Warren Buffett’s Berkshire Hathaway stake in Apple is up by $40 billion since it bottomed out in March. Apple shares comprise 40 percent of Berkshire’s equity portfolio.
The “Oracle of Omaha’s” investment in the mega-tech company has helped Berkshire plow through the negative impacts of the coronavirus. Berkshire’s energy and insurance segments have taken an enormous hit during the pandemic.
Cathay Seifert, a CFRA Research analyst for Berkshire, said: “Had he stuck to his guns and only bought value stocks, that portfolio would not have done as well. At the end of the day, shareholders are going to applaud this move.”
The investment is a departure from Buffett’s typical investing philosophy. Berkshire initially purchased the first 10 million shares in Apple during May 2016. During four years, Buffett ignored his tech aversion and increased his shares to 245 million, which is worth more than $95 million. The move made Berkshire Apple’s second-largest shareholder behind Vanguard. The investment cost Berkshire nearly $35 billion, according to a 2019 annual disclosure letter.
Buffett was criticized for bailing on the airlines during their low time in the pandemic. But, the investor has beyond doubled his investment and profited $60 billion in his Apple holdings.
Apple shares have been up by more than 10 percent over the past month. Its gains for the year are over 32 percent. Last week, Apple stock was boosted when the tech giant won a landmark court case over an Irish tax dispute.
Beside Berkshire’s equity portfolio, Buffett’s company has invested in businesses that are less likely to have major impacts from the pandemic. Those businesses included Geico, railroad company BNSF, and Dairy Queen, among others.
Regarding his insurance stakes, Seifert added, “He manages some really large, really long reinsurance risk. There are some serious claims that have to be paid, and he needed to keep powder dry for that.”
During July, Berkshire’s Class A shares are up by more than 6 percent at $285,520 each. This has helped Berkshire trim its 2020 losses. Shares initially fell by 20 percent during the first quarter.