Warren Buffett has gone from being an AAPL skeptic to a massive investor in the Cupertino company. As AAPL looks set to break $500 this morning, a new report today summarises just how successful that investment has been in a single sentence …
Here’s how Business Insider’s Theron Mohamed puts it:
Warren Buffett’s Berkshire Hathaway has made more money on Apple in four years than either company was worth 20 years ago.
Here’s how that was calculated:
The famed investor’s conglomerate spent about $35 billion to acquire around 245 million Apple shares between 2016 and 2018. Its 5.7% stake in the tech titan was worth about $122 billion as of Friday’s close, meaning it has racked up an $87 billion investment gain to date.
Apple’s market cap plunged below $70 billion during the financial crisis, and only recovered to north of $87 billion in March 2009, according to YCharts. It has mushroomed more than 20-fold since then to a record $2.1 trillion on Friday.
Meanwhile, Berkshire’s market cap was less than $87 billion as recently as October 2000, compared to almost $500 billion today, YCharts data shows.
For a long time, Buffett didn’t invest much in AAPL because he said the company’s future was too unpredictable.
We held very few [AAPL shares] in the past and we’re likely to hold very few in the future. Coca-Cola is very easy for me to come to a conclusion as to what it will look like economically in five or 10 years, and it’s not easy for me to come to a conclusion about Apple.
He changed his mind in 2016, with a billion dollar investment. He later said that while he had originally thought of AAPL as a tech stock, he now simply sees it as a hugely popular brand with enormously loyal customers. Earlier this year, he said that Apple is ‘probably the best business I know in the world.’