Warren Buffett (Image: Reuters)
Warren Buffet has long been considered a guru when it comes to value investing.
The Oracle of Omaha's word is gospel to not only budding investors but some of the most respected figures in the capital markets around the world.
But Berkshire Hathaway's founder has attracted criticism for failing to make the elephant size acquisition, he has been planning to make for a while, despite the widespread carnage and equally fast recovery seen in the equities due to the coronavirus pandemic. Buffett's decision to sell Berkshire's entire airline portfolio has also been questioned by his disciples and other market participants alike.
The latest in the list of recent critics is US President Donald Trump.
“Warren Buffett sold airlines a little while ago,” Trump said at the White House on June 5. “He’s been right his whole life, but sometimes even somebody like Warren Buffett—I have a lot of respect for him—make mistakes. They should have kept the airline stocks because the airline stocks went through the roof today,” Trump added.
Berkshire Hathaway conglomerate owned 8-11 percent of the big four US carriers - American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines - at the beginning of 2020.
Other than Southwest Airlines, which was down 0.24 percent, all shares ended with massive gains on Friday. American Airlines rose 11.18 percent, followed by United Airlines (8.45 percent) and Delta Air Lines (5.5 percent).
Late last month, Buffet's longtime admirer Bill Ackman, the founder of Pershing Square Capital, dumped the firm's $1 billion worth of stake in Berkshire Hathaway saying his hedge fund can seize opportunities in the market faster than the conglomerate.
"The one advantage we have versus Berkshire is relative scale. We can be much more nimble." Ackman said.
The holding accounted for nearly 10 percent of Pershing's entire asset under management at the end of March.
While in hindsight it seems that Buffett may have missed the opportunity coronavirus brought to the capital markets, Ackman, was able to surf through the pandemic as he hedged his positions much earlier in the year citing that the creditworthiness of companies would be severely hit by the pandemic. The stout decision landed Pershing a whopping a $2.6 billion windfall early on.In mid-March, the billionaire investor went on a buying spree proclaiming that Pershing had taken off all the hedges placed to offset the effects of the coronavirus.