Published: Thu, May 10, 2018
Research | By Wilma Wheeler

Warren Buffett Speaks About Why He Chooses Apple Stock

Warren Buffett Speaks About Why He Chooses Apple Stock

Likening Bitcoin demand to the tulip bulb mania in 17 century Holland, Buffett, chairman and chief executive of Berkshire Hathaway, said the mystique behind the crypto-currency has caused its price to surge. "When you're buying nonproductive assets, all you're counting on is the next person is going to pay you more because they're even more excited about another next person coming along". "People like to speculate, they like to gamble".

A cryptocurrency conference, Bitcoin Day in Omaha, was coincidently scheduled during the same weekend as the Berkshire Hathaway annual shareholder meeting, but organizers had to cancel after the event's location host cited "conflict" with events on the same day. He likened it to Oscar Wilde's definition of fox hunting, calling it "the pursuit of the uneatable by the unspeakable".

"We bought about five per cent of the company", he said.

Also speaking on CNBC's early morning talk show Squawk Box was Microsoft co-founder Bill gates, who agreed with Buffett on the value of Apple's stock.

Buffett renewed his desire to spend some of Berkshire's low-yielding cash on a major acquisition.

Berkshire Hathaway saw its cash balance reach $108 billion in the first-quarter. I'd love to own 100 percent of it.We like very much the economics of their activities. With the news kickstarting the new week, CNN Money reported that Apple shares rose almost 2 percent on Monday and that the world's biggest tech company by market cap is now worth more than $940 billion. It now has a 5% stake in the iPhone maker, trailing only Vanguard Group and BlackRock. Warren was appreciative of the buyback programme too and CNBC reported that he said, "When I buy Apple, I know that Apple is going to repurchase a lot of shares", he said.

Not only did Apple made iPhone sales in March quite strong, the CEO, Tim Cook boasted during a subsequent earnings conference, saying that the iPhone X was the most popular iPhone model for every single week during the quarter. I'd love to own 100% of it.

He also said "The truth is that I've watched Amazon from the start and I think what Jeff Bezos (Amazon CEO) has done is something close to a miracle".

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