On Apple, Warren Buffett May Ignore the Noise—but Not the Facts



Apple is recovering

American tech giant Apple (AAPL) seems to be on the path to a slow but consistent recovery in 2019 so far. The stock fell 30.1% in the quarter that ended in December 2018 compared to the 14.0% and 17.5% falls in the S&P 500 Index (SPY) (VTI) and the NASDAQ Composite Index (QQQ), respectively.

Its steep fall was primarily the result of reports indicating its deteriorating iPhone sales, especially in the Chinese market. The company confirmed its iPhone sales troubles on January 3 when it cut its guidance for the first quarter of fiscal 2019.

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Warren Buffett reduces Apple holdings

On February 14, Warren Buffett’s Berkshire Hathaway (BRK.A) filed its latest 13F filings with the US Securities and Exchange Commission and disclosed the changes in its holdings in the fourth quarter of 2018. According to the latest filings, in the quarter, Buffet’s investment company sold ~2.89 million Apple shares, reducing its total investment in AAPL by 1.1%. In the previous quarter, Berkshire Hathaway bought ~522,902 Apple shares.

Buffett is well known for ignoring unnecessary market noise, which tends to cause many investors to make investment decisions in a panic. However, he might not have been keen on ignoring the real issues Apple’s Product segment was facing after they were confirmed by multiple sources and analysts in the fourth quarter—which may be why Berkshire Hathaway decided to cut its Apple holdings.

Continue to the next article, where we’ll compare Buffett’s decision on Apple with David Einhorn’s.


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