Made mistakes on Apple, airlines and health care, confesses Buffett

Warren Buffett regretted Apple stock sales, the circumstances surrounding its airline share dump, and a failed health care venture at his annual meeting of Berkshire Hathaway shareholders yesterday morning.

"That was probably a mistake," Buffett, chief executive of Berkshire, said of its decision to sell some of the iPhone maker's stock last year. The move was also deemed an error by his business partner Charlie Munger, who had let Buffett know of his view "in his usual low-key way," Buffett joked at the virtual meeting.

Buffett, 90, conceded that a better-than-expected economic recovery from the pandemic made the timing of some Berkshire moves last year - including its decision to drop some airline stocks - more fraught.

Stocks of airlines including Delta Air Lines and Southwest Airlines, two of the carriers Berkshire had owned, then rallied more than 45 percent after the end of May through the rest of 2020, helped by unprecedented government stimulus measures.

"I do not consider it a great moment in Berkshire's history," Buffett said of the period, adding that the economic recovery had surpassed their expectations, thanks to government stimulus measures.

Buffett also said it would have been hard for those carriers to get the federal aid that rescued them if a rich investor was considered a significant shareholder in those companies. He still wouldn't invest in airlines given current pressure on travel, he told investors.

He also reflected on the health care venture Berkshire had set up with JPMorgan and Amazon.com, to attack the "tape worm" of high-costs in the system. The venture ultimately closed this year, and Buffett acknowledged the challenges of trying to overhaul an industry with so many stakeholders. "We were fighting a tapeworm in the American economy and the tapeworm won," Buffett said.

The mea culpas were also accompanied by criticisms and quips from both Munger and Buffett. The boom in SPACs, or special purpose acquisition companies, would probably not last, said Buffett, while Munger took aim at cryptocurrencies and the explosion in retail trading. The pair chided professionals that push people who are just following a natural human instinct to gamble.

Berkshire said first-quarter operating profit rose 20 percent to US$7.02 billion (HK$54.76 billion), and that it extended its recent aggressive stock repurchases by buying back US$6.6 billion of its own stock.