Berkshire halves Apple stake, boosts cash to $277B as it gets 'defensive'

I think the bears are vastly underestimating the size and power of the moat (or garden wall) that Apple has built. Apple&#x27;s brand loyalty is ludicrously high, but even the people who don&#x27;t care that much about the brand are way more trapped in the ecosystem than most people realize. Seeing a heavy Apple user try switching to Linux on their laptop was a real eye opener for me.<p>I&#x27;m bullish on Apple stock because they could afford to go a very long time without huge wins, and still be wildly powerful and in control of the tech lives of a huge percentage of the population. Apple also iterates and polishes over time until it&#x27;s the best, and they have plenty of time. Going bearish on Apple is a bad move IMHO.

Discussed yesterday: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=41147381">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=41147381</a>

Everyone here points to the high P&#x2F;E ratio as the reason to sell. That is simply the reason to sell NOW. The reason it&#x27;s being sold is he is obviously less bullish on the company. It doesn&#x27;t take much to understand why. The thing that led to Apple&#x27;s growth as a company and a stock is something called the iPhone. The thing that drove sales of the iPhone was the fact they were not just getting better, they were getting _different_. More cameras. Different kinds of sensors. Now they are just getting better. And less better each generation. Benedict Evans would call this the top of the &quot;S&quot; curve. It matters when selling someone a new phone in a new box is the main thing that generates your profits.<p>You can be a great company with great leadership and great products. You can&#x27;t defy the laws of the &quot;S&quot; curve and market saturation. It doesn&#x27;t matter how good you are. This is why Buffett and Co. are unloading. I wouldn&#x27;t be surprised if it all gets sold by the end of the year.<p>EDIT: I called this sale two weeks ago in a tweet:<p><a href="https:&#x2F;&#x2F;x.com&#x2F;jkingyens&#x2F;status&#x2F;1813214574436303114" rel="nofollow">https:&#x2F;&#x2F;x.com&#x2F;jkingyens&#x2F;status&#x2F;1813214574436303114</a>

Berkshire&#x27;s insurance float value is on the same order of magnitude. They underwrite both property insurance and cyber insurance. That&#x27;s a scary business to be in right now. Hurricanes, thunderstorms, tornados, cyber attacks have all become devastatingly more damaging recently. Maybe that&#x27;s a good reason to stockpile cash right now regardless of their outlook on any particular stock.

Warren Buffet taking giant profits and dumping half of their AAPL stock at the top of market prices is really another reason to be bearish on this AI hype which hasn&#x27;t materialised to anything profitable for 98% of AI startups and neither has it convinced Wall St that the massive operational costs were worth it. (The 2% is OpenAI, Anthropic and the other &gt;$15B AI startups.)<p>This just means that we should be getting a short term market correction. The ones that have benefited off of the hype are the Big Tech incumbents that will be just fine and those who dumped their skyrocketing shares on retail, which includes the folks at Nvidia.<p>At this time, some stocks and most AI startup valuations are extremely inflated and must correct and go down.

Be greedy when everyone else is cautious and be cautious when everyone else is greedy. When the bubble pops buy the good deals and wait for the recovery.

I wonder how this plays given the fearful&#x2F;greedy rule.

Someone’s going to rebuy at a lower price later

I wonder if this is less about Apple and more about beating the market. Are they seeing a big correction coming?

I bet in a few years the CEO of Apple will be replaced by someone who&#x27;s only interested in short-term gains, and the stock price may increase even higher at a sharp rate for like a decade or two. Then it becomes like Boeing or Intel; everyone hates it or it&#x27;s not relevant anymore.<p>If I win this bet, I&#x27;ll gain small satisfaction, and my all-index-fund portfolio will be, I don&#x27;t know, just fine?<p>edit: typo

It’s pretty simple. Can he get ~5% risk free from Uncle Sam or more than that in a year on the apple position. $14 billion a year you don’t have to pay any state taxes on. For as long as he decides to hold it. That’s like the net income of a bank like Wells Fargo.

[dupe]<p>More discussion: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=41147381">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=41147381</a>

Apple bet big on proprietary ARM chips, but now Qualcomm has commoditized this space.<p>Apple followed Meta into VR&#x2F;AR without a killer app.

Might this have anything to do with Apple starting to reposition production outside of China?

At Buffett’s age, I would shift more to cash as well. ;)

Good, hopefully this lifts some of pressure to monetize us