Warren Buffett's Berkshire Hathaway buys $1B of Apple stock

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Comments

  • Reply 21 of 67
    anantksundaramanantksundaram Posts: 19,223member
    msuberly said:
    Berkshire's $1B holding in Apple is #16 on its list of publicly traded holdings, and represents less than .3% of Berkshire's market cap.  Some other perspective: Berkshire added $1.25B of Phillips 66 stock last quarter...where is the headline of that?
    LOL.

    Tepper sold $133M worth in December, and that was equally big -- if not bigger -- news. Didn't see you dismissing those headlines, unless I missed it and you'd like to point me to a link where you did.
    ronnanton zuykov
  • Reply 22 of 67
    TempletonTempleton Posts: 84member
    Now that's coffee....
  • Reply 23 of 67
    runbuhrunbuh Posts: 315member
    For anyone to see Apple as a long-term risk is idiotic.
    When over half the company revenue and profits are tied into one product, people will see risk.
    jackansi
  • Reply 24 of 67
    In the bigger picture, what is interesting to me is that APPL, already in a couple hours of trading, is up BIG. It is classic investment trading - today nobody has done anything! Not Apple, not Berkshire Hathaway, nobody. The only thing that happened was that traders found out what Berkshire Hathaway did while they were selling off their stock in APPL. 
    But today, that makes more difference in the value of the stock than anything Tim Cooke will do in China. 
    Amazing!
    ValueAnalystcalironnanton zuykov
  • Reply 25 of 67
    jonljonl Posts: 210member
    To AppleInsider staff: Please note that it is highly likely that Warren Buffett had nothing to do with the investment decision to buy AAPL. He may have, but the total amount of the purchase is small enough to warrant that either Todd or Ted (one of the managers who Warren hired a few years ago to replace him) were the likely buyers. This is a very important distinction.
    It may be a lot like when Berkshire was in Intel around 2011 or so. That was a PM, not Buffet. Berkshire got out around $27, and $INTC went down to $20 over the next couple of years. So far, it does not seem like the $IBM stake, which Buffet himself talked about from the start, and in retrospect, he was bamboozled by IBM's buyback and promise of $20 EPS by 2018 or whatever the date was. Heh, it might be a plus that Buffet isn't behind it. :lol:
    edited May 2016
  • Reply 26 of 67
    jcdinkinsjcdinkins Posts: 114member
    Told you guys.  When the ridiculous flood of bad news starts to turn that is THE time to buy Apple.  Bought at $89.50 last week (posted on a different thread).  Cook has a different way of handling his business, but he's doing fine.  Berkshire certainly thinks so.
    calibaconstanganton zuykov
  • Reply 27 of 67
    jonljonl Posts: 210member
    sog35 said:
    jonl said:
    It may be a lot like when Berkshire was in Intel around 2011 or so. That was a PM, not Buffet. Berkshire got out around $27, and $INTC went down to $20 over the next couple of years. So far, it does not seem like the $IBM stake, which Buffet himself talked about from the start, and in retrospect, he was bamboozled by IBM's buyback and promise of $20 EPS by 2018 or whatever the date was. Heh, it might be a plus that Buffet isn't behind it. :lol:
    If you think Buffet has a 5 year window for IBM then you are a fool. He's thinking 10-20 years with IBM. Same with Apple.

