“Warren Buffett’s name makes regular appearances in the pages of Barron’s, but our weekly Tech Trader column tends to be a Buffett-free zone,” Alexander Eule writes for Barron’s. “That’s no disrespect to the Oracle of Omaha. Buffett, of course, has famously avoided technology during his long run of success, preferring businesses he can easily understand. The exception, a few years back, was an $11 billion bet on International Business Machines, which hasn’t exactly panned out.”
“Last week, Buffett’s Berkshire Hathaway made another exception, disclosing a $900 million position in Apple,” Eule writes. “Apple investors, looking for any glimmer of hope these days, bid the stock up 3.7% on the news. Apple finished the week up 5.2%, at $95.22, still 28% off its 2015 high.”
“For an investor seeking a simple business, Berkshire’s Apple buy comes at a curious time,” Eule writes. “Financially speaking, Apple faces an array of decisions, thanks to its swelling balance sheet. Dividend payments came to $11.6 billion last year on top of $36 billion for buybacks, swamping its record-high $8.1 billion spent on research and development. Tim Cook’s job is vastly more complicated than Steve Jobs’ ever was. Investors, in trying to evaluate the stock, face a similar dilemma.”
Read more in the full article here.
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