For many years now, Apple has made good on its history-making buyback program, investing more than $573 billion on share repurchases since 2012. In its most recent quarter, Apple invested another $18 billion on buybacks, which have benefited Warren Buffett’s bottom line for Berkshire Hathaway.
Alexandra Garfinkle for Yahoo Finance:
“At Apple and Amex, repurchases increased Berkshire’s ownership a bit without any cost to us,” Buffett wrote in Berkshire’s annual shareholders letter this year. “The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up. Every small bit helps if repurchases are made at value-accretive prices. Just as surely, when a company overpays for repurchases, the continuing shareholders lose.”
A staggering 46% of Buffett’s portfolio is concentrated in Apple stock, which Buffett’s Berkshire first bought in 2016.
Buffett even penned a fervent defense of buybacks in his annual letter.
“When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive),” he wrote.
MacDailyNews Note: In May, Apple’s board of directors authorized an additional buyback program to repurchase up to $90 billion of the company’s common stock (AAPL).
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“When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive),” he wrote.
Mr. Buffett, I get your condescending scolding toward people that don’t understand the markets like you do.
But still, you do not explain how stock buybacks benefit Apple the company and individual investors like me.
How it benefits you personally, could not care less.
Crickets?…
Apple’s buybacks benefit every AAPL investor by taking millions of shares off the table, making every share held more valuable.
OK, thanks…
Huh? Sorry whut? When Apple buys back its stock and you are a shareholder the value of what you own increases. As long as the company did not have a more beneficial choice of where to spend that money such as investing in new equipment, or paying off high interest debt you win. What critical information is Mr. Buffett withholding from you? Let me guess you’d rather have a dividend…(shakes head slowly side to side)…on that point Mr. Buffett has written two books explaining why (and when) he thinks thats a bad idea. Read the books.
LOL!! This recent destruction of Apple share’s absolutely annihilated an value Apple’s buy backs have. Sure, the buy backs over time drove up the share price by reducing supply. Doesn’t matter. The market completely destroyed Apple since the earnings release. All that value, GONE.
If Apple had given out dividends to the long term share holders, all those dividends would still remain today. The market cannot take away dividends.
FIRE Tim Cook!
Fire Tim Cook. I’m fine with that sentiment, as he’s a terminally boring sanctimonious hypocrite who abuses the Apple brand for his own bad, and actually racist, politics, but Apple’s share price right now is clearly not “absolutely annihilated.”
AAPL now: $178.86
AAPL 1/5/23: $124.76
Apple shares are up $54.10 in the last 8 months.
That word annihilated, you keep using it. I don’t think it means what you think it means.
Buybacks were once illegal…for a reason. It’s a process that does little but to financialize a market/an economy that’s already greatly financialized. The business’ share price gains w/o ANY productivity gain. The US once had a powerful manufacturing sector…it held the greatest % of GDP. In the 70’s, the greatest portion had shifted to the financial sector…it remains so today. People with money lathering and being lathered in the $$ club. Cantillon Effect in spades. It’s one concrete reason financial disparities abound. Crony Capitalism epitomized.
We get it. You finally learned about a Cantillon effect at whatever communist college you’re wasting your (or, likely, taxpayers’) money attending.
Cantillon’s analysis is based entirely on a gold standard, not central bank fiat money. Also, contrary to Cantillon’s confused view, wealth is not zero-sum game. Wealth is not a fixed pie. Wealth can be, and is, created every second of the day.
Rich people are not “taking” from the poor to amass and grow their wealth. Those not creating or growing their wealth are too stupid, too lazy, and/or too unlucky to do so. Half the people you meet are, by definition, below average intelligence. Hence, many of them are poor.
Now, STFU, commie.
Well said sir, well said! Only point I would add that I think does matter is it’s not actually that “harsh”. Some folks are “too stupid” and some “too lazy” but for most they just don’t care about financial wealth. They find “wealth” to be living where they want, or want ‘low stress” jobs, or like low “responsibility” pursuits. They decide not to pursue wealth (I am not one of those) but it is absolutely a decision and one of the benefits of living in a free society. You can have what you are willing to work for or not.