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Berkshire Hathaway More Than Doubled its Stake in Apple in January

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In an interview with CNBC today, billionaire investor Warren Buffett revealed that his holding company Berkshire Hathaway held around 133 million shares in Apple prior to the company's record-breaking earnings results on January 31.


Berkshire Hathaway disclosed that it held 57.3 million shares in Apple as of December 31, 2016, so it more than doubled its stake in the iPhone maker in January. The holding, which reflects about 2.5% of Apple's outstanding shares, is worth over $17 billion if the shares are still held today.

Berkshire Hathaway disclosed a nearly $1 billion stake in Apple last May, which led the iPhone maker's stock to soar 9% once the investment became public knowledge. Apple stock has been on the rise since then, closing at an all-time high of $137.11 last week just nine months after setting a 52-week low of $89.47 in May 2016.

Article Link: Berkshire Hathaway More Than Doubled its Stake in Apple in January
 

djcerla

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Apr 23, 2015
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The holding, which reflects about 2.5% of Apple's outstanding shares

this is absolutely bonkers: AAPL is now Buffett's second holding after Coca-Cola. Excellent news for the stock.

Buffett also praised Tim Cook, and rightly so. 2017 will be an amazing year for Apple and AAPL.
 

Carnegie

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May 24, 2012
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The holding, which reflects about 2.5% of Apple's outstanding shares

this is absolutely bonkers: AAPL is now Buffett's second holding after Coca-Cola. Excellent news for the stock.

Buffett also praised Tim Cook, and rightly so. 2017 will be an amazing year for Apple and AAPL.

Unless Berkshire increased its holdings in Coca-Cola in January (which seems unlikely as it hasn't increased its Coca-Cola holdings in decades), its Apple holdings now exceed its Coca-Cola holdings.
 

djcerla

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Unless Berkshire increased its holdings in Coca-Cola in January (which seems unlikely as it hasn't increased its Coca-Cola holdings in decades), its Apple holdings now exceed its Coca-Cola holdings.

I took CNBC guest's words at face value. If that's the case, then wow.
 

Carnegie

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May 24, 2012
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I took CNBC guest's words at face value. If that's the case, then wow.

Understood. Berkshire has held 400 million shares (split-adjusted) of KO for a long time. It's currently trading at less than $42, so that's less than $17 billion worth of Coca-Cola. If Berkshire now holds 133 million shares of AAPL (which is what Mr. Buffett indicated this morning), at around $137 that's more than $18 billion worth.
[doublepost=1488208016][/doublepost]To add a little more to what Mr. Buffett said about Apple this morning...

He indicated that Berkshire wasn't currently buying AAPL, that it hadn't bought AAPL since the earnings report. He also indicated that it was at a different price now than he would buy it at.

Also, for those that have suggested it wasn't Mr. Buffett deciding to buy AAPL: We got considerable clarity on that front this morning. Mr. Buffett said that one of those other guys (Todd Combs or Ted Weschler, he wouldn't say which one) had bought 10 million shares of AAPL and Mr. Buffett has now bought 123 million shares of AAPL. That's Mr. Buffett's own characterization of the situation.

Perhaps the funniest thing Mr. Buffett had to say came in response to Becky Quick asking which company Mr. Buffett would bet on going to a $1 Trillion market cap first - Berkshire or Apple. Mr. Buffett said Apple and then proceeded to jokingly say (I'm paraphrasing a bit)... If Tim wants to swap straight up, I've got an 800 number for him. In other words, he'd swap Berkshire Hathaway straight up for Apple if he had that option.
 
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niun

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Wake me when they hit $700
That'll be very early retirement money :)
 

EdT

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Warren Buffett started in the same fashion as you: with nothing.

Warren Buffet's dad was was a US Congressman in the late 1940s. I doubt that Warren started with "nothing". His parents definitely weren't billionaires and probably weren't millionaires but they were upper middle class. Warren started his invest company by selling (initially) to family and friends and I'm sure he had the funds to buy most any stock he thought was a good buy.

I don't want to downplay his accomplishments but this was more a middle class to riches than a rag to riches story.

And yes, he made more money than I have by the time he was my current age.
 
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Relentless Power

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Warren Buffett started in the same fashion as you: with nothing.

But yet, he started with beyond something else besides "Nothing." He started with will power and a forward thinking Attitude. Anyone can start with nothing, it's what you make of the situation you start with.
 

IJ Reilly

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To add a little more to what Mr. Buffett said about Apple this morning...

He indicated that Berkshire wasn't currently buying AAPL, that it hadn't bought AAPL since the earnings report. He also indicated that it was at a different price now than he would buy it at.

Also, for those that have suggested it wasn't Mr. Buffett deciding to buy AAPL: We got considerable clarity on that front this morning. Mr. Buffett said that one of those other guys (Todd Combs or Ted Weschler, he wouldn't say which one) had bought 10 million shares of APPL and Mr. Buffett has now bought 123 million shares of AAPL. That's Mr. Buffett's own characterization of the situation.

