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Buffett's Airline Exit Offers 'No Hope' In Short-Term, Cramer Says

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Buffett's Airline Exit Offers 'No Hope' In Short-Term, Cramer Says

Billionaire investor Warren Buffett disclosed over the weekend that his Berkshire Hathaway Inc. (NYSE: BRK-A) (BRK-B) fund divested all of its airline holdings, which paints a concerning picture for the near-term economic outlook, CNBC's Jim Cramer said Monday on "Squawk on the Street."

Airlines A 'Microcosm' Of US Economy?

Buffett could have said over the weekend that he plans to "stick with the airlines" amid expectations for an eventual recovery, Cramer said. Yet his bearish views confirm that anyone who believes the travel industry will rebound in the near-term has gotten it "really wrong," the CNBC host said.

"Buffett's overview on airlines really does make me really concerned about the near-term," Cramer said.

Buffett also said over the weekend that there is simply "no reason" for him to own airline stocks, but the broader takeaway is that airliners might be a "microcosm of a big chunk of the U.S. economy," Cramer said.

Buffett Offers 'No Hope'

Any debates surrounding a longer-term recovery is "very much in play," but many Street analysts seem to agree a recovery will happen and are debating if it will be "V-shaped" or "U-shaped," Cramer said.

If anything, Buffett's outlook on the airlines suggests the "Oracle of Omaha" believes recovery will come in the form if a "very elongated U" or even an "L" recovery, Cramer said,

While this debate will carry on, one thing is clear, he said: Buffett offered "no hope" for the near-term.

Related Links:

With Buffett Bailing, It Could Be A Black Monday For Airline ETF

'I Was Wrong': Warren Buffett's Berkshire Hathaway Sold $6B Of Airline Stock In April

 

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