Berkshire Hathaway: How To Think About Apple The Way Buffett Does


  • Berkshire Hathaway’s huge position in Apple Inc. reflects many Buffett principles: brand power, low capital needs, and finding growth in already large companies with good track records.
  • One principle is starting small while testing a premise, ramping up rapidly as premise is strengthened, and having prices in mind to stop buying or sell a bit.
  • Making Apple one of Berkshire’s “big four” treats it as a subsidiary, meaning an intent to ignore price and focus on operating results including “look through” earnings.
  • Ignoring quarterly results, Buffett likely sees Apple as a combination of great management, solid growth, and optimal shareholder-friendly use of cash flow with large buybacks and small dividend.
  • Buffett’s earlier model for Apple might be Coca-Cola: strong brand and management and a position now 94.5% cap gains with dividend yield of 55% on cost.

Conference On Issues Affecting U.S. Capital Markets Competitiveness

Chip Somodevilla

Apple Inc. (NASDAQ:AAPL) has played an important role in the evolving structure of Berkshire Hathaway Inc. (BRK.A, BRK.B). It was the company that pulled Berkshire into the age of technology. Benefiting from the advantage that

Coca-Cola stock price
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Apple stock price
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Disclosure: I/we have a beneficial long position in the shares of BRK.B, GOOG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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