RE: Contrarian view16 May 2024 14:01
Finley, Berkshire Hathaway is a completely different company from what it used to be and $189bn is lot of money to try and invest "covertly". I appreciate that BH holds a large stake in Apple and that at the end of December its investment amounted to c5.8% of Apple's issued shares and c50% of BH's listed holdings and that, despite reducing its holding since December, its investment still amounts for c4.6% of Apple's outstanding shares and c40% of BH's listed holdings. BH's holding in Apple is currently valued at c$135bn (this is in addition to the $189bn in cash).
That's a lot of money to tie up in just one investment (especially when you don't have any management control) and is not the size of stake that you can generally offload quickly at a push. I also appreciate that BH does a lot of due diligence before it invests but, even so, you can never be 100% certain of what's going to happen in the future (especially with Cook's habit of being economical with the truth at times).
I would suggest that BH's invetsment in Apple is a departure from Buffet's (and the recently departed Munger's) historical investment approach and is, in part, driven by the mound of cash that BH has accumulated. I would also suggest that BH is likely to continue to sell down its Apple holding because it doesn't fit with Buffet's long-term investment ethos.
Historically, Buffet would never have considered tying up such a large amount of money in one company without at least having seats on the BoD, if not outright control. BH now finds itself no-man's land; heavily invested in one company (Apple accounts for c15% of BH's current market value), with no say in its management or control and having every buy/sell open to public scrutiny. I'm not suggesting that BH will necessarily dispose of its entire stake in Apple but I would be surprised if it didn't (want to) significantly reduce it, which only increases it's current cash "problem".