For a long time, Berkshire Hathaway’s Warren Buffett was famous for having no interest in technology stocks. I don’t follow him closely enough to know his thinking on tech overall, but boy is he into Apple. CNBC says the “Oracle of Omaha” penned his annual shareholder letter over the weekend. In it, he named the “Four Giants” driving his firm. They include “Berkshire’s cluster of insurers,” the railroad business BNSF, the energy play BHE, and Apple. Only not in that order. Apple is the second of the Berkshire behemoths, after the insurers and ahead of the trains and power people.
Looking over the letter, his love of Apple seems to come down to two things: Tim Cook and stock buybacks. Of the CEO, Buffett wrote:
Tim Cook, Apple's brilliant CEO, quite properly regards users of Apple products as his first love, but all of his other constituencies benefit from Tim's managerial touch as well.
I guess that gives you a “friend of a friend” mention in the Berkshire missive. Buffett acknowledging Cook acknowledging Apple customers isn’t the only Berkshire nod of late. A little over a week ago, the firm’s vice chairman, Charlie Munger, spoke of folks who tote Apple products, saying.
I judge the strength of the company based on how much the customers love it… And I've got zillions of friends who they'd almost part with their right arm before they'd part with their iPhone. That's a hugely powerful position to be in.
As for the stock buybacks, Buffett notes that his firm’s ownership of Apple has gone from 5.39% of the Cupertino-company to 5.55%. “That increase sounds like small potatoes,” wrote Buffett:
But consider that each 0.1% of Apple's 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple's repurchases did the job.
I don’t know how into tech he is, but he is really into Apple.
