Buffett's Berkshire Keeps Buying More of Apple
August 14 2018 - 6:39PM
Dow Jones News
By Mengqi Sun
Warren Buffett's Berkshire Hathaway Inc. continued to load up on
technology giant Apple Inc. in the second quarter.
Berkshire increased its holdings of Apple stock by 12.4 million
shares in the quarter, taking its stake to $46.6 billion by the end
of June, according to a new securities filing on Tuesday.
Mr. Buffett's firm has largely avoided investing in the tech
sector, even during a run-up in technology shares in recent years.
One of the few exceptions has been Apple, which Mr. Buffett has
said makes a consumer product he understands.
Berkshire has repeatedly added shares of the iPhone maker,
including more than doubling its stake in early 2017. As of March
31, Berkshire was Apple's second-largest shareholder after Vanguard
Group, holding 4.96% of Apple stock.
In the second quarter, Berkshire also sold some shares in Wells
Fargo & Co. while adding to its shares of Goldman Sachs Group
Inc.
Berkshire prefers to keep most of its holdings under 10% to
avoid increased regulatory requirements. This self-imposed limit
caused it to adjust its holdings in the banking and airlines
industries, the company said.
Berkshire sold 4.5 million shares of Wells Fargo in the second
quarter and bought 2.3 million shares of Goldman Sachs. The firm
also bought 9.9 million shares of U.S. Bancorp.
The firm adjusted its airline holdings in the quarter. It
sharply increased its stakes in Delta Air Lines Inc. and Southwest
Airlines Co., while reducing its ownership in American Airlines
Group Inc. and United Continental Holdings.
Mr. Buffett famously derided investing in airline stocks after
suffering initial losses from a foray into the former USAir Group
Inc. Berkshire bought $358 million of preferred stock in USAir in
1989, but the investment lost value in subsequent years.
"I plunged into the business at almost the exact moment that it
ran into severe problems," Mr. Buffett wrote in his 1990 letter to
shareholders.
Berkshire sold its stake "for a hefty gain" in 1998, Mr. Buffett
wrote in his 2007 letter, but he said he still regretted the
purchase.
"The worst sort of business is one that grows rapidly, requires
significant capital to engender the growth, and then earns little
or no money. Think airlines," he wrote.
Still, the airline industry got a vote of confidence from Mr.
Buffett in 2016. Berkshire bought shares in all four airlines that
year.
(END) Dow Jones Newswires
August 14, 2018 18:24 ET (22:24 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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