
Warren Buffett's Berkshire Hathaway Takes $1B Position in Apple - stevenj
http://www.wsj.com/articles/buffetts-berkshire-takes-1-billion-position-in-apple-1463400389
======
jalopy
[edit]Disclosure - I am a Berkshire Hathaway investor and more intense than
average follower of the company and it's top management.[/edit]

This is almost certainly a bet by Ted Weschler or Todd Combs - Buffett's chief
investing lieutenants.

Buffett has maintained his aversion to tech as he doesn't "understand"[1] it,
and I see nothing to indicate he's changed his mind at this stage in the game.

Also - a $1bn investment is relatively small change for Buffett, but fits
squarely within the size range of Ted and Todd's reported $8-10b (each)
investment warchest.

[1]: Not "understanding" doesn't mean he doesn't or couldn't understand the
technology aspects; rather, it means he doesn't have the ability to see which
of the participants will survive and thrive in 10 years time to justify an
investment today. IBM is a notable exception.

~~~
mathattack
I suspect that IBM fits his understanding because he views it as a services
company, rather than a hardware or software company. Services he does
understand. I think he also likes that they give most of their cash back to
the shareholders. (Which makes them a value play rather than a growth play) I
was still surprised by the investment though.

~~~
banku_brougham
IBM is dying, [http://www.cringely.com/2016/03/08/whats-happening-at-
ibm/](http://www.cringely.com/2016/03/08/whats-happening-at-ibm/)

I hope their Apple purchase isn't an indicator of the same.

~~~
rdtsc
Yeah that guy wrote a book about how IBM is dying a few years ago and ever
since then keeps writing blog posts about it.

Whether it is dying or not I would not listen to him.

~~~
banku_brougham
A behemoth like IBM takes a while to die. I've read a bit about IBM. They are
toast, the market for mainframes, server racks and expensive enterprise
service packages is disappearing.

~~~
notaharvardmba
Except watson, patents, their financing arm, 99 year contracts with
governments globally...

~~~
josh2600
... Have you ever tried to use Watson for anything?

The aspect of dying is a forward looking thought which presumes that growth
has ceased within the organization and the best they can do is to maintain
their current state. I think that's a fairly accurate depiction of IBM's
business although the recent performance notes I've seen of the Power chipset
with PG_SQL are pretty encouraging.

------
whafro
This isn't a huge bet in BH's world, barely cracking their top 20 holdings
list, and it barely registers a blip for Apple, but it's culturally
interesting to see Buffet make another no-tech exception for Apple, and it
will be interesting to see how much that confidence transfers to the street.

Buffett and Berkshire do tend to love companies that generate cash, and Apple
certainly does that. They don't tend to chase massive growth, but rather
steady climbs backed by real profits. It seems like a pretty reasonable fit.

~~~
SmellTheGlove
This is well-stated. I worked for a Berkshire subsidiary for a good chunk of
my career, and can tell you the Berkshire values really are what drive the
investment. It's not so much about fundamentals, although they do need to be
very sound or on the value side, as much as focused, lean management with a
clear plan. In this case, I'm thinking Berkshire thinks Apple's share price
represents a clear value at the moment (I agree, not that it matters what I
think), and there's probably a lot of confidence in the management team going
forward. Berkshire doesn't try to catch a falling knife, so they must think
otherwise.

~~~
ambicapter
What's Apple's clear management plan?

~~~
Bud
Make better products than everyone else, have better supply-chain management
than everyone else, and have higher profit margins than everyone else even
dreams of.

It's a plan that has been working out fairly well.

~~~
snowwrestler
Right. A management plan is not the same thing as the product roadmap. Apple
is secretive about their products, but not how they run their business.

------
lujim
Took. This happened in March at an average price of $109. Today it is around
$93. Berkshire just disclosed it today.

~~~
bpicolo
Are billion dollar investments in public companies not public knowledge?
(Serious question)

~~~
jonknee
They are once the quarterly 13F reports come out.

[https://www.sec.gov/answers/form13f.htm](https://www.sec.gov/answers/form13f.htm)

For smaller companies it can also come out in a 13D which is faster (within 10
days), but only if the investment is more than 5% of the company. That's why
there are a lot of ownership stakes of 4.9%.

~~~
marblar
> That's why there are a lot of ownership stakes of 4.9%.

Is reporting speed really important enough to change the size of your
investment?

