worth a read. Todd or Ted should get more credit IMO:
Berkshire opened its Apple position in 2016, almost a decade after the release of the first iPhone.
Buffett won’t say if it was Combs or Weschler who initiated the buy, which was for 9.8m shares totalling $1B. By the end of 2018, Buffett had piled in to the trade with Berkshire owning 255m shares, at a cost of $36B (average price of $35 / share post-split).
How did Combs and Weschler convince Big Daddy Buffett — who doesn’t have a computer and wouldn’t even use his first iPhone until 2020 — to go all-in on Apple?
In the first section of this article, we talked about “the circle of competence”. While tech is out of Buffett’s circle, there is another key business attribute that is very much within his competence circle: monopolies.
there is another key business attribute that is very much within his competence circle: monopolies. Buffett loves them!
Hmmmm…the M word attracts too much scrutiny.
In polite company, or in front of regulators, we call those “companies with pricing power”.
Personally, I prefer duopolies.
Usually one gets the great majority of the financial returns, but the existence of the second firm keeps the regulators away.
20th century examples: Intel and AMD in x86 CPUs, Coke and Pepsi in colas, Microsoft and Apple in PC operating systems.
Sometimes both picks are good. Visa and Mastercard.
Buffett has made oblique references to why they bought AAPL. Once convinced of Higher prices acted as a signatory Apple products (@ NFM), he apparently tried Fisher’s scuttlebutt method, trying to take away his great grand daughter’s phone away at night.
Since he doesn’t talk about holdings, especially those where position is being built, we have to wait to hear it from the horse’s mouth.
<< Personally, I prefer duopolies. Usually one gets the great majority of the financial returns, but the existence of the second firm keeps the regulators away. 20th century examples: Intel and AMD in x86 CPUs, Coke and Pepsi in colas, Microsoft and Apple in PC operating systems. Sometimes both picks are good. Visa and Mastercard. >>
Big Daddy Buffett — who doesn’t have a computer and wouldn’t even use his first iPhone until 2020
He does have a computer:
In a 2016 interview with Bloomberg he clarified that he has a computer at home, and uses it 12 hours a week to play bridge, and a lot for search.
And he may have waited until 2020 to replace his older phone, but in 2018, when he made the large Apple investment he was known to use his iPad a lot.
Amazed and thrilled we own roughly 5.55% of Apple, and growing with the massive buybacks (467B over the last decade).
Just counted in my head 10 older and current Apple devices under our roof and about 20 more in our small business of 15 employees. The growth across all Apple divisions at their enormous size is truly remarkable.
Would also love to see us add a large Google position if it drops to a point where it makes sense to back up the truck.