Warren Buffett's $18 Billion Mistake

In the fourth quarter of 2020, Warren Buffett and Berkshire Hathaway Inc. (NYSE: BRK-B) trimmed 6% from the company’s holdings in Apple Inc. (NASDAQ: AAPL) stock. The sale realized about $11 billion for the Berkshire portfolio.

Buffett began buying Apple stock in 2016, and he has lightened his position by about 12% over the past few years, according to a report in Markets Insider. On Wednesday, when Apple posted a new all-time high stock price, Buffett’s holdings in the stock were valued at around $128 billion.

Had he just bought and held all his portfolio’s Apple stock, that holding would have been worth about $146 billion, a difference of $18 billion. Berkshire had spent about $36 billion on purchases of Apple stock, so even with the lower number of shares, Buffett has more than tripled his investment. Had he bought and held, he would have quadrupled his money.

Buffett admitted that he went against partner Charlie Munger’s advice not to sell Apple (or Costco) stock. Shares in both companies have added more than 8% so far in 2021, following a rough start. Costco stock had lost about 17% of its value by early March, and Apple had dropped 12%. Since then, Apple stock has risen by more than 23% and Costco stock has added 31%. A mistake indeed.

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