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Berkshire Hathaway (BRK.B) has dropped 50% on multiple occasions says Warren Buffett, responding...
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Monday, March 4, 7:29 AM ETBerkshire Hathaway (BRK.B) has dropped 50% on multiple occasions says Warren Buffett, responding on CNBC to a question about Apple (AAPL). "You can't run a business to make the stock price go up every day," he says, though allowing Apple may have too much cash. Update at 9:07: Expanded comments from Buffett on Apple this morning.
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abauer6000@gmail.com
He's also repeating his point that managements job is to run the business, not manipulate the stock price.
Apple's management team knows what it's doing.
I'm staying long AAPL.
How about that: a tech giant is cheaper than an oil giant.
Why people still follow this guy is a puzzle, as the best years of BRK are well behind it.
"[...] how many people can have their investments drop 50% and still sleep at night or even stay in them?"
If you loose 50% of an investment and that makes you loose sleep at night then maybe you should look at not investing in such investment types. Maybe the less volatile 3% yearly movement is more your thing!
And besides, anyone who was to loose 50%, regardless if it's $5000 or $5 billion... it's STILL 50% and that's bad!!
1. So, in the market "crash" of 2008-2009, were you one of the sheep who sold everything at the bottom? Hopefully not. Buffet is looking back over a 50 year investing career. Over a period of time like that there are going to be financial panics that cause price dislocations, and stocks WILL have huge corrections. If you can't sleep at night with that, you don't have enough cash outside of the market or you are invested incorrectly. Or, you are one of those people who is "long" in one month, and "short" the next.
2. BRK continues to perform great, and is a very solid stable holding - almost like a mutual fund without the fee.
3. 50% is 50% - it has nothing to do with "still being rich." And, I doubt Buffet laughs when his stock goes down 50% - this is someone who has shown himself committed to increasing shareholder value over the long term.
Anyone that didn't understand is being obtuse, purposely or otherwise.
2. Obtain a better return on their cash position by not having to pay a dividend on the reclaimed stocks out of their American taxed cash position.
Then with a stock split (would resulting a larger number of potential buyer of the stock), they would be influencing the stock in a positive way which would also be in Apple's best interest.
All positive for the company & Apple stockholders
technical considerations can make a stock sell-of, but if that company continues to make loads of cash the stock will recover and that's what will also happen to Apple.
maybe WB is hinting that he may come in and buy some Apple stock who knows ? he picked up Bank of America at 6 $ when the stock got slaughtered and saw it double.
so why not put 15 bio$ in Apple, that will give him a 4 % holding and a seat on their board, he will then advise them how to spent their 130 $ bio cash, by buying more of their own shares, WB in a win, win situation.
Indeed, when Warren Buffet speaks, the world, and especially the financial world listens.
Here is my humble interpretation of Warren Buffet's comments on AAPL:
--Buffet seems to be advocating holding a stock long term. He likes to hold many stocks in Berkashaire Hathaway for ever!
--But the above approach may not be suitable for all investors. In my case I am maintaing 20% (mental) trailing stop based on the previous closing high. If the stock drops to or below the trailing stop, I would sell the stock at market on the openig the next day.
--In case of the uncovered put that I have written, I am maintaining 20% stop from the cost basis. Cost basis is the strike price of the uncovered put sold minus the premium received.
--Not necessarily the stock of AAPL will drop by 50% from its all time high of 705 reached in September 2012.
--Of course not all stocks are alike. Comparing Berkshire Hathaway shares with AAPL will be like comparing oranges and apples (no pun intended)!