Jim Friedland – Director of Investor Relations Sundar Pichai – Chief Executive Officer Ruth Porat – Chief Financial Officer
Conference Call Participants Eric Sheridan – UBS Doug Anmuth – JPMorgan Heather Bellini – Goldman Sachs Michael Nathanson – MoffettNathanson Brian Nowak – Morgan Stanley Brent Thill – Jefferies Dan Salmon – BMO Capital Markets Justin Post – Bank of America Merrill Lynch Kevin Rippey – Evercore ISI Mark Mahaney – RBC Capital Markets
It’s self-contradictory to say that someone is optimistic about the long-run future economy of the US but pessimistic about the airline industry. The number of the airline passengers is positively related to the GDP growth.
The economy shutdown caused by the governments, not the pandemics, is temporary.
There were two serious nova influenzas in 1957 and 1968 spreading in the US and had caused equivalent deaths more than separately 230,000 and 165,000. Comparing to these records, the Covid-19 has costed 57,000 lives. Yes, the number would increase, however, the damage to the economy has been much worse than the two flu had caused.
According to the Fisher’s interest theory, the wealth equals to the accumulation of the future discounted incomes. If the impact is temporary, how come the wealth of the airlines is half priced now?
Considering the monetary distortion created by the Fed due to its massively increase of the M0 after 2008, the retreat of the stock market in the beginning of 2020 is actually a kind of rebalance of the nominal prices and the intrinsic values of the true productivity.
People who are familiar with economics know that the crazy monetary policies that have been adopted by the Fed will cause hyper-inflation after all. And we all know it’s more damaging to holding cash during inflation.
However, the amount of cash Berkshire holds just climbs up to the historical peak. I am wondering if Mr. Buffett has plan B or there existing some other constraints I don’t know, like the legal requirements of its risk-bearing abilities of his re-insurance companies.
As long as he sold out all of the airline shares Berkshire had owned, then there is no concern of interest conflicts. I will not be surprised if any agreement comes between Berkshire and some of the airline companies involving special debt-stock schemes that benefit Berkshire more than purchasing the stocks from the market.
每次股災崩盤我們很常看到這類統計，例如Barron’s 3/7這篇「When Will the Stock Market Recover? The Pain Isn’t Over.」：
「1929年以來，美國股市總共發生121次單日漲跌幅超過4.2%，而65個交易日後，股市終究是漲是跌的機率跟丟硬幣沒兩樣 — 50%隨後S&P500平均下跌14.5%；50%上漲18.1%。」 （ “The data back him up. Since 1929, there have been 121 one-day moves of 4.2% or more, according to John Kolovos, chief technical market strategist at Macro Risk Advisors—and in those instances, the chances of a positive return over the following 65 trading days were no better than a coin flip. Half of the time, the S&P 500 fell with an average drop of 14.5%. The other half, the S&P 500 gained an average of 18.1%.”）
（As he once described it in a 2011 interview with LEADERS magazine, “I made my fortune by turning right when everyone else was going left. In the late ’80s and early ’90s, I was buying office buildings at 50 cents on the dollar. I kept looking over my shoulder to see who my competition was, but there was no one. I could not help but question whether I was wrong. Fear and courage are very closely related.”）