Despite Berkshire Selling 605,000,000 Apple Shares, Buffett Still Says It's a 'Wonderful Company'

Last year Warren Buffett, the "Oracle of Omaha," fielded a question about the company's investment in Apple (AAPL). Despite selling nearly 605,000,000 shares to date, Buffett affirmed that Apple remains Berkshire's largest common stock holding. His explanation offered a window into his enduring investment philosophy: “Charlie [Munger, Buffett's late longtime business partner] and I look at common stocks or marketable equities as businesses.”

This perspective encapsulates Buffett’s approach to investing, one that prioritizes viewing stock purchases as acquiring pieces of businesses rather than engaging in market speculation. It’s a principle that has guided his stewardship of Berkshire Hathaway (BRK.A)(BRK.B) for decades and shaped a conglomerate valued at over $800 billion.

The Apple of Buffett’s Eye

Buffett’s relationship with Apple, which began in 2016, exemplifies his disciplined approach. Despite initially shying away from technology stocks, Buffett was drawn to Apple by its business fundamentals, particularly its strong brand, customer loyalty, and robust cash flow. These qualities align with his preference for "wonderful companies" that dominate their industries and generate consistent returns.

By 2024, Apple had grown to become a cornerstone of Berkshire’s portfolio, not just for its financial performance but as a business Buffett deeply respects. His comment that “we can buy really wonderful companies in the market as businesses” underscores his admiration for Apple’s operational excellence and economic moat. While selling shares might seem contradictory, it reflects a calculated balancing act to maintain portfolio health without undermining long-term convictions.

A Legacy of Viewing Stocks as Businesses

Buffett’s method of treating stocks as businesses is not new. From Coca-Cola (KO) to American Express (AXP), his portfolio is a testament to his ability to identify companies with enduring competitive advantages. Whether it’s Dairy Queen or See’s Candies, he evaluates companies based on their management, brand strength, and ability to generate shareholder value over time.

This mindset also highlights Buffett’s resistance to market trends. By focusing on businesses’ intrinsic value rather than stock price fluctuations, he has avoided speculative bubbles and stayed grounded in fundamentals. This principle has also shaped the way he educates Berkshire shareholders, emphasizing patience, discipline, and a long-term outlook.

The Buffett Persona: Simple Yet Strategic

Buffett’s ability to distill complex financial concepts into simple, relatable ideas has endeared him to investors worldwide. His analogy of stocks as businesses resonates not only because it’s effective but also because it reflects his broader personality—a blend of practicality, humility, and unwavering focus.

This clarity of thought is mirrored in his management of Berkshire Hathaway. Known for giving his managers significant autonomy, Buffett’s trust in people and principles has allowed the conglomerate to thrive across industries. Whether it’s insurance, railroads, or technology, Buffett’s leadership is rooted in finding and backing great businesses run by great people.

Lessons for Investors

Buffett’s insights at the 2024 meeting reaffirmed key tenets of his investment philosophy:

• Think Like an Owner: Treat stocks as pieces of businesses, not as abstract market assets.
• Focus on Quality: Invest in companies with strong brands, excellent management, and sustainable competitive advantages.
• Play the Long Game: Avoid speculative behavior and commit to long-term value creation.

Buffett’s decision to maintain Apple as Berkshire’s largest holding is a testament to his belief in the company’s enduring strength. It also serves as a reminder of his disciplined approach: buy businesses you understand, hold them for the long haul, and evaluate them on their merits, not market whims.

Conclusion

At 94 years old, Buffett’s wisdom remains as relevant as ever. His ability to adapt while staying true to his principles continues to guide Berkshire Hathaway’s success. Apple’s place in the portfolio, along with Buffett’s unwavering view of stocks as businesses, encapsulates the essence of his investing genius. As he and Charlie Munger showed time and again, the best investments are those rooted in understanding and conviction, not speculation—a lesson that will resonate with investors for generations to come.