rtmark
LearnBonds.com

Retail investors bought airline stocks, as Warren Buffett looked for a parachute

Mohit Oberoi
Author: Mohit Oberoi

Last Updated: May 5, 2020

Retail investors at TD Ameritrade brought airline stocks in April, at the same time that Warren Buffett (pictured) was getting out of the airline business.

Most airlines globally are grounded due to the pandemic with schedules around 90% of what they were a year ago. But that hasn’t stopped retail investors from buying airline stocks, according to JJ Kinahan, TD Ameritrade’s chief market strategist. He said retail investors that have accounts with the company were net buyers of airline stocks in April.

However, at the weekend, Buffett, at the annual meeting of his investment firm Berkshire Hathaway’s revealed that the company sold its stakes in the country’s three biggest airlines — Delta Airlines, United Airlines, and American Airlines.

Kinahan said: “Nobody in their right mind normally fades Mr. Buffett, but with that being said, I think people are buying these and saying, ’OK, this has to be a longer-time-frame investment. I don’t think you’re buying these thinking that that business is coming back immediately.”

But at the weekend Buffett, often called the world’s most famous investor, said: “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.” Berkshire Hathaway held significant stakes in Southwest Airlines, Delta Airlines, American Airlines, and United Airlines.

According to Kinahan, in April apart from airline stocks retail investors also added Boeing, Carnival Corp, Exxon Mobil, Disney, and AT&T stocks. Boeing recently raised debt that would help it survive the pandemic.

Retail investors lowered their exposure to markets last month. Kinahan added: “In March, it seemed as though they were willing take a few more chances, if you will, and buy stocks with less of a correlation to the overall market.”

He added, “Our clients are definitely putting money to work and have come out a bit [from] more of the pure, fixed-income trade into buying some equities.”

US stock markets rebounded sharply last month and the S&P 500 had its best month since 1987. Prior to that markets crashed in March.

Note: You can check our recommended list of stockbrokers. You can also check our recommended list of brokers for CFDs.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission

Rating

64 traders signed up today

Visit Now

75% of investors lose money when trading CFDs.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

What we like

  • 0% Commission
  • Trade Stocks Via CFDs
  • Authorized & regulated by the FCA

Min Deposit

$100

Charge per Trade

Zero Commission

Rating

Visit Now

76.4% of retail investor accounts lose money when trading CFDs with this provider.

Available Assets

  • Total Number of Stocks & Shares+2000
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Future
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • Dax Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire transfer
  • Credit Cards
  • Bank Account
  • Paypal
  • Skrill
All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Mohit Oberoi

Mohit Oberoi is a freelance finance writer based in India. he has completed his MBA with finance as majors and also holds a CFA charter. He has over 13 years of experience in financial markets. He has been writing extensively on global markets for the last six years and has written over 6,500 articles. He mainly covers metals, electric vehicles, asset managers, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.