Warren Buffett is undeniably one of the greatest investors. Of all time has over the 78 years he has invested for. Buffett has consistently made impressive returns over the long term, while many believe Warren Buffett was buying the dip. The recent annual shareholder meeting has revealed that he has actually been selling stocks instead of buying.

For example, Warren Buffett has sold all of his airline stocks, including 6.5 billion dollars in Delta, Airlines, United Airlines Southwest Airlines in American Airlines. In the previous quarter, Berkshire Hathaway had a total of 127 billion dollars of cash. After the first quarter of 2020, Berkshires cash pile had grown to a total of 137 billion dollars. In fact, during the time between the fourth quarter of 2019 in the first quarter of 2020, Buffett only bought one point: seven billion dollars worth of stocks despite having over a hundred billion dollars of cash in this video, we're gon na take a deep dive into why Warren Buffett is hoarding cash and whether you should too Warren Buffett is famous for the quote, be fearful when others are greedy.

As of right now, there's a lot of greed in the market, with many proclaiming that the virus is a short-term problem and that the US economy will bounce back fast. However, truth to be told, there's a lot of unpredictability in the market right now. Nobody knows where the market is headed to in the short term. Warren Buffett doesn't either as a result.

One of the reasons why he is hoarding cash is to be prepared for the worst. I don't know, and perhaps with a bias. I don't believe anybody knows what the market it's going to do tomorrow next week next month next year. I know America is going to move forward over time, but I don't know for sure - and we learned this on September 10th, 2001 and - and we learned that a few months ago in terms of the virus anything can happen in terms of markets.

And if you you can bet on America, but you got ta, have to be careful about how you bet, because uh simply because markets can do anything on october, barbara was in 1987 October 11th. I believe in Monday the markets went down 22 % in one day in 1914. They closed the stock market for about four months after 9/11, close the market for four days. We hustled to get it going again, but nobody knows what's going to happen tomorrow.

So when you, when you better, I tell you to bet on America, and I tell you that that's what's really got me - throw Evers in service. What my first talk when I was 11, I mean this. I I caught a huge, huge, huge tailwind in America, but it didn't wasn't going to blowin my direction every single day and you don't know what's going to happen tomorrow, with the Fed continuing to print money in order to save the economy. Buffet is unsure of what the consequences of this will be.

He's never seen so much action by the government before and he wants to prepare for the worst. Not only that, but Buffett does not want to rely on the hope that the government is able to save the US economy. All Volcker was a giant, and that was he was a big guy. Do he and Jay Paul couldn't see more in in temperament or anything but Jay Paul, in my view, and and and the Fed board walking up there on that pedestal because with him, because they acted in the middle of March, probably somewhat instructed by what they'd seen In two thousand, eight and nine reacted in a huge way and essentially allowed what's happened since that time do play out the way it has and then March we're in the market had essentially frozen.

Close little after midnight took these actions on March 23rd. It ended up being the largest month for corporate debt issuance, I believe in history and then April, followed through and was even a losing it with even a larger month, and you saw all kinds of companies grabbing everything coming to market and spreads actually narrowed. Then, and every one of those people that issued bonds in late March and April us in the thank you letter to the Fed makers, it would not have happened if they hadn't operated with really unprecedented speed and determination and will know the consequences of swelling the Fed's Balance sheet you'll get. You can look at the Fed's balance sheet, they put it out every Thursday, it's kind of interesting reading.

If you sort of a not like me, but it's it's up there on the internet, every Thursday and you'll see some extraordinary changes there. In the last six or seven weeks and like I say, we don't know the consequences of that and nobody knows exactly and we don't know the consequences of what there undoubtedly will have to do. But we we do know the consequences of doing nothing and that's would have been the tendency of the Fed in many years past not doing nothing but doing something in attic. But but Mario Draghi, you know brought the whatever it takes to Europe end and the Fadden.

Then that March sort of did whatever it takes squared and we almost huge thank you but we're prepared at Berkshire. We always prepare on the at on the basis that maybe the that will not have a chairman that acts like that, and we really want to be prepared for anything. So that explains some of the 124 billion in cash and bills. We don't need it all, and but we do never want to be dependent on them, not only the kindness of strangers, but the kindness of friends.

Warren Buffett surely has plenty of cash. However, he's still continuing to sell his stocks with the most notable ones being that Airlines. The main reason for this is because of how unpredictable the virus will be. Buffett doesn't know how long the lockdown will last for, and he doesn't want to put the risk of losing all of his money if or when the airlines go under to put into context of how low Buffett sold he bought into Delta Airlines at an average cost Basis of $ 46 and ended up selling all of his position at a cost basis of $ 22 per share.

The risk versus reward isn't appealing yet in Buffett's eyes. The first question, though, comes from one that just came in based on the comments that you were actually saying. This is a question that comes from William Lewis. He said, please did, I understand correctly mr.

Buffett, to say that Berkshire Hathaway sold its interests in four different airlines, and, if so, can you name them the names of those airlines be identified yeah. I wouldn't normally talk about it, but I think it requires an explanation and - and it requires an explanation, that means we were not disappointed at all in the businesses. They were being run in the management, but we did come to a different opinion on it than the the four Lord there, the four largest US airlines, it's the American Airlines and Delta Airlines and Southwest Airlines and United Continental - and I think, collectively they they probably at Least, 80 % of the revenue passenger miles and the in the was flown in the United States and and they have significant international flying to is excluding Southwest. So we like those airlines we like, but we don't like so.

The world has changed for the airlines and I don't know how it's changed and I hope it corrects itself in a reasonably prompt way. I don't know whether the Americans will have now changed their habits or will change their habits because of of an extended period if it happens that we're semi shut down and in the economy. I don't know whether the trends toward you know what people have been doing by by phone. I mean I've been it's been seven weeks since I've had a haircut at seven, been seven weeks since I more than seven weeks since I put on a tie or anything I've been just a question of which, with sweat suit, I wear of so who knows.

Who knows how we come out of this, but I think that there's certain industries and unfortunately, I think that the airline industry, among others that are really hurt by a a forced, an in fact, shut down by events that are far beyond their control Greg. Would you like to end really nothing? I had one okay, we got another Charlie yeah. I didn't. I didn't intend to use that as a line, but you know you've covered it.

Well, yeah, we would have bought other airlines to incidental, but those were the four big ones, those ones we could put some money into and we put, but whatever it was seven or eight billion into it, and we did not take out anything oh yeah, then that Was my mistake, but it was it's always a problem. If there are things on the lower levels of probabilities that happen sometimes - and it happened to their lines and and I'm the one who made the decision but Warren just to clarify on his question, he asked: did you sell your whole steak and all the answers? Yes, yeah, when we, when we sell something, we sell something very often it's going to be our entire steak. I mean we, don't we don't trim positions or like that's just not the way. We approach it any more than if we buy a hundred percent of a business, we're gon na sell it down to 90 percent or 80 percent.

I mean if we we like a business, we're going to buy as much of it as we can and keep it as long as we can, but won't we change our mind. I'm sorry no go ahead when you change your mind. Well, when we change your mind, we don't we don't take half-measures or anything, that's sort. So I was amazed at how he frankly now we thought we were selling a bit far lower prices than we paid.

But I was amazed at the the volume their Airlines always trade in in large volume relatively, but but we we have sold the entire positions overall. With the market rebounding seemingly fast, I agree with Buffett and I'm holding a portion of cash in order to buy the dip. If it comes, let me know what you think about Warren Buffett hoarding cash in the comment section below also, if you enjoyed please hit the like button and subscribe so that I know you guys want to see more videos like this. I appreciate your support.