironically, despite the sharp fall Buffett is not buying anything and is sitting on $137 billion of cash. Buffett has said that he does not find the valuations attractive enough to make buy decisions. This marks the fifth consecutive year when Berkshire did not make any mega purchase, instead preferring to put money in Treasuries. During the quarter, Buffett exited all his airline holdings worth $7 billion. One reason for the huge loss is their policy of reporting all MTM losses as losses in the specific quarter itself.