A few days after the decision to sell $ 800 million of AAPL shares, the Wall Street Journal published an interesting report on why Apple is an “elephant” among the companies that Warren Buffett has invested in.
$ 800 million is an insignificant amount compared to the amount of shares in Warren Buffett’s Berkshire Hathaway, given that we are talking about a total value that exceeds $ 79 billion. The sale was made only to recover money to invest in two other companies, and not for negative hints towards Apple and its future.
As the Wall Street Journal explains, in fact, the value of the AAPL shares held by Berkshire Hathaway has more than doubled since the first major investment was made in 2016. In total, Warren Buffett’s company has invested $ 36 billion in Apple stocks, which are valued at around $ 79 billion today. This means that Apple represents 14% of Berkshire’s market capitalization, which is “more than any other single stock in its portfolio“.
For this reason, even the shareholders of Berkshire are convinced that “Apple is certainly an elephant for Mr. Buffett, and will continue to be so in the future“.
The report details how Buffett’s investment strategy has changed over the years. Initially, Buffett invested in companies that sold below their value. He then went on to purchase “well managed companies“With competitive advantages:
Mr. Buffett, Berkshire’s president and chief executive officer, spent his first years of investment trying to buy “cigar butts” or companies that sold below their value, so much so that an investment would likely have been profitable, regardless of performance. company. Subsequently, he began to focus on purchasing well-managed companies with strong competitive advantages at reasonable prices.
Buffett started studying Apple in early 2016, when you purchased a $ 1 billion stake in the company:
While studying the company and asking his great-grandchildren what this loyalty to the Apple brand and products was, Buffett decided that Apple was a retail company that could make a lot of money. This was a big change in the strategies usually used by Buffett. In general, he had always avoided technology companies because he found it hard to understand them.
And the future will increasingly be Apple’s, even for him.