Think the boss is buying more Apple?

Apple is trading at about $138-$139.
Pretty close to the number I’m using for valuing it, which lots of people seem to think is too conservative.

Any speculations?

Jim

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To be honest, I’m a bit more curious to know if he is buying more of his own company?

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Buffett bought $600 million during first quarter when the price was higher than today (the lowest tick was $150.10), and said he would’ve bought more but the price went up. So, maybe some more nibbling now? And if not, hopefully Luca has been buying.

I do for sure

At this time, I hope he is buying back BRK stock instead of Apple. Apple may be just about at FVE, but BRK is around 15% below FVE. Holdings of Apple per share of BRK will rise with BRK and Apple buybacks, anyway.

Coincidentally, Apple and MSFT are trading around the same fwd PE of 23.Interestingly, the 5-year total return CAGR for both are also close to 30% (figures from Morn*). I think MSFT will be less affected by supply chain issues caused by China lockdowns, chip shortages etc, since more of their revenue is from software licenses. So at these valuations I would prefer MSFT to Apple.

Also Google, Meta and a host of Chinese techs are also better value, depending on your risk appetite.

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“At this time, I hope he is buying back BRK stock instead of Apple. Apple may be just about at FVE, but BRK is around 15% below FVE. Holdings of Apple per share of BRK will rise with BRK and Apple buybacks, anyway.”

I agree and would anticipate he is buying both. He normally does not talk his book but it’s so clear he loves Apple. Tim Cook must be repurchasing as well with the recent market haircut. Win win win for all it would seem. Wonder if our huge position size (38.6% of total equities) would limit how much more WEB would add to AAPL- doubt it, as he has had a 40+% position size many times in the past from what I understand.

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I think MSFT will be less affected by supply chain issues caused by China lockdowns, chip shortages etc,
since more of their revenue is from software licenses. So at these valuations I would prefer MSFT to Apple.

Though you make sense, for Berkshire it probably depends on the longer term view…what a pessimistic view of the business will be, looking out 10-15+ years.
I can imagine that many people, some of them in Omaha, might have a stronger view of Apple in that regard.

But for someone like me, the big issue with Apple which Microsoft does not share is the Chinese exposure.
Both manufacturing and sales/profit exposure are very large, and something could go bump in the night geopolitically with one or both of them.
In fact, I think that risk at Apple could be the single biggest business risk of Berkshire because of Berkshire’s Apple exposure.
Survivable of course. But “What doesn’t kill you makes you wounded”.

Jim

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And if not, hopefully Luca has been buying.

My name is Luca
I work on the 14th floor
I work upstairs from Warren
You haven’t seen me before

If you see some large block trades
Some kind of buying or maybe some fades
Just don’t ask me what it was
Just don’t ask me what it was
Just don’t ask me what it was

I think it’s because I’m trading
I try not to telegraph
Maybe it’s because I’m buying
I buy what other’s sell, it is to laugh

We only buy until the price gets high
Then we wait for good news to fly
We only buy below intrinsic
We only buy below intrinsic
We only buy below intrinsic

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"But for someone like me, the big issue with Apple which Microsoft does not share is the Chinese exposure.

North American exposure looking pretty good and improving.

Apple smart phone market share in North America grew from 45% in Q1 2021 to 51% in Q1 2022.

iPhones shipped in Q1 2022 19.9 million, up 18% from 16.9 million in Q1 2021.

https://www.canalys.com/newsroom/north-america-smartphone-ma…

Apparently people still wanting to buy the darn things.

Install base has grown to 1.3 billion iOS devices worldwide (1 billion iPhones).

Services growing at a 20% clip, becoming more significant to overall top and bottom line, resulting in highest gross margins ever:

https://seekingalpha.com/article/4512995-apple-upgraded-to-a…

Fundamentals growing but stock price down?

Bright side is share count is going down as well.

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Coincidentally, Apple and MSFT are trading around the same fwd PE of 23.Interestingly, the 5-year total return CAGR for both are also close to 30% (figures from Morn*)

MSFT is a better business, Azure has a much longer runaway. At right price I would buy more MSFT.

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MSFT is a better business, Azure has a much longer runaway. At right price I would buy more MSFT.

You said Azure, I was like, wait… wasn’t that their music player. No, that was Zune. So forgettable…

You said Azure, I was like, wait… wasn’t that their music player. No, that was Zune. So forgettable…

Never forget Bob. RIP, death at the age of about nine months.
Leaving behind Comic Sans as its main legacy, other than a blot on the resume of its marketing manager, someone named Melinda.

"Bob received the 7th place in PC World magazine’s list of the 25 worst tech products of all time,
number one worst product of the decade by CNET.com, and a spot in a list of the 50 worst inventions published by Time magazine"

Jim

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You said Azure, I was like, wait… wasn’t that their music player. No, that was Zune.

I am pretty sure you are kidding or I don’t get your joke. In any case,

MSFT Cloud revenue, Q1-2021 revenue - $15.2 B and Q2-2022 revenue is $20.7; Gross margin is 71%.

Tim cook, great as he is, a good operational CEO, not a visionary. Satya, pivoted MSFT into cloud. Gates, Steve (he is pretty strong sales guy) are MSFT/ Windows lifers. Satya convinced the board and the management to pivot to cloud. He successfully steered the company from windows centric to cloud centric. He is 54.

Microsoft cloud business someday could hit $200 B revenue and with 70% gross margin or at net level could earn $50 go $60 B in other words Azure alone.