“Warren Buffett’s Berkshire Hathaway sharply increased its bet on Apple Inc. during the second quarter, bringing its stake in the iPhone maker to roughly $1.5 billion,” Tess Stynes reports for The Wall Street Journal.
“Berkshire disclosed in May that it had made a $1 billion bet on Apple stock,” Stynes reports. “Apple’s stock has since advanced more than 20% in the past three months.”
“Berkshire added 5.42 million Apple shares to its position in the second quarter, bringing the firm’s total stake to 15.2 million shares, worth $1.46 billion at the end of the period,” Stynes reports. “Berkshire’s first big step into the tech sector was in 2011, when the company disclosed a stake in International Business Machines valued at more than $10 billion, which has since been expanded. During the second quarter, Berkshire left its IBM stake unchanged.”
Read more in the full article here.
MacDailyNews Take: Well, now, there’s a nice little vote of confidence.
SEE ALSO:
Apple: Is a surprise coming? – August 16, 2016
I’m sure he made a nice profit but Icahn seems to have made the wrong call.
Buffett has said many times that he doesn’t understand technology companies and that he won’t invest in anything he doesn’t understand.
This leads me to ponder what he knows now that he did not know before. Certainly, anyone who looked and AAPL fundamentals could see that the stock was grossly undervalued. But I don’t think that would have been enough to convince Buffett to buy shares. I’m thinking that his connections on The Street indicated to him that sentiment was about to shift and that many institutions were about to increase their AAPL portfolio.
Warren Buffett may not understand technology, but he certainly knows a “moat” when he sees one !
Also, perhaps now he has “younger” workers — say, in their 60s, for example — on staff who _do_ get technology and reassure him it is a good long-term investment.
Plus, he has probably figured out that you do not need to be a technologist, or tech genius, to make good returns on Apple. I would be surprised if Apple’s stellar returns over the past decade did not make him regret not buying in earlier.
Anyone who bought Apple shares around 2003, for example, saw that investment outstrip even the returns of Berkshire Hathaway over the same period.
Welcome to the party, Warren. It is about time.