Warren Buffett reduced stake in Apple at end of 2018

Posted:
in AAPL Investors edited February 14
Legendary investor Warren Buffett reduced his position in Apple to 249.6 million shares as of Dec. 31, with the reporting period ending just days before the tech giant announced it would miss first quarter revenue guidance due to sluggish iPhone sales.




The "Oracle of Omaha" divulged the figure in a Schedule 13-F issued to the U.S. Securities and Exchange Commission on Thursday. A separate 13-G, mandatory for parties who own more than 5 percent of a public company's outstanding stock, notes Buffett's Berkshire Hathaway holds shared voting power in Apple amounting to 255,300,329 shares, with the number including investments made on behalf of insurance companies represented by the investor.

Today's filing reveals Buffett decreased his stake in Apple by just under 3 million shares since the last reporting period in September 2018. At the time, the investor had just boosted his position by 522,802 shares of common stock to end the third quarter with 252,478,779 shares.

In an interview last year, Buffett explained why Apple remains a good investment despite market reports that suggested a dip in iPhone demand. Those predictions were rendered accurate, as Apple lowered revenue estimates for its first fiscal quarter of 2019 on the back of a slowdown in Chinese iPhone sales.

"I do not focus on the sales in the next quarter or the next year," Buffett said of iPhone in August of 2018. "I focus on the -- they won't tell you exactly how many -- but hundreds and hundreds and hundreds of millions of people who practically live their lives by it. And if you look at that little...piece of whatever it is, it's some the most valuable real estate in the world."

Apple revenue ultimately fell within the revised forecast at $84.3 billion. Revenue from iPhone came in at $52 billion, down 15 percent year-over-year.

Berkshire first bought into Apple in 2016 with a share purchase worth about $1 billion, a figure that was extended to 57.4 million shares at the end of 2016. That stake increased to 133 million shares a quarter later and has since swelled to the 249.6 million shares reported today.

Comments

  • Reply 1 of 20

    It's true!   : )   Every time my AAPL stock goes down, I think... 'Well, Warren Buffett is hurting worse.'

    But you know what? A wise and rich investor advised me many years ago: "The stock market goes up... and it goes down. What you need to do... is to invest in companies that you think are well-run, make quality products, and you have a 'good feeling' about." 

    Pretty simple.

    For me, as a long-time (since 1985) Apple-user, I know Apple to be such a company. I think Steve chose well with Tim... and I'm still in. 

    Are there things that I'm disappointed with... regarding some Apple products? Of course. But the alternatives are worse, IMHO. 

    Donald's sanctions are hurting AAPL, mostly with regard to China... but it's not forever. Hang in there, Warren!

    edited February 14 montrosemacslkruppbadmonkjony0
  • Reply 2 of 20
    ThrashmanThrashman Posts: 14unconfirmed, member
    Very surprising.  
    Why sell? Why sell such a small amount? (Compared to his entire holding).
  • Reply 3 of 20
    Thrashman said:
    Very surprising.  
    Why sell? Why sell such a small amount? (Compared to his entire holding).
    He was likely moving money to another investment opportunity that was showing some promise. 
    Dave Kapjony0
  • Reply 4 of 20
    AppleInsider said:...

    The "Oracle of Omaha" divulged the figure in a Schedule 13-F issued to the U.S. Securities and Exchange Commission on Thursday. A separate 13-G, mandatory for parties who own more than 5 percent of a public company's outstanding stock, notes Buffett's Berkshire Hathaway holds shared voting power in Apple amounting to 255,300,329 shares, with the number including investments made on behalf of insurance companies represented by the investor.

    ...
    Those extra 5.7 million shares (reported on the 13G but not on the 13F) get reported on New England Asset Managment's 13F.

