Savvy Investors Ignore ‘Once Upon a Time’ Warren Buffet and Buy Airlines


Savvy investors in ETFs are brushing off Berkshire’s Warren Buffett’s warnings on the airline industry.

US Global Jets ETF, ticker JETS, has seen 44 days of inflows totaling $632-M so far. The cash streak extended even after Mr. Buffett said Berkshire Hathaway exited its positions in airlines, cautioning that the prospects have changed as a result of the C-19 coronavirus outbreak.

Traders eager to capture a rebound in airline stocks are driving flows into JETS according to the data. Mr. Buffett abandoned his bet on the 4 major US airlines, which are JETS Top holdings, the ETF has 34 positions in total, spreading the risk.

The sector has sold off dramatically, so by buying the ETF, it mitigates the risk from owning any single airline company.

Mr. Buffett’s grim outlook for the industry did little to deter individual investors.

The number of users at retail trading platform Robinhood who are holding JETS surged to more than 19,000 so far this week, according to Robintrack. That compares to 500 at the beginning of March.

JETS has dropped about 55% YTD, with the bulk of losses coming in late February once lockdown measures took effect around the world in an effort to contain the spread of the disease.

Demand to bet against JETS remains muted the short position is about 2% in here.

JETS is very oversold in here, our outlook remains neutral with a bearish bias in here. The Key resistance is 14.44 and the support is at 12.23. Looking for a breakout move at 16.82.

Have a healthy day, Keep the Faith!