Stocks Are in Trouble

Never before have I lived through a time like this.  The Pandemic has taken stocks on a roller coaster.  The market just crashed 30 plus percent and is roller coastering up and down constantly.   But one of the most shocking and telling things has just happened.  As of May the 4th 2020 Warren Buffet just sold all his airline stocks.  Take a minute to breathe and let that fact sink in.  Warren Buffet is known for being one of the greatest stock investors of all time.  He knows when to buy and he knows when to sell and his success speaks for itself.

In the 2008 housing crash the stock markets went wild.  Many people lost all their retirement funds.  The whole country lost faith in out system and the government had to bail out many major corporations that went bankrupt and were on the verge of shutting down.  They were deemed to big to fail for our economy so the government gave them money to float them.  That was the time Warren Buffet purchased a massive amount of stock as it reached its lowest amount.  He made massive amounts of money by waiting and purchasing when the price was literally the lowest it had been in my lifetime. Intelligent speculator is also known for dominating and playing the short game when markets fall.  But Warren Buffet made one of the greatest moves of all time and he is hailed as a genius because of it.

Now its 2020 and he is selling all of his airline stock.  So what does this mean.  It could be presumed that he thinks the airline market has much further to fall.  Right now it looks like the market is on the rise and prices may be climbing back as out economy starts to open up.  Most states have put into place a plan to remove the stay at home orders in a week to two weeks and confidence is slowly starting to increase in the market place.  But if Warren Buffet is selling that means it is most likely that he has some inside information letting us now know we are in for a world of falling prices.

This could mean that the market will take a big fall in the future and that the airlines are in big trouble.  Will it mean that they will all be going bankrupt due to the lack of travel and cut back of roughly 50% of all flights this month? It could mean a government bailout or even worse the federal government may even take control of the airlines once they go.  A new world awaits us. Remember we are only talking about the market as we see it.  Please see your local broker, investment firm, or attorney for financial advice.