    Regardless no investor is right 100% of the time, even Buffet.  So bringing up his failures and ignoring DECADES of successes is stupid and dishonest. The dude is averaging about a 20% annualized return over a 30+ year history. No one is even close to touching that.
    We're talking about tech investments here, something Buffet has repeatedly said he doesn't get into, because he doesn't understand tech. Berkshire held $INTC only for around one year, not Buffet's preferred "forever" timeframe; many attributed it to Buffet reasserting control after a PM bought the stock. As for IBM, Buffet repeatedly pumped its buyback and $20 per share target, and he continued long after it became clear to everyone else that it wasn't going to happen. He's just digging in his heels now. He can afford to, and he's hoping that Watson and the other research stuff will pan out, the cloud business will expand, etc, just like everyone else who made the mistake of following him into it.
  • Reply 28 of 67
    jonl said:
    To AppleInsider staff: Please note that it is highly likely that Warren Buffett had nothing to do with the investment decision to buy AAPL. He may have, but the total amount of the purchase is small enough to warrant that either Todd or Ted (one of the managers who Warren hired a few years ago to replace him) were the likely buyers. This is a very important distinction.
    It may be a lot like when Berkshire was in Intel around 2011 or so. That was a PM, not Buffet. Berkshire got out around $27, and $INTC went down to $20 over the next couple of years. So far, it does not seem like the $IBM stake, which Buffet himself talked about from the start, and in retrospect, he was bamboozled by IBM's buyback and promise of $20 EPS by 2018 or whatever the date was. Heh, it might be a plus that Buffet isn't behind it. :lol:
    Haha! I hear ya, but I wouldn't go that far! :smiley: Buffett is still the greatest investor of all times, and he handpicked Todd and Ted, and they more or less follow the same investment strategy. So it is a strong vote of confidence from the value camp. I just wanted to point out that the first sentence of this article (after the headline) is misleading at best, and highly likely to be factually wrong at worst.

    Btw, I wouldn't write off his IBM stake as a bad investment. He hasn't lost much on it as a percentage of his investment, after counting dividends and stock buybacks, and the fat lady hasn't sung on that one yet..
    jackansi
  • Reply 29 of 67
    mj webmj web Posts: 918member
    Thank you Warren! Because AAPL has so stagnated in the marketplace under Tim Cook, it takes good financial news like this, financial engineering like the split and buybacks, or strategic investments like Didi, to keep the stock from tanking.
  • Reply 30 of 67
    volcanvolcan Posts: 1,789member
    sog35 said:
    Go show me a company that is diversified and I'll show you a company that is good at alot of things but great at nothing.
    GE, 3M, Berkshire, DOW, Disney, Nike

    Plenty more diversified companies in the Fortune 500
    edited May 2016
  • Reply 31 of 67
    teejay2012teejay2012 Posts: 275member
    He just made about 30 million today from this announcement. How I wish...
    cali
  • Reply 32 of 67
    He just made about 30 million today from this announcement. How I wish...
    Haha! I hope that you also would be donating the full $30 million to the Bill & Melinda Gates Foundation for the benefit of people in third world countries... ;)
    jackansi
  • Reply 33 of 67
    bkkcanuckbkkcanuck Posts: 854member
    jonl said:
    sog35 said:
    If you think Buffet has a 5 year window for IBM then you are a fool. He's thinking 10-20 years with IBM. Same with Apple.

    Regardless no investor is right 100% of the time, even Buffet.  So bringing up his failures and ignoring DECADES of successes is stupid and dishonest. The dude is averaging about a 20% annualized return over a 30+ year history. No one is even close to touching that.
    We're talking about tech investments here, something Buffet has repeatedly said he doesn't get into, because he doesn't understand tech. Berkshire held $INTC only for around one year, not Buffet's preferred "forever" timeframe; many attributed it to Buffet reasserting control after a PM bought the stock. As for IBM, Buffet repeatedly pumped its buyback and $20 per share target, and he continued long after it became clear to everyone else that it wasn't going to happen. He's just digging in his heels now. He can afford to, and he's hoping that Watson and the other research stuff will pan out, the cloud business will expand, etc, just like everyone else who made the mistake of following him into it.
    I worked as a consultant during the peak of the .com boom and was asked repeatedly why I did not jump to one of the high fliers who I was contracted with -- and my answer was simple.... I could not understand the business of most of those companies.  It was we do this, that and the other thing and then money will magically appear in the future.  I also remember Warren Buffet saying the reason why he did not invest in many of those companies ( and why he was not hurt as badly during the bust) was because he could not understand the business of those companies.  Trillions of dollars went into and down the drain during the bust because there was no concept of where they were going to make money.  There is a vast difference between a lot of tech companies and manufacturers (hardware and software) who are tech companies.   I just keep on coming back to -- what is so hard to understand about a phone manufacturer?  I think (cough cough) even Warren Buffet can understand a company like Apple, Microsoft or Intel....  so the next step is ... does he think that any of those companies are undervalued and have good long-term prospects for growth (in addition to ongoing income)? 