~~~
jonknee
Apparently so. Hedge funds really don't like to disclose their positions.

------
MicroBerto
I'm just here to set in stone and state for the record that I believe this
will be a losing play. My reasons are here:

Rationale here from a comment over 3 months ago:

[https://news.ycombinator.com/item?id=11035168](https://news.ycombinator.com/item?id=11035168)

> last time I was on an airplane (December), every single older woman over the
> age of 60 had an iPhone. This means that it's not only reached critical mass
> (the late majority on the technology adoption curve has been achieved), but
> now it's no longer hip.

> I'm not sure what will be next, but I'm guessing it won't be Apple's.

> Were I gambling man, I'd have shorted Apple's stock right there after that
> airplane ride.

So when I'm wrong, y'all can roast me proper.

~~~
kfk
Be careful thinking Apple will keep sellng iphones and ipads. Their expertise
and their cash can probably be thrown into a lot of industries with disruptive
success (car industry, pharma, space exploration, etc.). Even the name, Apple,
does not bind the company to any specific line of product. I think what the
investors are betting here is the ability of Apple of coming up with something
as big as the ipod-ipad saga in the coming years. I can see risk in this
assumption, but I don't believe is 100% going to turn out badly, so far I'd
distribute probabilities equally and do a 50/50 that Apple gives the investors
10x in the next 10 years.

~~~
throwaway2048
You truely beleive that a company with almost the largest market capitization
of any company has a large chance of increasing it by 10x?

~~~
colbyh
in 1993 Exxon was the world's most valuable company with a market cap of
roughly $80B. they didn't reappear as the most valuable company again until
2007 with a valuation of roughly $500B. yeah, big swings are still possible
even in very established markets.

~~~
aurelianito
How do these numbers look closer if you correct for inflation.

$80B in 1993 are equivalent to $114.79B in 2007.

------
swalsh
Let's say you're an owner of one of the nations biggest car insurance
companies... and the biggest threat to auto insurance are automated cars.
Perhaps the smart thing to do, if you're an investor is to hedge your bests by
investing in a company that is likely to dominate the sector.

Of course Alphabet would be a more logical path, so this theory might be
bollocks.

~~~
maerF0x0
How are automated cars a threat to car insurance?

~~~
riprowan
Why should one need to buy a liability insurance policy on a self-driving car?

What driver exactly am I insuring?

~~~
dragonwriter
> Why should one need to buy a liability insurance policy on a self-driving
> car?

The same reason property owners in general by liability insurance for
liabilities that may occur to do property they own.

> What driver exactly am I insuring?

Most likely, you're insuring against liability resulting from your obligation
as the owner (or leaseholder-in-possession, in the case of a lease) of the
autonomous vehicle to maintain the vehicle in condition for safe operation and
to remove it from operation if that is not possible.

------
Rainymood
To get around the paywall, follow this link

[http://bit.ly/1VYxVrA](http://bit.ly/1VYxVrA)

This bit.ly link redirects you to the first google hit after looking for this
article on Google. For some reason this circumvents the paywall.

~~~
Velox
Just click the "web" link underneath the title on the comments page.

~~~
Rainymood
Never knew that. Today I learned. Thanks a lot.

------
Negative1
And here I was thinking "what a great time to buy Apple stock".

I don't think Buffet is betting on technology. From his perspective he is
betting on the car and car brand of the future.

~~~
sethev
Only he knows for sure but it seems a lot more likely from reading his annual
letters that he's betting on the quality of their management team and their
continued ability to produce profits. It would be very out of character for
him to make a bet on future technology.

------
Mikeb85
Not a terrible bet. Their dividend yield is fairly respectable at current
prices, the price has fallen to around 2012 levels, and Berkshire mostly likes
long-term, stable bets.

I personally don't see Apple doing too much in the short term, but they'll
certainly continue to be around, and will probably match the market in returns
for the foreseeable future.

------
zhte415
Very interested in how the trade was executed. A big fish order, was it done
in small chunks, by proxies? It was certainly not done in one go.

