Berkshire bought own stock, added to Apple pie: Buffett
Warren Buffett, the billionaire chairman of Berkshire Hathaway, on Thursday said the conglomerate has bought back its own stock for the first time since 2012 and has added a “little” to its already huge stake in Apple.
Buffett also said investors are better off owning a basket of stocks than 30-year bonds and other fixedincome securities, as a strong US economy bolsters corporate profits despite higher costs from tariffs, which have also affected Berkshire.
“I don’t know when to buy stocks, but I know whether to buy stocks,” Buffett, celebrating his 88th birthday, said on CNBC television.
“Business is good across the board,” he added. “It was good two years ago, it keeps getting better.”
Berkshire has more than 90 businesses in the insurance, energy, food and retail, industrial, railroad and other sectors, and invests in companies such as Apple, Wells Fargo & Co, Bank of America and Coca-Cola.
A buy-back policy announced on July 17 gave Buffett, who has gone two and a half years since a major acquisition, a new way to deploy Berkshire’s $111.1 billion of cash and equivalents.
Berkshire said the policy would free Buffett and vice-chairman Charlie Munger to repurchase stock when the price was below Berkshire’s “intrinsic value,” a determination that would be made “conservatively.”
Berkshire’s old policy forbade buybacks unless the price exceeded 1.2 times book value per share. The Omaha, Nebraska-based company recently traded at around a 1.45 times multiple.
Buffett said “we’ve bought back a little” stock since the change, and that he and Munger need “a big enough discount” to ensure that long-term shareholders are better off.