    Do you really think Warren Buffet is so stupid that he can not understand companies like Apple?  Do you think he considers Apple to be this hard to understand business?  The tech industry is littered with lots of companies that are really hard to understand from a business standpoint.... (more are the latter unfortunately -- which is why there is such a larger percent that go under).
    calironn
  • Reply 34 of 67
    jonljonl Posts: 210member
    bkkcanuck said:
    jonl said:
    We're talking about tech investments here, something Buffet has repeatedly said he doesn't get into, because he doesn't understand tech. Berkshire held $INTC only for around one year, not Buffet's preferred "forever" timeframe; many attributed it to Buffet reasserting control after a PM bought the stock. As for IBM, Buffet repeatedly pumped its buyback and $20 per share target, and he continued long after it became clear to everyone else that it wasn't going to happen. He's just digging in his heels now. He can afford to, and he's hoping that Watson and the other research stuff will pan out, the cloud business will expand, etc, just like everyone else who made the mistake of following him into it.
    I worked as a consultant during the peak of the .com boom and was asked repeatedly why I did not jump to one of the high fliers who I was contracted with -- and my answer was simple.... I could not understand the business of most of those companies.  It was we do this, that and the other thing and then money will magically appear in the future.  I also remember Warren Buffet saying the reason why he did not invest in many of those companies ( and why he was not hurt as badly during the bust) was because he could not understand the business of those companies.  Trillions of dollars went into and down the drain during the bust because there was no concept of where they were going to make money.  There is a vast difference between a lot of tech companies and manufacturers (hardware and software) who are tech companies.   I just keep on coming back to -- what is so hard to understand about a phone manufacturer?  I think (cough cough) even Warren Buffet can understand a company like Apple, Microsoft or Intel....  so the next step is ... does he think that any of those companies are undervalued and have good long-term prospects for growth (in addition to ongoing income)? 

    Do you really think Warren Buffet is so stupid that he can not understand companies like Apple?  Do you think he considers Apple to be this hard to understand business?  The tech industry is littered with lots of companies that are really hard to understand from a business standpoint.... (more are the latter unfortunately -- which is why there is such a larger percent that go under).
    I'm talking about what he's said and done. His PMs were behind the short-lived Intel stake, and I would guess they're behind the small Apple stake. I will continue to believe this until Buffet comments on it, as he has done since the beginning with IBM.

    ETA:

    I just read some news.

    Berkshire Bought Apple Stock, But Warren Buffett Didn’t

    "Berkshire revealed an Apple stake worth nearly $1 billion early Monday, as part of Berkshire’s quarterly disclosure of its stock holdings. Mr. Buffett, Berkshire’s chairman and chief executive, confirmed in an email that he was not the one who added the shares to Berkshire’s massive equity portfolio. Mr. Buffett is famously averse to investing in tech companies, and has specifically ruled out investing in Apple before. But in recent years, he has added two former hedge-fund managers,  Todd Combs and Ted Weschler, to Berkshire’s investing team. They’ve shown a willingness to wade into corners of the market that Mr. Buffett himself won’t touch, including the tech sector."

    Based on this quote, the author might have cribbed my first post in this thread.

    "Perhaps fans of Apple and its stock should be glad that this is not Mr. Buffett’s stock pick. The last time Mr. Buffett made a big move into the tech sector, he took a huge stake in International Business Machines It’s been one of Berkshire’s worst performers."

    What did I say 45 minutes before the article came out?

    "So far, it does not seem like the $IBM stake, which Buffet himself talked about from the start, and in retrospect, he was bamboozled by IBM's buyback and promise of $20 EPS by 2018 or whatever the date was. Heh, it might be a plus that Buffet isn't behind it."