Experience: Even 10 years back putting when in an investment management team,
a $100 million order (of roughly same magnitude for total outstanding) was
done painstakingly, often over several days, via various brokers, varying what
was done based on intra-hour liquidity. Now, intra-hour liquidity is much less
than hours and highly automated, so anyone HFT looking, would be interested.

~~~
tim333
Traditionally Buffett works with two or three stock brokerage firms he trusts
and tells them to buy the stocks he wants. They often just keep buying when
blocks come on the market or it looks cheap. That can go on for months or
years. Maybe not so much with $1bn of Apple but his $27bn stake in Wells Fargo
for example has been built over some years.

------
paulpauper
it seems like a lot until you realize it's 1/300 of Berkshire Hathaway and
1/550 of Apple

~~~
rcar
Agreed - if you buy an S&P 500 index, 1/36 of your money is in Apple.
(Holdings tab on
[https://www.spdrs.com/product/fund.seam?ticker=SPY](https://www.spdrs.com/product/fund.seam?ticker=SPY))

Not that big a bet on BH's part.

~~~
xapata
Not necessarily. The index fund is supposed to track the index. It doesn't
need to actually buy the exact stocks as the index, though in the case of the
S&P 500, that might be the easiest strategy.

~~~
whatok
Uh, it's not only the easiest strategy but the only purpose the ETF exists. If
people thought SPY had drifted from its benchmark, no one would use it.

~~~
lis
ETF still have different replication strategies. To the customer they
guarantee to track the index, however they might buy completely unrelated
stocks or options to achieve this. The replication strategy should be an
important factor when buying an ETF.

~~~
jonknee
Yes, and SPY is the monster ETF that it is because there is no funny business
and it tracks the index the old fashioned way by actually holding the
securities. Broker dealers can trade in a basket of securities for new shares
of SPY and vice versa which keeps it very close to perfectly tracking the
index.

------
lingben
"I can tell you this was not a purchase Warren Buffett made. It was one of his
two lieutenants"

@BeckyQuick on CNBC this morning

------
reviseddamage
What I get from BH signal: Well I don't have to worry and put AAPL into
retirement portfolio, although probably means no longer salacious enough for
shorts or immediate growth investors.

~~~
tedmiston
... until the car comes out.

In reality, Apple has always been a long for me, and presumably anyone working
in tech that invests directly.

------
11thEarlOfMar
Seems that there is a significant difference of opinion between Carl Icahn and
Warren Buffet.

[http://www.bloomberg.com/news/articles/2016-04-28/billionair...](http://www.bloomberg.com/news/articles/2016-04-28/billionaire-
icahn-exits-apple-stake-almost-3-years-after-buying)

~~~
DavidHm
To be honest I always thought that Icahn was never in for the long term. He
just went and raised a ruckus about wanting those $100B cash reserves
distributed to stock owners.

~~~
zerohm
I saw a TV segment / interview about Icahn years ago and that was impression I
got. His M.O. is to buy a stock, create some attention, and sell, based mostly
on the attention he brings, more so than the improvements he makes.

------
louprado
A bit off topic, but when you buy that many shares of a public company can you
negotiate a discount? Is the trade done directly with Apple, or does Berkshire
Hathaway just buy it through Nasdaq ?

~~~
lujim
Let's say you are a private company and want to raise money. Instead of taking
on debt you decide to sell some of your business. You will go through an
investment bank who will help you quantify the value of your business and
underwrite/distribute shares of it to the public. This is the primary market
where new shares are created.

After that happens market participants can sell those shares to each other
based on supply and demand. As demand for a companies shares rise, prices rise
and vice versa. The secondary market is what you and I as individuals think of
when we talk about buying and selling stocks. There is no real discount that
Apple could offer Berkshire because they aren't selling the shares, market
participants are (individual investors, brokers etc). The trade would take
place as a complex series of transactions on a variety of exchanges. Sometimes
Nasdaq, but other times on exchanges like ArcaEdge, Bats, Direct Edge, NYSE
and others.

The complexity is that if you dump 1 Billion dollars into the market to buy x
number of shares of AAPL you will drastically increase demand and move the
price considerably, so the trade must be executed as a series of transactions
over a given time period.

Now if one public company buys another public company in a merger there is a
set share price that is negotiated but that's outside of the normal process of
buying and selling stocks.

------
shrugger
I swear this is just for headline generation.

I mean, a billion IS a lot of money, but it's a very small risk on BH's part,
and an even smaller part on Apple's.

That amount of money is a lot of money relative to other money, but it's not
really a big deal relative to either party here.

However, I think that Buffett is just making a statement of 'look how much I
think of Apple' by throwing that bn around, perhaps inspiring other investors?

