Warren Buffett Calls Apple as Four Giants in Annual Letter Calls

Warren Buffett said he now considers tech giant Apple one of the four pillars driving Berkshire Hathaway, the conglomerate of mostly old-economy businesses he’s assembled over the last five decades.  In his annual letter, the 91-year-old investing legend listed  under our Four Giants’ heading and even called the company the second-most important after Berkshire’s cluster of insurers, thanks to its chief executive.

Tim Cook, Apple brilliant CEO, quite properly regards users of products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well. The “Oracle of Omaha” made clear he is a fan of Cook’s stock repurchase strategy and how it gives the conglomerate increased ownership of each dollar of the iPhone maker’s earnings without the investor having to lift a finger.

As measured by its year-end market value, Apple – our runner-up Giant is a different sort of holding. Here, our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But consider that each 0.1% of 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple repurchases did the job.

Berkshire began buying Apple stock in 2016 under the influence of Buffett’s investing deputies, Todd Combs and Ted Weschler. By mid-2018, the conglomerate accumulated 5% ownership of the iPhone maker, a stake that cost $36 billion. Today, the investment is now worth more than $160 billion, making up 40% of Berkshire’s equity portfolio