Warren Buffett: ‘American magic’ will spur US economic recovery

WASHINGTON: Billionaire investor Warren Buffet said Saturday he’s confident the US economy will bounce back from its pummeling by the coronavirus pandemic because “American magic has always prevailed.”

The 89-year-old made the sanguine prediction about the world’s largest economy as his holding company Berkshire Hathaway reported first-quarter net losses of nearly $50 billion.

Buffett also announced Saturday that his company had sold all its stakes in four major US airlines last month, as the pandemic clobbered the travel industry.

“It turns out I was wrong,” he said of his acquisitions of 10 percent stakes in American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.

Berkshire Hathaway had paid $7 billion to $8 billion, and “we did not take out anything like that,” he said.

Between the purchases that took place over months, and the sale, “the airlines business I think changed in a very major way” and could no longer meet Berkshire criteria for profitability, he said.

Buffett’s announcement may further hurt airlines already pushed to the brink by coronavirus lockdown measures, now looking to the US government for $25 billion in relief funds.

Berkshire Hathaway, based in Omaha, Neb