Not really my preferred science...

~~~
pessimizer
[misinformation] One or both of the parties saw fit to press release it. It's
clearly a favor for Apple. [/misinformation]

edit: For some reason I didn't process that the investment was old, although
it's the first few paragraphs of the article.

~~~
whatok
From the article:

> Berkshire’s positions were disclosed in a 13F filing with the Securities and
> Exchange Commission, a quarterly requirement for investors managing more
> than $100 million. The report indicates the number of shares held and the
> value of each stake at the end of the quarter, so it isn’t clear if Mr.
> Buffett’s firm has continued buying the stock since the quarter ended.

------
elcapitan
I thought Buffett doesn't invest in tech companies - is Apple now so much away
from tech and so close to being a product like Coca Cola?

~~~
atestu
That used to be true, but he's had a stake in IBM since 2011 (which he just
increased)

------
bernardlunn
Apple is now almost a value stock. With an incredible franchise. Don't bet
against Buffet

------
nxzero
Curious, anyone have any info on the relationship between Jobs and/or Cook and
Buffet?

------
programminggeek
To be clear, it's not even a technology investment. It's more of a clear, easy
to understand investment in a hardware product company with great margins,
great marketing, great customer loyalty. It's like investing in Coke.

------
EGreg
This doesn't make much sense to me. I would expect Apple to have nowhere to go
but down since a few years ago. I realize this isn't a huge bet, but what are
they betting on? Apple for Cars?

------
qaq
For everyone dismissing this as a small play for BH it's not that small also
we have no clue about other possible elements of this position (e.g.
derivatives, options etc.).

~~~
nstj
That logic works the other way also (ie: it could just be some huge long in
the stock to arb an options position and therefore be a $0 exposure to Apple
stock). Disclaimer: I am not an options market maker so I'm unsure if you can
realistically do a delta hedge on 1bn of AAPL.

~~~
qaq
very true

------
darawk
As someone who is short AAPL, my perspective is that they simply don't have
room for growth. At the moment, they are essentially a one product company:
the iPhone. And yes, that product is insanely profitable, but those numbers
are going down, and personally I don't see a way for that trend to change.

Apple has expanded into every available market on the planet (literally). The
only way for them to grow at this point is to increase their market share
relative to android, or increase world economic growth sufficiently that more
people in developing countries can buy iPhones.

Increasing their market share relative to android in any significant way seems
incredibly unlikely to me at this point. As technology stagnates (as is
happening with smart phones), the premium products lose cachet and the lower-
end products start to achieve parity with their premium competition.

The two markets where they could still theoretically hope to achieve more
growth/penetration are China and India. But China has been antagonistic to
them of late, and has demonstrated an interest in protecting its own
incumbents who are now making phones that even Westerners will buy (e.g.
Huawei). India on the other hand is a highly tech-oriented culture, and as
such has a predilection for customization and control that tends to make them
prefer android phones. Not to mention that the CEOs of both Microsoft and
Google (the only two competitor platforms to the iPhone) are currently Indian,
and both companies have demonstrated a specific interest (especially Google)
of expanding in the Indian market. And I think that gives them an advantage
that's hard to overstate.

All of this would be fine if the market itself were expanding. But it's not.
People are upgrading less and less frequently. This looks to me just like the
PC market of 5-10 years ago or so. Things have gotten "good enough" for most
people. I certainly no longer feel compelled to have the latest and greatest
phone right away, and it seems to me that most people feel the same.

Lastly, there is the possibility that they will create some new category
defining product. This is of course a real possibility, but I feel pretty
confident that anything they attempt to do in the car market will fall flat on
its face. I could certainly be wrong here, but I just don't see how they could
possibly offer something so much better than existing cars that i'd want to
pay an Apple-level premium for it. Especially when they're competing against
someone like Tesla, who has already captured all of the rebellious smart-
person cool points in this category.

Of course, I could certainly be spectacularly wrong. And to be honest, if I
am, I don't think i'd mind losing the money too much. Because it'd mean that
we'd all probably have some cool new product to play with.

~~~
brisance
>Increasing their market share relative to android in any significant way
seems incredibly unlikely to me at this point. As technology stagnates (as is
happening with smart phones), the premium products lose cachet and the lower-
end products start to achieve parity with their premium competition.<

Counter-example in a mature industry: Porsche. When the GTR was launched 9
years ago, people were hyping it to be the death knell of all other
performance cars. Instead, today we have a wider selection of very good cars
and the GTR is no longer the no-brainer choice for performance enthusiasts.
Yes, it still offers good performance-value, but there are other good choices
out there as well. Of all the car makers, Porsche was thought to be the most
severely impacted by the GTR and yet they have gone on to greater heights.