Perhaps the funniest thing Mr. Buffett had to say came in response to Becky Quick asking which company Mr. Buffett would bet on going to a $1 Trillion market cap first - Berkshire or Apple. Mr. Buffett said Apple and then proceeded to jokingly say (I'm paraphrasing a bit)... If Tim wants to swap straight up, I've got an 800 number for him. In other words, he'd swap Berkshire Hathaway straight up for Apple if he had that option.

Buffett is the embodiment of patient value investing. He might not be buying AAPL at the current price but he was buying aggressively at a price not a great deal lower than it is today, so that builds something of a confidence floor under the stock.
[doublepost=1488214039][/doublepost]
But yet, he started with beyond something else besides "Nothing." He started with will power and a forward thinking Attitude. Anyone can start with nothing, it's what you make of the situation you start with.

The old Horatio Alger story, eh? Don't forget the importance of luck. Buffett hasn't.
 
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Relentless Power

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Buffett is the embodiment of patient value investing. He might not be buying AAPL at the current price but he was buying aggressively at a price not a great deal lower than it is today, so that builds something of a confidence floor under the stock.
[doublepost=1488214039][/doublepost]

The old Horatio Alger story, eh? Don't forget the importance of luck. Buffett hasn't.

Can you explain further what you mean between Buffett and luck?
 

Bart Kela

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But yet, he started with beyond something else besides "Nothing." He started with will power and a forward thinking Attitude. Anyone can start with nothing, it's what you make of the situation you start with.
Yes, a concept lost on many folks here at MacRumors and other sites. I'm not convinced that pointing this out in an anonymous Apple rumors Q&A forum is going to be the moment of investment enlightenment for anyone.

It is unwise to trust investment advice from the Internet.
[doublepost=1488214507][/doublepost]
Can you explain further what you mean between Buffett and luck?
Buffett attributes his success to two lucky strikes:

https://qz.com/898294/hbos-warren-b...0-examines-the-billionaires-investing-genius/
 
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paul4339

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AAPL is now Buffett's second holding after Coca-Cola. Excellent news for the stock.

...

BH currently holds ~27% (about $29B) of Heinz-Kraft, and don't forget the 100% buyout of BN-SF (in 2010 was worth around $44B).

.
 

Amacfa

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Warren Buffet's dad was was a US Congressman in the late 1940s. I doubt that Warren started with "nothing". His parents definitely weren't billionaires and probably weren't millionaires but they were upper middle class. Warren started his invest company by selling (initially) to family and friends and I'm sure he had the funds to buy most any stock he thought was a good buy.

I don't want to downplay his accomplishments but this was more a middle class to riches than a rag to riches story.

And yes, he made more money than I have by the time he was my current age.
But rags to middle class isn't uncommon
 

Carnegie

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BH currently holds ~27% (about $29B) of Heinz-Kraft, and don't forget the 100% buyout of BN-SF (in 2010 was worth around $44B).

.

Berkshire owns its shares in Kraft Heinz as part of a control group (with 3G) and thus accounts for those holdings a different way. It uses the equity method rather than the fair value method. That means, among other things, that it reports earnings each year (and quarter) based on the net earnings of Kraft Heinz. If Kraft Heinz makes $1 billion, Berkshire reports a percentage of that amount (equal to its percentage ownership of Kraft Heinz) as its own earnings and then adjusts the value of its Kraft Heinz ownership accordingly on its balance sheet. That balance sheet value does not equal the fair market value of those Kraft Heinz shares (i.e. the current trading price per share times the number of shares Berkshire owns) - it is considerably less.

With the other stock holdings we're talking about, Berkshire accounts for them using the fair value method. They are valued as assets based on their market value - i.e., based on current stock prices. Increases in their value aren't counted as earnings for Berkshire until they are sold. (They are counted as unrealized gains within Berkshire's statement of its comprehensive income, but that's something different.)

So, in a sense Berkshire does own more Kraft Heinz than it does Coca-Cola or Apple, but that ownership is accounted for quite differently. Because of the accounting method it uses for its Kraft Heinz ownership (which is the result of it being considered to have significant influence over the operations of Kraft Heinz), Berkshire wouldn't typically list Kraft Heinz as one of its top equity holdings. The relationship between itself and that investment is seen as of a substantially different nature.

The situation with Burlington Northern Sante Fe is also different, even more so. It's among Berkshire's operating businesses. Berkshire is a holding company that has lots of businesses, and businesses of many kinds - e.g., insurance, manufacturing, railroad. They all contribute to Berkshire's operating results. In (perhaps overly) simplistic terms, they are part of what Berkshire does rather than things that Berkshire invests in. Berkshire has, of course, invested in those operating businesses; but it's done so in ways that make them part of Berkshire itself rather than just being stock holdings. Looking at those operating businesses respectively, we may be able to estimate a value for them or estimate how much of Berkshire's value each one fairly represents. But they don't really have clear market values as Berkshire's equity holdings do. And they wouldn't be considered investment holdings in the sense that the likes of Apple and Coca-Cola and American Express would. Berkshire owns Geico, e.g., but Geico wouldn't be considered a holding in the way those others would. It's more fundamentally a part of what Berkshire is and does.
 
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