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Warren Buffett: "Wary" of Apple? (Kind of, Sort of)

|Includes: AAPL, The Coca-Cola Company (KO)

Sunday night, at around 8:30 p.m., California time, a Bloomberg headline caught my attention.

Buffett Says Less Sure About Outlook for Apple Than Coca-Cola

The story, at the time, was light on the details. It contained about two sentences, essentially reinforcing the provocative headline. Bloomberg does this often. It posts a snazzy headline and provides subsequent content that is light on context. I am not a fan of the practice. It has freaked me out on more than one occasion. Later, usually within an hour or so, Bloomberg updates the story. I guess the initial headline is Breaking News, followed by the skinny as they get it? 

After the update, the new headline read:

Buffett Remains Wary of Apple Compared with Coca-Cola

The prime takeaway from the story: Buffett has more confidence in forecasting Coca-Cola's (NYSE:KO) future than he does Apple's (NASDAQ:AAPL). Because he only tends to invest in companies whose futures he thinks he can reasonably predict, he owns more than a few shares of KO and none of AAPL as well as other "electronics makers." (I am not sure if Buffett or Bloomberg used those words, but it's a very 1980's way to refer to tech companies!).

Why is this "news?" First, because Buffett said it. But, clearly, his statement simply reflects what has been his philosophy for decades. And it's hardly earth-shattering. Investors know what to expect from Coca-Cola -- nice, steady growth and a reliable dividend. Nothing too volatile. Just a solid core holding for most any portfolio.

Had you invested $10,000 in KO two years ago, you would have $15,111 today, assuming you reinvested dividends. The same play on AAPL would have turned 10K into $30,713. On paper, Apple, obviously, worked out better. That does not mean it's automatically the better investment. For some, not having to stomach the ups and downs of a tech high-flyer is worth forgoing greater rewards by opting for the relative safety of an investment in a company like Coca-Cola.

Bloomberg's second headline, interestingly, was more provocative (and misleading) than the first one. "Wary" carries with it all sorts of negative connotations relative to "less sure." But, given the abundance of news, financial and otherwise, the 24-hour news cycle provides and other diversions, ranging from iPads to Facebook, you need to cut through if you hope to get noticed.

Jun Yang reported the story from Seoul. Young-Sam Cho and Brett Miller edited it. I find the fact that they choose to run it questionable; however, I am not surprised. While the media still prints actual news as part of its business model, it's quickly becoming little more than a side job. The snappy headlines, light on actual content, now that's where the money's at. Warren Buffett says something that anybody whose ever heard more than his name easily understands, and Bloomberg, a major financial news organization, passes it off as "news." It would border on the comical, if it was not so sad and commonplace.

And I'll be clear, I don't think the people at Bloomberg who decided to run the story were trying to manipulate the stock. Others have done a fine job of that in the recent past. If that was their intention, they did a bad job, as AAPL could be on a return to reality this week, up over 2 percent on Monday. My overarching point is that people, seemingly, no longer think before they hit submit, whether they are anonymous commenters on the Internet or credentialed journalists. This is exactly the type of "noise" that investors must cut through when making buy, sell, or do nothing decisions. Last week, this type of "news," because of the power of Warren Buffett's name and the reach of Bloomberg, could have taken the stock down another buck or two (or simply exerted more downward pressure). This week, Apple might actually turn in its usual monthly bullish performance before taking another inevitable breather.

Disclosure: I am long AAPL.