>The two markets where they could still theoretically hope to achieve more
growth/penetration are China and India. But China has been antagonistic to
them of late, and has demonstrated an interest in protecting its own
incumbents who are now making phones that even Westerners will buy (e.g.
Huawei)<

How much money is Huawei making from selling Android phones? What about that
Google ad revenue in China, how's that doing?

>Not to mention that the CEOs of both Microsoft and Google (the only two
competitor platforms to the iPhone) are currently Indian, and both companies
have demonstrated a specific interest (especially Google) of expanding in the
Indian market. And I think that gives them an advantage that's hard to
overstate.<

Microsoft's chances at mobile at this stage are as good as Ted Cruz's winning
the Republican nomination. Some number closer to zero. Again, how much is
Google making from Android phone sales? How are the Nexus sales numbers?

Google's competitor is not Apple. Google's competitor is Facebook. Luckily for
Google, Facebook is banned in China too.

>I certainly no longer feel compelled to have the latest and greatest phone
right away, and it seems to me that most people feel the same.<

The smartphone is a very interesting product. It is used multiple times a day,
is cheap enough to be ubiquitous yet still offers value to people who seek to
differentiate. In my view this is only the beginning of the smartphone race.
Technologies like NFC/Apple Pay are still in their infancy and are not
widespread enough. There will be more sensors, better imaging technology, more
features that people would desire.

How the differentiation is implemented, matters. You will not find someone
cross-shopping Hermès with Coach. Similarly the large majority of people will
not cross-shop a Ferrari with a Nissan. That is not to say anything about the
value of the brand. It just means there are different markets being served.

~~~
darawk
> Counter-example in a mature industry: Porsche. When the GTR was launched 9
> years ago, people were hyping it to be the death knell of all other
> performance cars. Instead, today we have a wider selection of very good cars
> and the GTR is no longer the no-brainer choice for performance enthusiasts.
> Yes, it still offers good performance-value, but there are other good
> choices out there as well. Of all the car makers, Porsche was thought to be
> the most severely impacted by the GTR and yet they have gone on to greater
> heights.

Ya I wouldn't make the mistake of saying that it's the death-knell of the
smart phone. I just think we'll be seeing a significant contraction of the
market that has driven the insane profits apple has had for the past few
years. Certainly smartphones will be a massive and massively profitable
product for years to come.

> How much money is Huawei making from selling Android phones? What about that
> Google ad revenue in China, how's that doing?

Much less, even more so in unit terms. I wouldn't invest in Google or Huawei
at the moment either. I'm not short Apple because I think those companies are
going to do well, I think they're all likely to do poorly. Google and Huawei
will expand their market a bit, I think, but their unit economics suck
relative to Apple so it won't matter as much.

> Microsoft's chances at mobile at this stage are as good as Ted Cruz's
> winning the Republican nomination. Some number closer to zero. Again, how
> much is Google making from Android phone sales? How are the Nexus sales
> numbers? Google's competitor is not Apple. Google's competitor is Facebook.
> Luckily for Google, Facebook is banned in China too.

Totally agree. Again, I don't expect Google to do well at the expense of
Apple. For Google phones are just a way of pushing their services, so gaining
market share vs Apple doesn't help them all that much in terms of their bottom
line.

> The smartphone is a very interesting product. It is used multiple times a
> day, is cheap enough to be ubiquitous yet still offers value to people who
> seek to differentiate. In my view this is only the beginning of the
> smartphone race. Technologies like NFC/Apple Pay are still in their infancy
> and are not widespread enough. There will be more sensors, better imaging
> technology, more features that people would desire. How the differentiation
> is implemented, matters. You will not find someone cross-shopping Hermès
> with Coach. Similarly the large majority of people will not cross-shop a
> Ferrari with a Nissan. That is not to say anything about the value of the
> brand. It just means there are different markets being served.

Ya, I don't disagree here either. I don't expect Apple to _lose_ significant
market share in places where they're already established. I mostly expect that
the upgrade rate will slow, and they will not gain new market share in India
and China. The sum of those two things is a substantial decline in profits for
them over the next couple of years.

I could certainly be wrong about all this. It's actually the first time i've
ever shorted something, and it's kind of just an experiment to get my feet wet
with more exotic trades. I don't claim to be any sort of expert on the subject
:).

