Warren Buffett’s investment in Apple stock has in recent years become far and away the most prominent holding in Berkshire Hathaway’s $360 billion equity portfolio.
Josh Schafer for Yahoo Finance:
Berkshire first bought the stock in 2016, and since then Apple has grown to a $110 billion position comprising roughly 40% of Berkshire’s stock holdings. Berkshire owns just under 6% of Apple.
The rapid growth has positioned the largest US public company as a fixture in Berkshire Hathaway’s annual shareholder letters and Buffett’s comments during annual meetings.
At Berkshire’s annual shareholders meeting on Saturday, investors will eagerly await what Buffett might say about his largest holding and its new forays into augmented reality headsets, in-house computer chip creation, and expansion in India.
Today, Berkshire owns about 5.8% of the company.
MacDailyNews Take: Just 40%?
As we wrote earlier this month:
Those who have iron stomachs in the face of risk, year after year, can make millions of dollars with relatively very little invested, if they go “all in” on the right company long term.
Diversification is protection against ignorance. It makes little sense if you know what you are doing. – Warren Buffett
On December 20, 1996, when Apple announced the acquisition of NeXT and the return of Steve Jobs, an Apple share sold for 18-cents.*
As recently as April 2003, Apple shares sold for 20-cents each.* Even on January 07, 2019, Apple closed at just $35.64*!
Anyone who invested in AAPL, even in later years, without the loss-making hedges in the name of diversification, sports an incredibly better annualized return than “legendary investor” Peter Lynch’s 29.2% (which is rather laughably weak when viewed by long-term, mainly AAPL investors).
The actual “legendary investors” would be those who began buying AAPL upon the return of Steve Jobs, never stopped buying AAPL year after year, reinvested dividends in AAPL every quarter, never wasted money on diversification in the name of mitigating risk (which also, in the absence of investing perfection (which does not exist), mitigates profit), but who instead went all in on AAPL and never sold a share.
*Prices adjusted for splits and dividend distributions.
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The few times I’ve sold AAPL have been bad choices, the stock always rose shortly thereafter. The hardest part is being patient during quarters-long stagnation and backtracking that leads you to believe the stock isn’t going anywhere, then it’s suddenly up 20-30% in a few weeks. I don’t intend to sit on it forever but at this point I won’t sell until it’s an emergency or I’m buying real estate.
Whereas I refinanced my home, took the cash, and bought AAPL. That was less than 13 months ago, when rates were lower but showed signs of rising. My house has continued to appreciate, but the value of those new AAPL shares have done well also, and I did not worry through the rest of 2022. I can sell those shares quickly any time I want at basically no cost, but it takes much time and a lot of commissions and fees to extract value from real estate that I’m not ready to sell. Higher mortgage payment, sure, but I look at it as financing (at less than 4%) the acquisition of more shares I couldn’t otherwise buy. Short term, that strategy has paid off. I expect it will pay off even more over the next 3-5 years. Either one or both could go up or down, of course, but in these uncertain times, I’ve decided that I trust in AAPL’s future more than my local real estate market’s future (which still has a positive outlook). I don’t think l’m the only one.