    For those who don't know the difference, the institutional investment manager report (the 13F) covers equities owned directly. The 5% ownership report (the 13G) covers equities beneficially owned. Those might include shares that are in someone else's name, but which the filer has control over - e.g., they can vote them or decide to sell them. Also, the 13F gets filed each quarter, within 45 days of the end of the quarter, whereas the 13G gets filed annually by February 15th.


    edited February 14 jony0
  • Reply 5 of 20
    Thrashman said:
    Very surprising.  
    Why sell? Why sell such a small amount? (Compared to his entire holding).
    Who knows? But most of the 3 million or so shares of AAPL which were sold were from a block for which Mr. Buffett was the only listed institutional manager. So they weren't held, e.g., through a Berkshire subsidiary.

    It will be interesting to see what happens this quarter. With AAPL shares having fallen as far as they did in January, did Mr. Buffett decide to add significantly to his position?
    flydog78Banditjony0
  • Reply 6 of 20
    tjwolftjwolf Posts: 278member
    Oh, come on! That's gotta be trading on insider information! Why would a firm such as Berkshire & a man like Buffett keep accumulating - even in the quarter before - and then sell 5 million shares just days before the earnings miss announcement? I don't buy the argument that Buffett probably just needed money for another investment opportunity (although I do wonder where that $1b went?) Buffett famously paints himself as an investor, not a 'mere' speculator who makes his money playing the ups and downs of the market.
  • Reply 7 of 20
    This makes sense.   Apple hasn't changed, but it's market has:
    For the past 10 years Apple has been a growth story based almost entirely on the iPhone.   But, the smart phone market is changing:   Not only has the market reached saturation (where everybody who wants one already has one) but the technology has reached functional limits where a faster processor doesn't change the user experience in a meaningful way.

    Previously Apple was tapping into an expanding market with rapidly evolving technology.  Now it is accessing a stagnant / replacement based market and one where technical advances are less likely to spark an update response.

    And no, that is NOT to trash Apple.  Apple hasn't changed -- they're still the same company.   But, their primary market has.  As a result, the company is hitting the pause button for awhile till the next big technical revolution.  Meanwhile Apple will continue consolidating their gains.
    kestral
  • Reply 8 of 20
    tjwolf said:
    Oh, come on! That's gotta be trading on insider information! Why would a firm such as Berkshire & a man like Buffett keep accumulating - even in the quarter before - and then sell 5 million shares just days before the earnings miss announcement? I don't buy the argument that Buffett probably just needed money for another investment opportunity (although I do wonder where that $1b went?) Buffett famously paints himself as an investor, not a 'mere' speculator who makes his money playing the ups and downs of the market.
    First, it wasn't 5 millions shares, it was "just under 3 million shares" if you had read the article.

    If you had read the article you'd also know that Buffett holds "voting power" over the reported shares, and they include "investments made on behalf of insurance companies represented by the investor," and are not his personal shares.  Buffett owns roughly 37% of BH

    3 million shares is 1% of the total investment, and therefore 1/3 of a percent Buffett's overall net worth.  A 20% drop in the stock price would be  equivalent to a rounding error in his net worth.  So your allegation is that he is smart enough to sell based on "insider information," but not smart enough to sell enough to really make a difference in his life. 

    Finally, to answer your question of where "$1b went" (actually a little over half a billion), https://www.barrons.com/articles/nvidia-stock-earnings-sales-guidance-51550183166





    GeorgeBMac
  • Reply 9 of 20

    Thrashman said:
    Very surprising.  
    Why sell? Why sell such a small amount? (Compared to his entire holding).
    Mutual funds, investors, etc buy and sell to rebalance holdings. Nothing new or unusual here. 
    lolliver
  • Reply 10 of 20

    Legendary investor Warren Buffett reduced his position in Apple to 249.6 million shares as of Dec. 3
    This really should be corrected as it is factually incorrect. 
    jbarandominternetperson
  • Reply 11 of 20
    https://www.cnbc.com/2019/02/14/reuters-america-update-2-berkshire-trims-apple-stake-adds-suncor-and-red-hat-exits-oracle.html

    "One of the managers other than Warren had a position in Apple and sold part of it in order to make an unrelated purchase," Buffett's assistant Debbie Bosanek said in an email. "None of the shares under Warren's direction have ever been sold."


    tmayjba
  • Reply 12 of 20
    Buffet has been wrong in the past. General Electric comes to mind.

