Kunpeng Plan As the "god" of the world, Warren Buffett has practiced the words "value investment" all his life.
Apple is Buffett's "finale", and the rise and fall of this company can easily affect the outside world's evaluation of Buffett.
On February 15, Warren Buffett's company Berkshire Hathaway announced its U.S. stock position report for the fourth quarter of 2023 (13F), which showed that Berkshire bought about 10 million shares of Apple in the fourth quarter, and the market value of Berkshire's Apple was about 18 according to the average price during the reporting period2.2 billion US dollars (about 13.1 billion yuan).
This time, it caused an uproar in the market. As Warren Buffett's "favorite", it is easy to give the outside world a bearish signal by choosing this position to cash out. In fact, there are quite a few ** who think so.
They believe that with the continuous growth of U.S. technology stocks, considerable risks have accumulated, and the bubble of U.S. technology stocks may burst at any time, and Warren Buffett's ** is a signal.
Of course, judging from Buffett's overall holdings, this view also seems untenable.
According to Berkshire's overall holdings in the fourth quarter, as of the end of December 2023, Berkshire's total U.S. stock holdings were about $347 billion, an increase of about $34 billion from $313 billion in the previous quarter. The top 10 holdings accounted for 9292%, of which Apple alone accounted for 5019%。
Berkshire's holdings of Apple are worth about $180 billion.
In other words, the proportion of apples this time is relatively small.
In addition, according to the position disclosure, Berkshire's top ten heavy stocks are: Apple, Bank of America, American Express, Coca-Cola, Chevron, Occidental Petroleum, Kraft Heinz, Moody's, Davita Healthcare, and Citigroup. Investors familiar with Warren Buffett know that in the past seven or eight years, there has been almost no major change in his heavy stocks, and Buffett increased his holdings of Chevron by 16 million shares in the fourth quarter, and a series of ** in previous quarters.
From this, we can judge that Buffett's fourth quarter **Apple doesn't seem to explain anything, just some reasonable allocation of the company's **. For the proportion of his position, the amount of this change is not too large, that is to say, Buffett's ** behavior this time is likely to be over-interpreted by the market.
Will Warren Buffett massively reduce Apple's holdings in the future? Will it change the "bias" against tech stocks?
Missing the feast of technology stocks, Buffett has been criticized by the outside world. Ten years ago, the success of Amazon and Facebook made Buffett have been stuck in the argument of "cheap and old".
Warren Buffett once said, "High-tech companies are changing so fast that I have no idea whether the sustainable competitive advantage of companies will be maintained in the next decade." ”
Based on this, he has always maintained a "respectful and distancing" attitude towards technology companies.
It wasn't until 2016 that Buffett's choice of technology stocks seemed to change.
In 2016, Warren Buffett made up his mind to ** Apple, and his behavior was quickly ridiculed by Wall Street. From the perspective of performance, Apple happened to be at the inflection point of performance at that time, and Wall Street was not a few bearish voices on Apple at that time, so this decision was considered a sign of stupidity.
But in the face of Wall Street's ridicule, Buffett ignored it.
Relevant statistics show that from 2016 to 2018, Berkshire spent a total of $36 billion, ** a 5% stake in Apple, and this investment ultimately proves Buffett's vision.
Over the next four or five years, the investment helped Berkshire shareholders earn at least $100 billion.
In a later interview, Warren Buffett explained the reason for his ** apple,He believes that Apple is a consumer goods company that uses technology and that it belongs to the consumer goods industry.
In other words, Warren Buffett's logic for Apple is still not technology, but consumption.
At Berkshire's shareholder meeting in 2021, he did not hesitate to praise Apple, arguing that Apple is an extraordinary company, they have excellent management, their products have loyal fans around the world, Apple's brand and products are outstanding, and the profit margins are very high. At the same time, mobile phones are an essential and must-have in the lives of all young people.
At Berkshire's shareholder meeting in 2023, Buffett further said that he made some mistakes two years ago and sold some apples**, and that decision was stupid at the time."
Today, Berkshire's stake in Apple** accounts for more than 50% of its total holdings, which are about $165 billion based on the current share price.
Although Apple's stock price performance has not been satisfactory recently, it has fallen significantly behind in the camp of large technology companies in the United States, and has lost the crown of the most valuable company in the United States, Kanjian Finance believes that in the past five years, the possibility of Berkshire's large-scale ** Apple is still very small, and before Apple's fundamentals have changed significantly, Berkshire's position will probably not be significantly adjusted.
Aside from the position of Apple, Buffett's holding style will most likely not change significantly in a short period of time.
The preference for consumer stocks, energy stocks, and bank stocks has also benefited Buffett.
Stretching the long-term axis, consumption and energy have always been Berkshire's number one choice, especially after Apple, during the epidemic, Buffett's preference for energy stocks has been very obvious.
As the most cyclical industry, Buffett has not suffered without its hardships.
Back in 2008, Berkshire lost a lot of money on its investment in ConocoPhillips, and in 2014 it also had a hard time in oil stocks.
At the time, Buffett also assured shareholders that "lessons have been learned."
But since 2021, Buffett's investment in oil stocks has entered a state of "madness".
As it turns out, Buffett was not wrong in his choice.
According to statistics, oil and gas giants such as ExxonMobil, Chevron, Shell, Total and BP earned a total of nearly $200 billion in high profits in 2022, which is 50% higher than the annual record set more than a decade ago.
But this ultra-high return did not last.
After entering 2023, the revenue of many oil and gas companies began to fall, and the stock price entered a sideways period, but Buffett did not choose to take profit, but continued to raise.
Occidental Petroleum, in particular, has now become the largest shareholder of Occidental Petroleum. And this increase has not stopped, and in October 2023, Berkshire continued to increase its holdings of 3.9 million Occidental Petroleum shares at an average of about $63 shares.
Berkshire has even received regulatory approval to acquire up to 50% of the company.
Kanjian Finance believes that the most important reason why Buffett dares to make a large investment in stone in the past two years is that it is difficult to increase production capacity.
Previously, Chevron's CEO Mike Wirth said in an interview: "You're thinking about a 10-year capital investment and it will take decades to deliver returns to shareholders, and the current policy environment is that countries around the world are saying: We don't want these products." ”
In the fourth quarter, Berkshire continued to increase its holdings in Occidental Petroleum and Chevron, which seems to confirm this view.
It is reported that Berkshire has received permission from the SEC for the second consecutive quarter to temporarily keep one or more of its holdings confidential. It occasionally asks for such treatment when it makes large investments, including billions of dollars in shares in Chevron, ExxonMobil, IBM and Verizon Communications.
Kanjian Finance believes that as one of Buffett's favorites, his actions in energy stocks will inevitably be no less. But looking at its overall holdings, a large-scale movement is almost unlikely. As Buffett's "finale", the current portfolio structure may continue until his retirement.