Warren Buffett’s mistake: how much the legendary investor lost selling Apple stocks

Las tenencias del fondo de inversión de Warren Buffett en acciones de Apple aumentaron su valor hasta alcanzar la cifra record of USD 139,000 million el martes, cuando el precio de las acciones del manufacturer del iPhone y otras icónicos productos cerró en un nuevo máximo of USD 157 per unit. It was not a bad bet that the legendary investor made: since taking positions in the shares of the company, their value has increased by more than 4 times,

However, at this time, Buffett’s Apple bet story is not considered a dry hit. Particularly because of the most recent movements in your fund’s investment portfolio.

Buffett-owned Berkshire Hathaway spent around $ 36 billion between 2016 and mid-2018 to raise more than one billion Apple shares, adjusted for last year’s 4-to-1 split.

“It was probably a mistake” (Buffett)

But last year the decision was partially overturned. The company reduced its stake in Apple by 12%, to 887 million shares at the end of 2020, and that figure was unchanged as of June 30 this year according to Business Insider.

Buffett’s company made around $ 11 billion from the sale of Apple shares in 2020 alone, and earned an additional $ 2 billion from its divestitures between the third quarter of 2018 and the end of 2019.

However, if Berkshire had left its stake intact, its holdings would now be worth $ 158 billion, or $ 19 billion more than its current value. If you subtract the roughly $ 13 billion raised by Berkshire Hathaway and his team, the math shows that that decision a year ago cost him $ 6 billion in unrealized profits.

Buffett admitted at Berkshire Hathaway’s annual shareholders meeting in May that he was wrong to sell Apple shares in 2020.

“It was probably a mistake,” he said, adding that his partner and vice chairman at Berkshire, Charlie munger, had advised him not to cut the post.

Apple is by far the largest stake in Berkshire’s U.S. equity portfolio, accounting for 41% of its total value of $ 293 billion at the end of June. The tech bet is worth more than the company’s next four positions – Bank of America, American Express, Coca-Cola and Kraft Heinz – put together.

Berkshire’s 5.4% stake in Apple makes it the second largest shareholder in the group, after index fund giant Vanguard. Buffett’s company has received an average of $ 776 million in annual dividends from Apple over the past three years.

It’s no wonder Buffett has praised Apple on several occasions. In an interview on CNBC last year, he called it “possibly the best company” he has ever known, and in his latest letter to shareholders, he called it a “family gem.” He also congratulated the CEO of Apple, Tim cook, as “one of the best managers in the world” at Berkshire’s annual meeting this year, highlighting how much people love Apple products and how essential they are.

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