Warren Buffett loves to concentrate his Berkshire Hathaway’s invested capital in a small number of top ideas and, after buying back Berkshire Hathaway stock, his top idea is the world’s most valuable company, Apple, which accounts for close to 48% of Berkshire’s invested assets.
Sean Williams for The Motley Fool:
As of the closing bell on June 16, 2023, the 915,560,382 shares of Apple stock held by Berkshire Hathaway equates to a market value of $169.3 billion. This works out to 47.8% of the invested assets of Berkshire’s investment portfolio and is nearly 40 percentage points higher than the second-largest holding by portfolio weighting, Bank of America (8.5%).
The Oracle of Omaha and his team are up big on their Apple stake. Based on estimates from Form 13F aggregator WhaleWisdom.com, the more than 915 million Apple shares owned by Berkshire Hathaway have a cost basis of $39.62. In other words, Buffett and his investing lieutenants (Ted Weschler and Todd Combs) have turned an approximate $36.3 billion investment into $169.3 billion, not including dividends paid, over seven years. Not too shabby!
Buffett hasn’t been shy about his feelings for Apple. During Berkshire’s annual meeting, he referred to the tech giant as “a better business than any we own.” That’s a powerful statement considering Berkshire holds stakes in around four dozen securities and has acquired roughly five dozen companies over the years.
MacDailyNews Take: Investor’s could do worse — much worse — by not simply following Buffet’s investments and advice.
Those who have iron stomachs in the face of risk, year after year, can make multiple millions of dollars with relatively very little invested, if they go “all in” on the right company long term.
Diversification is… a protection against ignorance. — 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.*
In April 2003, Apple shares sold for 20-cents each.* Even as recently as 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, for example, “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,” but who instead went “all in” on AAPL and never sold a share.
Diversification, in the absence of investing perfection (which does not exist), also does an excellent job of mitigating big, life-changing profits.
*Prices adjusted for splits and dividend distributions.
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[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
The post Apple is nearly 50% of Berkshire Hathaway’s portfolio; Warren Buffett: ‘Apple is a better business than any we own’ appeared first on MacDailyNews.