  • Reply 13 of 20
    TSSTSS Posts: 1member
    Those articles about "Warren Buffet Reduced Stake in Apple" turn out to be misleading.. https://www.ped30.com/2019/02/15/warren-buffett-apple/
    jba
  • Reply 14 of 20
    Warren Buffet has never sold any Apple Stock.  The stock was sold by a manager to use the funds to buy another position.  Do your research better.
    jba
  • Reply 15 of 20
    flydog said:

    Legendary investor Warren Buffett reduced his position in Apple to 249.6 million shares as of Dec. 3
    This really should be corrected as it is factually incorrect. 
    Yeah, but that's how people often refer to things which are done by Berkshire Hathaway. In some contexts, and in common parlance, Mr. Buffett did something is synonymous with Berkshire Hathaway did something.

    That said, if we want to be technical, with regard to the vast majority of the almost 3 million AAPL shares which were sold, Mr. Buffett is listed as the institutional investment manager. It wasn't Berkshire Hathaway or a subsidiary thereof, it was Warren Buffett himself. Even though someone else might have made the decision to sell those shares, he's the one whose ownership position was reported as having been reduced.

    To be thorough, a small number of the shares sold were from a batch for which Mr. Buffett and National Indemnity Co are both listed as the institutional investment manager. But even without counting those shares, it's still fair to say that nearly 3 million AAPL shares were sold - with Mr. Buffett being the referenced manager.
  • Reply 16 of 20
    maestro64maestro64 Posts: 4,599member
    insider trading, they timed that almost perfectly, it was it is high and then apple made its announcement.

    But Warren will be getting a check for a $193M this month for his apple Dividends. Imaging making $193M ever quarter, Apple is generating $500M per year for him.
  • Reply 17 of 20
    tjwolf said:
    Oh, come on! That's gotta be trading on insider information! Why would a firm such as Berkshire & a man like Buffett keep accumulating - even in the quarter before - and then sell 5 million shares just days before the earnings miss announcement? I don't buy the argument that Buffett probably just needed money for another investment opportunity (although I do wonder where that $1b went?) Buffett famously paints himself as an investor, not a 'mere' speculator who makes his money playing the ups and downs of the market.
    What utter nonsense.

    First, people don't buy all the shares all at once at the same price. They buy over time, at different prices. It is quite likely that he sold AAPL that he had bought at the lowest possible price (he started when AAPL was around $100, IIRC), and he likely sold that lot at a nice profit. He may have needed it to pay taxes, for liquidity, or to buy something else.

    Second, to call Buffett a "speculator" or accuse him of using "inside information" is to reveal ignorance. There is plenty that you can look up, about who he is, what he's achieved, and how he operates. The information is out there if you want to educate yourself.

    Third, his sale amounts to somewhere between 1% and 2% of his holdings of AAPL. A rounding error, rather than "...playing the ups and downs of the market."

    Delete your silly post.
  • Reply 18 of 20
    ThrashmanThrashman Posts: 14unconfirmed, member

    Motley Fool article below - feb 15th 

    ...........................

    Did Buffett actually hit the sell button? 

    The morning after the 13-F was released, we got a little more clarity on what happened with the transaction. In an email to Reuters, Warren Buffett's assistant Debbie Bosanek said that Buffett wasn't the one who sold the shares. "One of the managers other than Warren had a position in Apple and sold part of it in order to make an unrelated purchase," she said.  

    Bosanek also clarified that "none of the shares under Warren's direction have ever been sold." 

    randominternetperson
  • Reply 20 of 20
    No more BillionairesNo more Billionaires Posts: 1unconfirmed, member
    The most interesting part of the article "just days before the tech giant announced it would miss first quarter revenue guidance due to sluggish iPhone sales. " Hmmm. Insider trading? Apple giving preferential treatment to large investors?
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