Warren Buffett’s last laugh, #352? Buffett has been the target of cheap jibes and criticism from fund managers and others as the shares of his Berkshire Hathaway have fallen behind the megatech driven surge on Wall Street this year.
Low tech, no tech, old investment ideas, are some of the criticisms, ignoring the huge holding in one Megatech in particular (hint: it’s a Pink lady).
The critics have ignored Berkshire’s holding in Apple, especially earlier this year in March – June period as markets wallowed and then started rebounding – led by Apple.
But now – well its a headliner as Apple’s surge to the top of the most valuable company in the world list has been backed by the stunning June quarter performance.
Now everyone, critics included (but mostly silent) have noticed the fact that Berkshire Hathaway owned 245,155,566 shares of Apple as of March 31, according to the latest 13-F (Fund manager) filings with the Securities and Exchange Commission, making it the Apple’s second-largest shareholder with 5.73% of the shares outstanding.
The largest is a collection of funds controlled by Vanguard, so Buffett and Berkshire are really the largest single shareholders in Apple.
Apple’s performance last Friday silenced many of Buffett’s critics. The shares leaped more than 10.4% on Friday to a record close of $US425.04 (and over $US427 in after-hours trading).
The 10.4% jump added more than $US160 billion in value to Apple shares in a day taking the total to more than $US1.8 trillion.
Berkshire Hathaway’s stake jumped more than $US9 billion on Friday alone!
With the stock up $US170.32, or 67%, since the end of March, the stake’s value has increased by over $US40 billion. In comparison, the Dow has rallied around 20% since the end of March.
The gain to June 30 was solid – around $Us20 billion or so, and there’s a similar gain this quarter. Berkshire reported big losses for the March quarter because of then newish US accounting standard that forces gains and losses on assets to be taken into the P&L account above the line and not treated as one-off items.
The gains in Apple, the holdings in banks and other companies will more than offset those March quarter losses, but Berkshire will still report a weak June quarter this weekend because its real economy businesses in insurance, manufacturing, railroads, retailing, food distribution, real estate, and housing were all badly hit by COVID-19 and the associated lockdowns.
