He is selling and selling

Stocks A to Z
21

There is no mandate. The 5% goal can be achieved by dividend.

Not necessarily. The family will forever control the foundation.

If you think Buffett cares about retail investor, I have a bridge to sell. He cultivated a very careful image. Most of the retail wanted him to do buyback and not carry cash. He didn’t care. Even A-share holders wanted dividend and he suggested selling some of their shares rather than pay dividend. Check his sisters interview… The ask for dividend is very loud and Buffett ignored. Those who claim he let shareholders vote that was 10 years ago. Dividend is coming.

What Buffett did is not a template for the future.

22

Here is looking at Apple specifically and possibly why he is selling.

Since Buffett started buying Apple (2016), it valuation has gone up by 472%, Revenue has gone up by 13% and Net Income up by 16%.

Now, Apple has been paying dividends and buying back shares but the rise in valuation from $500B to $3.3T in 8 years stands out.

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23

I would imagine he finds the valuation uncompelling. Similar to Coke, back in the day, when he held on.

Maybe some confirmation bias on my part as well.

Regards,
CMFBLSH
no position in AAPL

24

The revenue and net income would look a little better if you hadn’t compared July 2024 to January 2016. In other words, the usual worst quarter (July) versus the usual best quarter (Jan)

25

Ashwath Damodaran thinks that he sold Apple because it became 30% of BRK’s market cap.

This makes sense to me.

2 Likes
26

I completely agree with this. As the Apple stake grew, Berkshire became more and more levered to Apple. And in the end, Buffett and the other managers, still have the usual fiduciary duty to Berkshire Hathaway. Even now it might still be an oversized position to maintain, traditionally 5-10% of total assets is the max in one position for typical levels of safety.

Now, if they decide to sell the rest of their Apple holding, I would obviously change my mind. Then there has to be a clear reason for the sale.

All the folks saying that WEB did this due to macroeconomic headwinds coming, appear to have ignored everything WEB has said over his decades of investing.

1 Like
27

Tim Cook has been buying back significantly overvalued shares for a while. At the same time, he’s been throwing SBC at employees. Both destroy shareholder value.

I think this, plus the overvaluation, plus the possible increase in corporate tax, is what pushed WEB to sell 50% of the stock. I think Tim Cook sucks at capital allocation (and not only), except into his own pockets. There is a correction coming, sooner or later.

28

What’s the average price of Cook’s buybacks???

How much SBC (Share Based Compensation) has Cook been using compared to comparable tech companies?