- Berkshire Hathaway’s Apple stake — which is now 40% of its equity portfolio — is up a whopping $40 billion since the bottom in March.
- The investment in the tech giant played a crucial role in helping the conglomerate weather the coronavirus crisis as other pillars of its business, including insurance and energy, took a huge hit.
- “Had he stuck to his guns and only bought value stocks, that portfolio would not have done as well,” said Cathy Seifert, a Berkshire analyst at CFRA Research. “At the end of the day, shareholders are going to applaud this move.”
An off-brand move to pile into Apple shares might have been Warren Buffett’s greatest trade ever.
Berkshire Hathaway’s Apple stake — which is now 40% of its equity portfolio — is up a whopping $40 billion since the market bottom in March. The investment in the tech giant played a crucial role in helping the conglomerate weather the coronavirus crisis as other pillars of its business, including insurance and energy, took a huge hit.
Investing in such a high-flyer seemingly defies Buffett’s well-known value investing principles. Berkshire bought its first 10 million Apple shares in May 2016 through one of Buffett’s lieutenants. In the span of four years, the “Oracle of Omaha” ditched his usual aversion to tech and increased his bet to 245 million shares, now worth more than $95 billion, to become Apple’s second largest shareholder, only behind Vanguard.
The stake cost Berkshire about $35 billion, or $141 per share, according to estimates based on disclosures in its 2019 annual letter. So that means overall the “Oracle of Omaha” — who took a lot of criticism for bailing on airlines during the pandemic before their shares snapped back a bit — has more than doubled his money and made $60 billion on Apple in total.
“Had he stuck to his guns and only bought value stocks, that portfolio would not have done as well,” Cathy Seifert, a Berkshire analyst at CFRA Research, told CNBC. “At the end of the day, shareholders are going to applaud this move.”