Buffett awaits a bigger Apple slice
• Billionaire investor endorses technology company’s decision to buy back its own stock, saying this is the most productive use of cash
Billionaire Warren Buffett has been buying a boatload of Apple shares and suggested on Saturday that he would buy even more shares at the right price. At Berkshire Hathaway’s annual shareholder meeting, Buffett endorsed Apple’s decision to buy back its own stock, saying it was the technology company’s most productive use of cash.
Billionaire Warren Buffett has been buying a boatload of Apple shares and suggested on Saturday that he would buy even more shares at the right price.
At Berkshire Hathaway’s annual shareholder meeting, Buffett credited Apple with developing “extremely sticky” products to which consumers become attached and endorsed Apple’s decision to buy back its own stock, saying it was the technology company’s most productive use of cash.
“We would love to see Apple go down in price,” Buffett said.
Berkshire is Apple’s thirdlargest shareholder, behind Vanguard Group and BlackRock.
“I’m delighted to see them repurchasing shares,” Buffett said, just two days after he revealed having bought 75million additional Apple shares, and four days after Apple said it might repurchase $100bn in stock. At the end of 2017, Berkshire had 165.3-million shares.
“I love the idea of having our 5%, or whatever it is, maybe grow to 6% or 7% without our laying out a dime.”
Buffett said it was a mistake that he had not thought Alphabet’s Google and Amazon.com made sense as investments for Berkshire.
Buffett, 87, and longtime partner and fellow billionaire Charlie Munger, 94, also took pointed questions on China, Wells Fargo & Co and guns.
Buffett said it was unlikely that the US and China would come to loggerheads on trade and believed the countries would avoid doing “something extremely foolish”.
“The United States and China are going to be the two superpowers of the world, economically and in other ways, for a long, long, long time,” Buffett said, and any tension should not jeopardise the win-win benefits from trade.
“It is just too big and too obvious … that the benefits are huge and the world is dependent on it in a major way for its progress, that two intelligent countries [would] do something extremely foolish,” he said.
The Trump administration has drawn a hard line in trade talks with Beijing, demanding a $200bn cut in the Chinese trade surplus with the US, sharply lower tariffs and advanced technology subsidies, people familiar with the talks said on Friday. Buffett suggested US President Donald Trump should be an “educator-in-chief” on the invisible benefits of trade.
Munger answered a question on steel tariffs imposed by the White House by acknowledging that US producers were hurting. “Even Donald Trump can be right on some of this stuff,” Munger said.
Asked why Buffett was willing to do business with gun makers, he retorted: “I do not believe in imposing my political opinions on the activities of our businesses.” US corporate tax cuts were good for shareholders, Munger said, but he cautioned that the long-term effects of economic choices could be hard to gauge.
And Buffett predicted “bad endings” for cryptocurrencies, such as bitcoin. He said longterm US government bonds were a terrible investment because inflation would consume their returns.
Buffett defended Wells Fargo and its CE, Tim Sloan, when asked when Berkshire would ditch the bank, one of its largest common-stock holdings. Many shareholders applauded the question. The bank had committed the “cardinal sin” of incentivising employees into “kind of crazy conduct”, he said. US regulators fined the company $1bn for lending abuses.