Why we’ll never know who made Berkshire Hathaway’s epic Apple call

Yahoo Finance will host the live stream of Berkshire Hathaway’s shareholder meeting on May 6, 2017.

Berkshire Hathaway, the global conglomerate and investment behemoth led by Warren Buffett, has historically shied away from buying technology stocks. Today, Berkshire Hathaway is the largest owner of Apple stock.

Berkshire began investing in Apple shares during the first quarter of 2016. Berkshire gradually added to its position.  At the end of 2016, Berkshire owned 57.4 million shares of Apple (AAPL). In his annual shareholder letter, Buffett noted that they purchased the shares for an average cost of just over $110 per share in 2016.

Buffett revealed to CNBC in late February that Berkshire continued to purchase Apple shares in 2017, with the latest number being 133 million shares, a position currently valued at more than $19 billion.

Apple’s stock has gained 24% year-to-date. The stock was most recently trading above $144.

No one at Berkshire wants to be wedded to an investment

Buffett has previously hinted that “one or more” of his young investment deputies — Todd Combs and Tedd Weschler — were behind that investment. Combs and Weschler each manage more than $10 billion for Berkshire.

During an interview with Yahoo Finance’s editor-in-chief Andy Serwer, Berkshire’s investment gurus declined to reveal who’s really behind the Apple idea.

“We like to keep people guessing on that stuff,” Weschler said.

Ted Weschler and Todd Combs

Combs pointed out that one of the advantages of not running a fund anymore is not being beholden to revealing your every move in monthly investor reports.

“I never liked talking to my LPs about ideas I had,” Combs said. “And I think you guys are both the same. Because then you become somewhat wed to it. It’s harder to change your mind over time. You become pre-committed to your positions and so forth. So that’s always been my stance.”

Weschler added that once you put it on the record, you can become “too wedded” to your thesis and that’s “dangerous.”

Whether you like it or not, if you have influence and people know how you’re investing, then some people may attempt to replicate your moves. And suddenly, you become responsible for explaining every move. This in turn comes with unwelcome pressure that may disrupt your ability to make unfettered investment decisions.

Warren Buffett

Keeping the decision makers anonymous helps to keep some of this pressure off, which is fine because Berkshire Hathaway has never been in the business of giving out stock picks.

“We’re not giving investment advice to people,” Buffett said. “We don’t want to be talking about X where, one way or another, you get a slant on it by the time the interview’s done… We could change our mind next week or a month later, and somebody’s out there that thinks we’re giving investment advice. It doesn’t make any sense.”

For now, all we know for sure is that at least someone at Berkshire Hathaway thinks Apple is a good investment.


Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.

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