Has Warren Buffett Gone Too Far on His Apple Investment?

In today’s episode of the 24/7 Wall St. Podcast Doug McIntyre and Lee Jackson discuss how outsized Warren Buffett’s position in Apple (Nasdaq:AAPL) | AAPL Price Prediction has become. A combination of a big bet, appreciating shares, and additional follow on investments mean Buffett’s Berkshire Hathaway (NYSE: BRK.B) current collects nearly $1b dollars a year in dividends from Apple alone. But has this become too big? The position is Buffett’s largest, by far. There is no easy way for Buffett to trim his stake without spooking the market, and sales that big don’t stay quiet for long.

Transcript:

So you’ve got a bunch of
people sitting there watching this.
How about our friend, our close friend,
Warren Buffett?
You know,
we’ve written about him for years and.
The guy’s a genius.
There’s no question about it.
But he maybe has gone a
little bit too deep.
We were checking the numbers.
And like I think I told you,
he has 905,560,000 shares of Apple stock.
It’s about…
42% of the holdings in Berkshire Hathaway,
it’s almost 6% of the total
float of Apple.
If he decides that it’s not
going the way he wants,
even to sell half of that
position could probably cut
the stock in half, maybe more.
I mean,
they can do what’s called a VWAP on
the stock and just trickle
it out every day for months
and months and months.
But-
Wall Street hears stuff like that.
And the minute that, say,
short sellers hear that
he’s trying to move a big position,
it’s not going to be good for the stock,
that’s for sure.
Look,
even if he has the most gifted
traders in the world, every quarter,
as you know,
he has to file what his holdings are,
what’s up and down.
So even if he’s the
stealthiest trader in the universe…
Everybody’s going to know if
he started to sell it.
And if there is one investor
in the world where buying
shares or selling them
affects the confidence of millions,
if not tens of millions of shareholders,
it’s Warren Buffett.
Absolutely.
I mean, and I’m surprised.
I mean, he’s a genius,
but there’s nothing in…
And we write about Buffett all the time.
He’s been very good to us.
But there’s nothing in his
portfolio that is anywhere
near that heavy.
Not Coke,
not any of his big holdings is
even close to that big.
And…
I don’t know if the stock crashes,
what does he do?
Does he just panic and sell
and further a crash?
Because you can bet that if
there’s some ruling from the government,
that stock will get hit hard,
whether Warren Buffett’s selling or not.
No, it’ll get hit very hard.
Absolutely.