Warren Buffett's comments at his annual Berkshire Hathaway (BRK.A  ) meeting are closely watched for several reasons. For one, he is a fountain of investing knowledge which is proved by decades of outperformance and his standing as one of the wealthiest men in the world. Second, he tends to have a great deal of insight into the economy due to his businesses and investments that span many different parts of the economy. Finally, he has a knack for knowing when it's time to put money to work.

This year, his remarks were even more anticipated as there's a huge amount of uncertainty about the economic outlook. On one hand, the stock market seems pretty sanguine and seems to be projecting a V-shaped recovery. In contrast, economic indicators are pointing to a much rougher ahead and more of a U-shaped recovery.

Buffett's Bearish Tone

While Buffett tends to be generally optimistic about the state of the economy and his holdings, he was much more cautious at this weekend's meeting. Most notably, he nor his primary money managers, Todd Combs and Ted Wechsler put any money to work despite the steep drop in March. He said that they're not buying stocks, as it's still early in the crisis. Additionally, he doesn't believe that valuations have reached attractive levels.

Airlines

Buffett also revealed that he had completely exited his positions in the airline stocks which included Delta Airlines (DAL  ), United Airlines (UAL  ), Southwest Airlines (LUV  ), and American Airlines (AAL  ) for a 65% loss. Buffett's thesis for going long the airlines was that capacity was constrained, management teams had improved, and demand was strong and growing. Due to the coronavirus, he remarked that "the world had changed". Buffett has notoriously been skeptical about airlines as an investment in the past.

Praise for the Fed

Buffett was effusive in his praise for Federal Reserve Chairman Jerome Powell given his early and aggressive intervention in financial markets. On the expansion of the Fed balance sheet, Buffett said that there would likely be some cost to it that is unclear at the moment, but the alternative of letting the economy seize up would be worse.

During the depths of the Great Recession in 2008, Buffett was aggressive in deploying cash and lending to companies. This time, Buffett hasn't lent any money due to the Fed's actions. Buffett said that this is a great time to borrow money but not a good time to lend money.

Conclusion

Buffett did reiterate his belief and optimism in America in the long-term. He said that the country has survived worse situations including the Civil War and World War 2 and that he expects the country to continue growing once this crisis passes as well.

Currently, Berkshire is long about $180 billion in public equities and has about $150 billion in cash. Its top equity positions are Apple (AAPL  ), Wells Fargo (WFC  ), American Express (AXP  ), Bank of America (BAC  ), and Coca-Cola (KO  ).