What if you lose $6+ Billion?

The coronavirus pandemic has spared no one, not even the genius master investor Buffett! If someone told you that his stocks are immune to this sudden market crash, he or she must be a liar. Sure you can make some money by shorting stocks but for the vast majority who only long stocks, the pain can be felt every where. But before you feel too depressed about the paper loss of your stocks, think about what you would feel if you lost more than $6 Billion virtually overnight? Feel better please that you will never lose this much money😋 Believe or not, it is Buffett who has just experienced this draconian loss on paper! What happened? Well, if you don't know yet, Buffett loves and has been investing in airlines major way. In total, Buffett has invested more than $10 billion in four different airlines (see the chart below). I guess you don't need me to tell you what the airlines are doing these days, all down big time. At the worst just days ago, they crashed in average by about 60%, fighting for survival at the moment. So Buffett got a haircut for about $6 Billion off his book at least for now.  

What do you think Buffett will do for this kind of fast losing stocks? I bet nothing, if not adding more shares. After all, this is not a normal crash due to immediate fundamental problems for the airlines. It is an unexpected non-economic health crisis that is temporarily pushing all the airlines to a full stop. With the much needed governmental rescue funding coming, they should stabilize. As such, I won't be surprised to see Buffett to even add more shares if he sees the worst is over. 

Before I finish, let me share what Ben Bernanke, the former Federal Reserve chairman, thinks about this crisis.  

Bernanke told CNBC on Wednesday the coronavirus economic halt is more like a "major snowstorm" than an economic depression."This is a very different animal than the Great Depression," Bernanke stressed. "The Great Depression, for one thing, lasted for 12 years, and it came from human problems: monetary and financial shocks that hit the system.""This has some of the same feel of panic, some of the feel of volatility," he said in a "Squawk Box" interview. "It's really much closer to a major snowstorm or a natural disaster than it is to a classic 1930s-style depression."Bernanke said he does expect a "very sharp" U.S. recession, but also a "fairly quick" recovery.