~~~
brisance
>>Ya I wouldn't make the mistake of saying that it's the death-knell of the
smart phone. I just think we'll be seeing a significant contraction of the
market that has driven the insane profits apple has had for the past few
years. Certainly smartphones will be a massive and massively profitable
product for years to come.<<

I'm unsure my point came across clearly; if it didn't then the fault lies with
me.

The GTR and the 911 (in all its variants) are in the performance segment. No
one is saying just because the GTR exists, all other segments like SUVs, MPVs,
saloons/sedans etc will no longer exist. To reiterate: despite Porsches
costing more and GTRs costing less, and on an objective level the GTR is a
better car in terms of performance, 911 sales are not flagging off. They have
instead increased. And the 911 is already more than 50 years old. [1] So your
conjecture that premium luxury smartphone sales like the iPhone will level off
or even be reduced due to "commoditization" is not very well-supported. In
fact the inverse is true: Porsche is one of the most profitable car makers on
a per-unit basis. [2]

>>I don't expect Apple to lose significant market share in places where
they're already established. I mostly expect that the upgrade rate will slow,
and they will not gain new market share in India and China. The sum of those
two things is a substantial decline in profits for them over the next couple
of years.<<

I think this is where we fundamentally disagree. In my experience I have never
once met a person who said they aspire to own a Hyundai, Kia, Lada etc or have
a poster of these cars on their bedroom wall. Nothing wrong with these brands
of course, they bring in profits for the manufacturers. But these are
different markets we are talking about.

It is true that Porsche had to come up with the Cayenne to stave off
bankruptcy, because at that time SUVs were in demand and they did not have one
in their lineup. Yet this is instructive as it only reinforces my point
because the Cayenne is now the #1 selling Porsche. Chevy, Ford and all the
other makers combined can continue to sell more SUVs than Porsche does
Cayennes but they are in different markets. People who buy Cayennes don't even
consider these other brands. They might consider Land Rover or Mercedes/BMW or
even sister-label Audi (essentially the same chassis). Same applies to the
iPhone vis-a-vis Android "replacements". Who knows, perhaps the iPhone SE may
one day become the #1 selling iPhone?

tl;dr it is possible for a premium luxury manufacturer to continue to grow and
expand its business, despite being in a mature industry like autos.

[1]
[http://press.porsche.com/more_about/statistics/](http://press.porsche.com/more_about/statistics/)

[2]
[https://en.wikipedia.org/wiki/Porsche#Production_and_sales](https://en.wikipedia.org/wiki/Porsche#Production_and_sales)

~~~
darawk
Ya, your point is well made. I think where I would disagree is that cars have
always been about identity. Nobody (or very few, at least) people buy a
Cayenne because it's fast or performs well. People buy it because they think
it says something about who they are. The fact that it's highly performant is
just how you rationalize the price to the consumer.

Cars can get away with this because they are so well wrapped up with the
presentation and identity of their owners/drivers. To some extent, this is
true of phones. But I guess I just don't think it's nearly as much the case as
it is with cars. Somewhat ironically, this is because an iPhone is not
expensive _enough_ to really say much about the wealth of its owner. At least
- not in the way that a car does.

Admittedly, that might be slightly hold less true in developing economies,
where the ownership of an iPhone really is something only the (relatively)
wealthy can attain. But in that case, their rate of expansion is determined by
the rate at which people rise out of poverty. Which I don't think is fast
enough to outpace the declining upgrade rates.

------
vadym909
Wow- This must be hard for Buffett to explain to Bill Gates- his close friend.
Did he ever invest in Microsoft?

~~~
nicky0
I'd be surprised if Bill Gates holds ill feelings towards Apple.

------
chmaynard
[http://on.wsj.com/1sriCf9](http://on.wsj.com/1sriCf9)

------
SixSigma
Maybe he's gambling on Trump's "onshore your cash or else"

------
mudil
Berkshire has too much money and too few ideas as to what to do with it. Why
not the second largest stock with tons of untaxed cash? And they can push for
tax amnesty to repatriate it.

------
mandeepj
Not sure why Buffet decided so late to invest in apple. Returns will not be as
high as pre iPod or iPhone era

~~~
corin_
Comparing to past theoretical entry points to buying Apple is irrelevant. I'm
not sure why all of us didn't invest in Apple 10 years ago! Oh, it's because
it's easier to predict the last 10 years than the next ten years. Just because
investing 10 years ago would have been great, it doesn't mean that in 10 years
time a 2016 investment in Apple won't also look great.

