Buffett Breaking Promises

Warren Buffett got torched on airline companies in 1989. Temporarily torched, but for a bunch of financial reasons I don’t want to get into here, he felt really dumb for a couple of years.

He swore he’d never go back.

He swore it! He called airlines “profitless or worse” in his ‘92 letter. And that was when he still owned some.

In 1998, when a lucky break made him a ton of money in a short window, he quietly exited his positions and said good riddance.

Never going back. Never, ever, ever, getting back together. Hit the road, Jack.

Then, in 2016, he went back.

A bunch of people asked “why” and were “shocked,” and maybe even “appalled!” But, he had his reasons, and for a while it worked out. The industry had consolidated since his first go, he saw an opportunity, and it worked this time.

For a time.

In 2020, the pandemic hit.

Airlines, again, struggled. Buffett said, “I won’t be selling airline stocks.” He even bought more, in February, and then in March. “Be greedy when others are fearful, and be fearful when others are greedy,” and all that jazz.

The position was worth over $4 billion.

And in May of 2020, he’d sold it all.

Did that make him a liar?

Or is it better that when the facts change, he changed his mind?

Spoiler: it’s the latter. Or at least, I’m telling myself it is.

In politics, it can be flip-flopping, but in business—much like life—it’s how we move forward.

We don’t have all the answers in real time. All we have is best guesses. Our only job is to keep moving everything forward, without ever falling too far behind.