Is there such a thing as too much Apple?

From “Warren Buffett’s $90 billion Apple stake represents a ridiculous 20% of Berkshire Hathaway’s market value” in Business Insider:

Warren Buffett’s Apple stake is now worth an astounding 20% of Berkshire Hathaway’s market capitalization, reflecting investors’ excitement about the tech titan and concerns about the staid conglomerate.

The famed investor’s company owned about 245 million Apple shares on March 31, according to the latest data available. Apple’s stock price has surged by 44% since then, from about $254 to more than $366 at the close of trading on Monday. Meanwhile, Berkshire stock has slid 1% over the same period.

Assuming Buffett hasn’t touched his Apple holdings, Berkshire’s stake has mushroomed in value from roughly $62 billion to almost $90 billion, or more than a fifth of Berkshire’s $440 billion market capitalization…

Berkshire made only $1.8 billion in net stock purchases in the first quarter, sold a net $6.1 billion in stock in April, and failed to make a major acquisition, strike any bailout deals, or buy back much of its own stock when the market crashed.

President Donald Trump, billionaire investor Ken Fisher, investor David Merkel, and the “captain of the day traders” Dave Portnoy have all taken shots at Buffett in recent weeks.

Cue the chart:

apple warren buffett portfolio

My take: “Ridiculous” is in the eye of the beholder.

6 Comments

  1. Paul Brindze said:
    We all know Buffet is not a trader. He only buys what he believes in and holds for many years. I don’t think that he will sell just to rebalance.

    4
    June 24, 2020
  2. Fred Stein said:
    Warren himself once said that diversification is NOT smart (for small investors) since you cannot research a large number of stocks effectively. It’s better to work hard to find a few long-term winners.

    It worked. Apple outperformed the rest of his portfolio, and mitigated Covid-19 damage to other assets.

    4
    June 24, 2020
    • Jacob Feenstra said:
      Right, Fred. I learned that the hard way. I used to really diversify… and my portfolios hardly moved. I dropped ‘diversity’ about 12 years ago and mostly went with AAPL and some smaller holdings (precious metals) and that’s pretty well it. Diversity, schmiversity.

      1
      June 24, 2020
  3. Bart Yee said:
    Portnoy recently said “I should be up billions by me making the right call about airlines and cruises (turnaround)”. Ah no, you didn’t make those billions because you never put your money where your mouth was, no conviction to take the risk. So its all just talk, plus you only have a few millions. When you can get to $500M, maybe. And the only saving grace for daytrading that I have seen is now the transaction fees have gone away, eventually the same for much of the profits. Timing the market has always been a magical thinking game, IMO.

    Fisher, oy, his programs and brokers push high expense, high commission, high turnover managed investments who can’t even perform with the indexes. Don’t care how much he made, if he can’t make me money better than I can, why listen to him?

    Merkel I know nothing about other than perusing his asset management fees which include “daily fees are assessed at the annualized rate times the net assets of the prior day, divided by the average number of trading days in a year, which is 252. Direct billed quarterly fees are assessed on the quarter end net assets times the annualized rate divided by four.”…”Fees are withdrawn daily for accounts that ar not choosing to have us bill them externally quarterly. Its your choice: just let us know.” Uh, no thanks, very similar to Merrill Edge where they used to say, paraphrasing “The better you do, the better we do.” If you take my money in fees when things go bad, uh uh.

    Trump on Buffet’s investing? No comment.

    0
    June 24, 2020

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