Buffett: Berkshire bought 'more Apple than anything else' over a year ago

Terry Joseph
March 2, 2018

In a recent interview with CNBC, the chairman and CEO of Berkshire Hathaway Warren Buffett has explained why Apple is such an attractive investment, while highlighting that he has invested in Apple stock more than anything else in the previous year. When they're sold, you pay tax on that.

The new law, greatly touted by President Donald Trump, lowered the tax rate paid by United States corporations from 35% to 21%, allowing many to undertake major new outlays and others to book significant fiscal gains.

The long-time bull on US companies and the economy issued his latest letter to Berkshire Hathaway Inc shareholders on Saturday. "The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code", Buffett wrote.

"Including gyrations of that magnitude in reported net income will swamp the truly important numbers that describe our operating performance". He called the gain "nonetheless real - rest assured of that". And he's found himself at odds with Trump on several policy issues.

Buffett's main goal in 2018 is to find a worthy investment for the $116 billion he has in cash. "At Berkshire, in contrast, we evaluate acquisitions on an all-equity basis, knowing that our taste for overall debt is very low". 'Indeed, price seemed nearly irrelevant to an army of optimistic purchasers'.

Buffett and Munger are known for their aversion to risk.

Buffett said that in starting the venture, "we have the flawless partnership" with JPMorgan CEO Jamie Dimon and Amazon CEO Jeff Bezos. "But Charlie and I sleep well".

He also said Berkshire remains a net buyer of company stocks despite relatively high prices. "We also hold it today after a million or so "partners" have joined us at Berkshire".

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Given that paltry yield, Buffett and Protégé made a decision to sell the bonds and instead purchase Berkshire B shares. Upwards of 40% of one of Buffett's key reinsurance companies is now flowing each year from a deal with IAG that helps underpin the financial viability of both companies.

"We had about $100 billion of unrealized gain in equities".

Market pundits across the world like Buffett's straight talk. The 165 million Apple shares that Berkshire owns were worth about $29 billion.

His latest newsletter reports that Berkshire's net earnings rose previous year from $24.07 billion to $44.94 billion.

That said, "no company comes close to Berkshire in being financially prepared for a $400 billion" mega-catastrophe - known as "mega-cat".

"It is a awful mistake for investors with long-term horizons - among them pension funds, college endowments and savings-minded individuals - to measure "risk" in their portfolio's ratio of bonds to stocks", Mr Buffett warns.

"The bet illuminated another important investment lesson: Though markets are generally rational, they occasionally do insane things".

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