Berkshire Hathaway's stock buys have put its Delta stake above a level Buffett likes to avoid


FRI, MAR 15, 2019


Buffett builds on Delta stake even after it hits key level 


Warren Buffett's Berkshire Hathaway has bought more than 4 million shares of Delta Air Lines, increasing its stake by 6.2 percent to 70.9 million shares.


At today's close, those shares are worth more than $3.6 billion. It's Berkshire's 12th largest stake, and bigger than the other three airlines in which the company has made investments: Southwest Airlines ($2.8 billion), United Continental ($1.8 billion), and American Airlines ($1.4 billion).


And intriguingly, Berkshire's stake now represents 10.4 percent of Delta's shares outstanding. The new purchases came after Berkshire told the SEC its stake had hit 10 percent due to Delta's buybacks of its own shares.


The proactive push above 10 percent is interesting because Buffett has said he tries to avoid having Berkshire's stakes go above that level.


He explained why in a 2017 CNBC interview:


"It complicates life for us... Once you go over 10 percent you become subject to what they call the "short-swing rule." So, if you buy and sell a stock that you have over 10 percent of in six months, you actually have to give any profit to the company...


"Plus you have to publish what you do (buy or sell stock) within two days or so after you do it, which is not the case when you're below 10 percent when you report quarterly.


"So we don't go above 10 percent very often."


Specifically referring to Berkshire airline stakes, he said then that even though carriers were buying back shares, "we will stay below 10 in all probability."


(In that interview, Buffett said that while one of his portfolio managers controls the American Airline stake, he's responsible for the others, including Delta.)


Taking note of the speculation Berkshire might go for a complete buyout of Southwest,  Andrew Bary writes in Barron's that "Buffett really ought to be looking at" Delta because it's the "best-managed U.S. airline, and its stock trades cheaply."


But, he adds, price would be a "major obstacle" because any big airline would want a large premium over its market price. 


  • Warren Buffett tells Bloomberg "I'm not a fan of MMT -- not at all." 

    Modern Monetary Theory holds that any country that borrows in its own currency can be aggressive about deficit spending because it can use its printing press to avoid bankruptcy. It's been getting attention after Rep. Alexandria Ocasio-Cortez suggested MMT could justify the enormous government expenditures needed to effectively tackle climate change.  Critics, including Federal Reserve Chairman Jerome Powell, aren't buying MMT.

    In a telephone interview today, Buffett said the risk of "spiraling inflation" is too high with MMT. “We don’t need to get into danger zones, and we don’t know precisely where they are.”
  • Buffett would probably "have a tough time holding a job these days" if he was a financial advisor and not the world-famous Oracle of Omaha, writes Jeff Cox on Michael Cross at UBS has an updated analysis showing that "over daily, monthly and even on a five-year basis (Berkshire) often falls short of the S&P 500." It's part of Crook's argument that investors need to be patient.



If Buffett does wind up having Berkshire acquire Delta, or any other airline, it would be an enormous departure from the days when he called the industry a "death trap" for investors.


Here's a collection of clips from CNBC's Warren Buffett Archive of his changing views over the years.



Berkshire Hathaway Class A shares closed at $307,250 Friday, down 0.3% over the previous four weeks, and down 1.4% from one year ago.

Berkshire Hathaway Class B shares closed at $204.31, down 0.5% over the previous four weeks, and down 1.7% from one year ago.

The benchmark S&P 500 index closed at 2822.48 up 1.7% over the previous four weeks, and up 2.7% from one year ago.



Berkshire's top stock holdings by market value, based on today's closing prices. The number of shares held is as of December 31, 2018, as disclosed in the company's February 14 13-F SEC filing.


The full list of holdings and current market values is available from's Berkshire Hathaway Portfolio Tracker.



Please send us any questions or comments about the newsletter to


If you aren't already subscribed to this newsletter, you can sign up here

Unsubscribe Manage Newsletters Terms of Service  
Digital Products Feedback Privacy Policy  
© 2019 CNBC LLC. All rights reserved. A property of NBC Universal.
900 Sylvan Avenue, Englewood Cliffs, NJ 07632
Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis.
Data also provided by THOMSON REUTERS