Ace investor Warren Buffett admitted that selling shares of Apple was probably a mistake on his part. The billionaire investors said that he sold shares of the iPhone manufacturer despite the fact that Berkshire Hathaway Vice Chairman, Charlie Munger was against the idea. “I sold some stock last year, although our shareholders still had their percentage interest go up because we repurchase shares. But that was probably a mistake,” Warren Buffett said during the annual shareholder meeting of Berkshire Hathaway earlier this month.
Berkshire Hathaway, at the end of the previous year, owned 907 million shares of Apple. This is down from 944 million at the end of the July-September quarter of the previous fiscal year. Warren Buffett added that Charlie Munger, his long-time business partner and friend, did let him know of his disapproval of the idea. Berkshire Hathaway sold Apple shares to pocket a massive $11 billion.
“It’s an extraordinary business,” Buffett said while discussing Apple’s business. “I do want to emphasize that in his own way, Tim Cook has handled the business so well,” he added. The market value of Berkshire Hathaway’s Apple stock holding, at the end of the previous year, was $120 billion. On the other hand, Warren Buffett and Charlie Munger have spent just $36 billion to acquire their 5.4% stake in the technology company from 2016 till 2018.
Earlier in his letter to shareholder, Warren Buffett had termed Apple as one of his most valuable assets. Berkshire Hathaway has sold stocks of Apple but their stake in the company has gone up. “Our cost for that stake was $36 billion. Since then, we have both enjoyed regular dividends, averaging about $775 million annually, and have also — in 2020 — pocketed an additional $11 billion by selling a small portion of our position. Despite that sale — voila! — Berkshire now owns 5.4% of Apple,” Buffett had explained.
The stake was increased without incurring any cost, aided by a repurchase of shares by Apple and Berkshire’s own buyback of its shares over the last two years. Apple is the only big tech name that Berkshire Hathaway owns more than 1% of. The share price of Apple has gained 1.5% so far this year. This comes on the back of the 83% jump recorded by the company in 2020.