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In One Chart - May 4, 2018

In One Chart: Why Buffett Doubled Down on Apple

Ahead of today’s shareholder conference, CEO Warren Buffett disclosed that Berkshire Hathaway (BRK.B) purchased 75 million shares of Apple (AAPL), adding to the over 165 million shares the company already owned.

Buffett defended his increased position, noting that Apple is the most profitable company in the US by a healthy margin. He stated Apple “earns almost twice as much as the second most profitable company in the United States.” (Apple’s TTM Net Income is currently 53.32B, Verizon Communications (VZ) is second at 31.20B)

The chart below paints a vivid picture, justifying both Berkshire’s increased position in Apple, and his exit from IBM (IBM).

Known for his longview investing philosophy, Buffett was dismissive of the fact that the iPhoneX delivered lackluster sales — an issue that has worried most investors. “The idea that you’re going to spend loads of time trying to guess how many iPhone X’s … are going to be sold in a 3 month period totally misses the point,” Buffett said.

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