~~~
coldtea
> _Comparing to past theoretical entry points to buying Apple is irrelevant. I
> 'm not sure why all of us didn't invest in Apple 10 years ago!_

Shortsightedness?

Without any hindsight involved, 10 years ago the continuous rise for several
years seemed inevitable AT THE TIME.

Now it's not so clear.

But it's not because "it's easier to predict the last 10 years than the next
ten years".

Rather it's because it was easier to predict the next ten years in 2006 than
it is now.

~~~
nicky0
Since it was so obvious and inevitable to you at the time, I assume you put
all the spare money you had into Apple in 2006?

------
ZoeZoeBee
Berkshire Hathaway was down 12% last year, has under-performed the S&P 500 for
five years running, bought Apple North of $100, and are heavily invested in
the railroads via Burlington Northern which has seen freight revenue dropping
for over a year. Which part of this is not true?

~~~
corin_
> _Berkshire Hathaway was down 12% last year_

It's easy to cherry pick dates to suit your argument.

    
    
      12 months leading to end of 2015: down 12%
      24 months leading to end of 2015: up 11%
      36 months leading to end of 2015: up 40%
      
      ~5.5 months between end of 2015 and today: up 8%
    

Was your statement true? Yes. Misleading? Even more so.

Your other statements... well maybe you're 100% right and not even misleading
on those, but after choosing such a bad statement for your lede I'm not going
to bother looking them up.

Edit: Actually I was curious enough to look into one more of your "facts".
According to Business Insider, S&P 500 doesn't even come close to beating B.H.
But maybe you have better data than them.
[http://static2.uk.businessinsider.com/image/54f4d8a6dd08955d...](http://static2.uk.businessinsider.com/image/54f4d8a6dd08955d558b4622-1200-924/good-
index-comp-final.png)

~~~
ZoeZoeBee
Last year refers to 2015, Jan 1st 2015 = $151 Dec 28 end of year 2015 = $133
Not misleading at all.

>Berkshire Hathaway’s poor performance in 2015 is noticeable due to the huge
underperformance relative to the market. But a closer look at the performance
of the company over the past three years suggests that this is something that
has been going on for some time. Berkshire Hathaway has actually significantly
underperformed the market over the past five years, with a return of 61.4% vs.
71.4% for the S&P 500 Growth Index (the index tracks the performance of large-
cap U.S. securities with growth characteristics).
[http://amigobulls.com/articles/has-berkshire-hathaway-
lost-i...](http://amigobulls.com/articles/has-berkshire-hathaway-lost-its-
mojo)

Your Business Insider Chart is a chart of a price index from the day he took
over Berkshire, things aren't what they used to be, it was my bad that I did
not preface Growth Index, but your conclusion that the first statement was
misleading is completely incorrect

~~~
tinkerrr
Is there any stock or asset that would beat the S&P500 on an absolute basis
for all time periods? No. Therefore you can play this game with every single
asset class, without exception. It doesn't mean anything, and that is why your
comment is misleading. Just looking at a selected time-range and finding
underperformance doesn't tell you anything at all about the historic
performance of an asset.

~~~
ZoeZoeBee
Over the last 5 years Berkshire has underperformed the S&P 500 Growth

[http://amigobulls.com/articles/has-berkshire-hathaway-
lost-i...](http://amigobulls.com/articles/has-berkshire-hathaway-lost-its-
mojo)

Certainly the last 5 years tells more of a trend than historic performance. My
facts are correct and Berkshire has been on the decline for a while, my
opinion its certainly not worthy of being downvoted

~~~
tinkerrr
Why cherry-pick 5 years? Just look at their performance since inception. It is
clearly laid out in their 13F. The company has trounced the S&P over such a
long-term it is pretty incredible actually.

[http://www.berkshirehathaway.com/2015ar/2015ar.pdf](http://www.berkshirehathaway.com/2015ar/2015ar.pdf)

1964-2015, the S&P500 returned 11,355% and BRK returned 1,598,284%.

p.s. not downvoting you, just disagreeing.

~~~
ZoeZoeBee
It's not cherry picking the last 5 years its looking at the trend, rather than
historical returns of a company to see the direction it is heading.

