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Warren Buffett did something strange with his Apple stock
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Warren Buffett did something strange with his Apple stock

Warren Buffett speaks during Berkshire Hathaway’s annual meeting of shareholders on May 4, 2024 in Omaha, Nebraska.

CNBC

A coincidence or a master plan? Warren Buffett now owns exactly the same number of shares of Apple how he does it Coca-Cola after the technology share was reduced by half.

Many Buffett supporters made the strange observation after a regulatory “13-F filing” revealed on Wednesday evening Berkshire-HathawayBuffett’s stock holdings at the end of the second quarter. They showed an identical number of 400 million shares of Apple and Coca-Cola, Buffett’s oldest and longest stock position.

Some now believe that the “Oracle of Omaha” is finished selling his stake in the iPhone manufacturer.

“If Buffett likes round numbers, he may not plan to sell more Apple shares,” said David Kass, a finance professor at the University of Maryland’s Robert H. Smith School of Business. “Just as Coca-Cola is a ‘permanent’ holding for Buffett, so too could Apple be.”

The 93-year-old legendary investor initially purchased 14,172,500 Coca-Cola shares in 1988 and increased his stake in the following years to 100 million shares in 1994. So the investor has kept his Coca-Cola stake at essentially the same round number of shares for 30 years.

Two rounds of 2-for-1 stock splits in 2006 and 2012 increased Berkshire’s Coca-Cola holdings to 400 million shares.

Buffett said he discovered the iconic soft drink when he was just six years old. In 1936, Buffett began buying six Cokes at a time for 25 cents at his family’s grocery store and selling them in the neighborhood for five cents more. Buffett said it was then that he realized the product’s “extraordinary consumer appeal and commercial possibilities.”

Reduction of Apple share

Investing in technology high-flyers like Apple seems to contradict Buffett’s long-standing principles of value investing. However, the famous investor treats the company more like a consumer goods company like Coca-Cola than a technology investment.

Buffett praised the iPhone’s loyal customer base, saying people would rather give up their cars than their smartphones. He even called Apple the second most valuable company after Berkshire’s insurance group.

Therefore, some were shocked when it was announced that Berkshire sold more than 49 percent of its shares in the iPhone maker in the second quarter.

Many suspected that this was part of portfolio management or a larger overall market review, rather than an assessment of Apple’s future prospects. The sale reduced Apple’s share of Berkshire’s portfolio from nearly 50 percent at the end of last year to about 30 percent.

And at this round amount, the price seems to be in a preferred spot for Buffett for his most valuable and longest-held stocks.

Nevertheless, some people thought it could just be a coincidence.

“I don’t think Buffett thinks that way,” said Bill Stone, chief investment strategist at Glenview Trust Co. and a Berkshire shareholder.

But at Berkshire’s annual meeting in May, Buffett compared the two stocks and pointed out that the holding period for both was unlimited.

“We own Coca-Cola, a wonderful company,” Buffett said. “And we own Apple, an even better company, and we will, unless something really extraordinary happens, own Apple, American Express and Coca-Cola.”

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