    :lol:

    edited May 2016 cali
  • Reply 36 of 67
    bkkcanuck said:
    jonl said:
    We're talking about tech investments here, something Buffet has repeatedly said he doesn't get into, because he doesn't understand tech. Berkshire held $INTC only for around one year, not Buffet's preferred "forever" timeframe; many attributed it to Buffet reasserting control after a PM bought the stock. As for IBM, Buffet repeatedly pumped its buyback and $20 per share target, and he continued long after it became clear to everyone else that it wasn't going to happen. He's just digging in his heels now. He can afford to, and he's hoping that Watson and the other research stuff will pan out, the cloud business will expand, etc, just like everyone else who made the mistake of following him into it.
    I worked as a consultant during the peak of the .com boom and was asked repeatedly why I did not jump to one of the high fliers who I was contracted with -- and my answer was simple.... I could not understand the business of most of those companies.  It was we do this, that and the other thing and then money will magically appear in the future.  I also remember Warren Buffet saying the reason why he did not invest in many of those companies ( and why he was not hurt as badly during the bust) was because he could not understand the business of those companies.  Trillions of dollars went into and down the drain during the bust because there was no concept of where they were going to make money.  There is a vast difference between a lot of tech companies and manufacturers (hardware and software) who are tech companies.   I just keep on coming back to -- what is so hard to understand about a phone manufacturer?  I think (cough cough) even Warren Buffet can understand a company like Apple, Microsoft or Intel....  so the next step is ... does he think that any of those companies are undervalued and have good long-term prospects for growth (in addition to ongoing income)? 

    Do you really think Warren Buffet is so stupid that he can not understand companies like Apple?  Do you think he considers Apple to be this hard to understand business?  The tech industry is littered with lots of companies that are really hard to understand from a business standpoint.... (more are the latter unfortunately -- which is why there is such a larger percent that go under).
    I hate to break this to you, but it's not that Warren Buffett does not understand a tech company's business. It's that he, or anyone really, cannot predict how profitable a tech company will be in 5-10-20 years as well as the business of Coca Cola or Wells Fargo, given that the technology sector is a very fast-changing one. I don't think Jonl is arguing Warren Buffett is stupid or he cannot understand how a tech company makes money. But it is true that predicting the future of the tech sector is exponentially more difficult that a plain old simple industry.
    jackansi
  • Reply 37 of 67

    Called it. But keep in mind that Berkshire Hathaway taking a stake in Apple is still a big vote of confidence. It's just not as big as it would've been if it was Warren Buffett who made the decision and went on CNBC to discuss the future of the company and the low valuation. Nevertheless, this is a strong vote of confidence.
    calijackansi
  • Reply 38 of 67
    msuberlymsuberly Posts: 226member
    msuberly said:
    Berkshire's $1B holding in Apple is #16 on its list of publicly traded holdings, and represents less than .3% of Berkshire's market cap.  Some other perspective: Berkshire added $1.25B of Phillips 66 stock last quarter...where is the headline of that?
    LOL.

    Tepper sold $133M worth in December, and that was equally big -- if not bigger -- news. Didn't see you dismissing those headlines, unless I missed it and you'd like to point me to a link where you did.
    How is the sale of a $133M stake "equally big -- if not bigger -- news?

    Go to this link and see how far down you would have to scroll to see how much sway a $133M stake actually has: https://www.holdingschannel.com/funds/holding-aapl/

    Berkshire's stake doesn't even make the top 50. It's only news because of the chairman's name.

    Now if Vanguard, with its nearly $36B stake sold out...that would be news. 
    cali
  • Reply 39 of 67
    volcanvolcan Posts: 1,789member
    sog35 said:

    GE and Bershire are basically investment companies.

    Nike is mostly shoes. If the shoe market tanks they tank.
    Wrong. GE makes thousands of products in addition to being a financial company. Berkshire owns many manufacturing businesses, railroad, food, jewelry, furniture, energy, insurance, etc. Nike makes everything for sports. It is not just shoes. They make all sorts of sporting apparel and equipment and are widely considered one of the best brands out there. You made a broad unsubstantiated comment and I refuted it. You just don't want to admit that there are many well diversified, great companies.
    edited May 2016 singularity
  • Reply 40 of 67
    yuck9yuck9 Posts: 69member
    lkrupp said:
    If the Oracle of Omaha thinks Apple has a future then believe it.
    Buffett himself did not buy it.

    http://www.cnbc.com/2016/05/16/buffetts-berkshire-hathaway-takes-new-stake-in-apple.html
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