- Dave Portnoy, the founder of Barstool Sports and the face of the day-trading boom says Warren Buffett is "past his prime" and "misjudged Americans' desire to fly" when he ditched airline stocks earlier this year.
- Speaking exclusively to Business Insider, Portnoy explained his rationale for criticizing the legendary investor on numerous occasions in recent weeks.
- "Warren Buffet is past his prime. He misread the market dramatically when he said get out of airlines."
- In recent weeks, Portnoy has become the poster child of a surge in day-trading that has helped push markets to record highs, and led some to speculate that the next great bubble may be inflating in markets.
- Visit Business Insider's homepage for more stories.
Dave Portnoy, the founder of Barstool Sports and the face of America's day-trading boom, says Warren Buffett "misjudged Americans' desire to fly," when he made his now-famous decision to sell his airline stocks earlier this year.
In recent weeks, Portnoy has become the poster child of a surge in day-trading that has helped push markets to record highs, and led some to speculate that the next great bubble may be inflating in markets.
Portnoy has gained widespread attention for his aggressive style and bombastic videos under the nickname "Davey Day Trader."
In an exclusive interview with Business Insider, Portnoy once again rounded on Buffett, probably the most-famous investor in history, and questioned his much debated decision to ditch airline stocks during the market's coronavirus-driven selloff.
"I think he misjudged the bottom," Portnoy said.
"I mean, he basically, when he announced that he was getting out of airlines, that was pretty much rock bottom for that industry. I don't know, what are they up 200% or something like that since he said they were getting out."
"Warren Buffet is past his prime. He misread the market dramatically when he said get out of airlines."
Airlines have been one of the hardest hit sectors since the coronavirus began, with commercial air travel practically stopping altogether during the US economy's lockdown period.
On April 14, during the heart of the lockdown, the TSA registered under 90,000 passengers travelling through US airports, a fall of more than 96% from the previous year.
The sector took another hit when Buffett revealed in May that his Berkshire Hathaway conglomerate had dumped its stakes in the so-called "Big 4" US airlines: American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines.
Airline stocks also tanked on June 11 during the Dow's worst sell-off since coronavirus lockdowns kicked in in March.
United Airlines, Delta Airlines, American Airlines and Southwest Airlines tanked that day losing between 8% and 16% after a statement by the International Air Transport Association that 2020 is likely to go down as "the worst year in the history of aviation."
Even after those losses, Portnoy pointed out, airline stocks are still well above their lows from earlier in the year, while acknowledging that airline earnings are likely to be dire for 2020 as travel demand recovers only slowly.
Lower airline earnings are priced in
"I expect the earnings for the airlines, just like for the [cruises] to be way off, but I mean, that's priced in and when you say Buffett's going to be right, that would mean that they'd have to have not just go down, they would have to massively go down."
"So we would have to retest and surpass the all-time lows of the stock market for him [Buffett] to be right.
"I could be wrong for the next month and still be right," he said.
He said he expects to hold on to cruises and airline stocks despite their expected lower earnings.
"The airlines I've been holding for a while. I am not really day-trading the airlines, I bought them. I'm holding them eventually, they're going to have earnings. I know that's coming, but I'll just hold them right through.
"And I don't expect them to have good earnings. I mean, how could they?" But I don't think that matters," he said.
Portnoy has rounded on Buffett frequently since taking to day-trading, and on June 9 uploaded a video claiming he "killed" Buffett with his recent day-trading success, and describing him as "washed up."
"I'm sure Warren Buffett is a great guy but when it comes to stocks he's washed up. I'm the captain now," Portnoy wrote at the time.
Markets have been divided whether to applaud the "Oracle of Omaha" for selling his airline stocks or whether to regard it as a mistake.
US President Donald Trump said Buffett made a mistake when he sold his airline stocks in April. Billionaire investor Ken Fisher suggested the 89-year-old's age might explain why he didn't go on a buying spree during the coronavirus sell-off.
CNBC "Mad Money" host Jim Cramer, however, thinks markets are in for a bruising because "everyone thinks they are smarter" than Buffett right now.
Portnoy also said during his conversation with Business Insider that he sees cruise lines like Carnival and Norwegian as being sound investments because of similar reasons to airlines — that he believes demand will bounce back sharply.
"Cruises are a good buy ... they are the same philosophy," Portnoy said.
"They are not nearly the opportunity they were a month ago but there is still a decent amount of upside," he concluded.
Carnival the world's largest cruise operator posted a net loss of $4.4 billion last week. It's share price is down 62% from the start of the year and one one money manager warned that it is due for a fresh plunge.
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