CNBC’s Jim Cramer said Monday that legendary investor Warren Buffett gave “no hope near term” in his annual shareholder meeting on Saturday with his sale of airline stocks.
“Buffett’s overview on airlines really does make me very concerned about the near term,” Cramer said on “Squawk on the Street.”
The billionaire investor said Saturday that Berkshire Hathaway had sold all of its airline stocks because of the coronavirus pandemic. The conglomerate previously had investments in United, American, Southwest and Delta Airlines worth roughly $4 billion.
Airlines have been one of the major industries most impacted by the coronavirus pandemic, which has slowed global travel to a trickle. Many airlines negotiated loans from the federal government and have been cutting flights across the country in an attempt to stem losses.
“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,” Buffett said during the meeting.
Cramer said that he viewed Buffett bailing on airlines as a sign that there were serious issues in the broader economy.
“I think they very much are a microcosm of a big chunk of not the U.S. economy, if not the world economy in some cases, as he said,” Cramer said.
Major airline stocks were down sharply in early trading after Buffett’s announcement, with United, Delta and American all down more than 10%.
To be sure, Buffett was still bullish on the American economy long term.