Did Warren Buffett Get It Wrong With Apple?

Hello MarketClub members everywhere. After years of avoiding tech stocks and missing the tech boom, legendary investor Warren Buffett purchased through Berkshire Hathaway 9.8 million shares of Apple on May 16th, worth roughly $1.07 billion, according to a filing for the first quarter with the Securities and Exchange Commission.

What's interesting here is hedge fund giant, David Tepper, exited his 1.2 million stake in Apple and in April, Carl Icahn said he no longer holds any shares in Apple.

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So who is right? David Tepper and Carl Icahn for selling their shares of Apple Inc. (NASDAQ:AAPL) Or Warren Buffett for buying the stock? Well, it all begins with your time perspective. In the case of David Tepper and Carl Icahn, they tend to be traders as opposed to Mr. Buffett, who tends to be a long-term investor. Now I can say this about Mr. Buffett; he is not a tech guy and he missed out on the big move in all of the tech stocks. So if you are a long-term investor, it may not be a bad move to buy Apple. If you're more of a trader, then you probably want to be out of the stock of the moment.

Here is my take on Apple. When Steve Jobs was at the helm the company was at its zenith in creativity and innovation. It was a time when everyone wanted a smartphone and in particular an Apple iPhone. Now step forward in time and nearly everyone has a smartphone, so you have to ask yourself where is Apple's growth going to come from in the future?

I have said this before; Apple is not the leader in innovation that it once was in the tech world. It is also extremely difficult to keep coming up with innovative products that the public is clamoring for. We hear talk that the next big thing is going to be smart cars, smart homes, but every tech company in the world including none tech companies wants to jump into that space including Amazon.com Inc. (NASDAQ:AMZN).

I'll be taking an in-depth look at Apple and one or two key areas that could upset the Apple cart (pun intended).

Stay focused and disciplined.

Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub

3 thoughts on “Did Warren Buffett Get It Wrong With Apple?

  1. I have never owned an Apple product and and continually annoyed by Microsoft's OSs, but decided a few years ago that I was too old to funk the learning curve and move to Ubuntu, which I would do in a heartbeat if I were in my 30's. I do have Ubuntu on one system (Atom) that I built fur $150 about six years ago, and fool around with it from time to time. From what I've seen of Apple products, they are very well made, expensive, and nice, but I have no need for them.

    I own both stocks and see no reason to either buy more or sell either. Both good companies that make money. My only complaint about the newer Windows versions is that they can't run my Micrografx Picture Publisher, that Corel bought and killed. Now, THERE's a company I dislike, a lot.

  2. I have to weigh in. - forgive my 2c!
    I have never used an apple product personally
    I don't own any apple stock (yet)
    I have been using microsoft products since DOS 3.0 came out and my tablets/phones are android
    I have been an IT professional since 1979

    Point is, I recently upgraded my WIN8.1 (2 of 5 stars) to WIN 10, (0 of 5 stars)
    and I have just hit my limit with Microsoft. I have recently decided I just cannot take another Microsoft OS, and MANY people I talk to are running the same temperature as I am.

    My prediction is that the future is APPLE. - I know we're used to APPLE users saying it, but as I said I have never used an apple product

    Windows is dying, maybe not yet in the home market, but that will come eventually as those "computer literate kids" will be less afraid to change from the windows GUI that
    others are dependant upon.

    Android is not a player. It is pretty but not suitable for the business world and it is not a true multitasking OS.

    Bottom line is - my deployments of new mobile products and mobile technologies are overwhelmingly moving away from scanners and handheld devices to ipads and iphones for the GUI wirelessly to a backend of Oracle or SQL server (or even growing is the use of MYSQL and comparatives.)

    (Think inventory control and receiving as an example) and that means that AAPL has a growing footprint in the business world.

    Having said all that, I seriously respect your thinking Adam, and I totally agree with you, but I think that Soros who also recently (supposedly) took a significant stake in AAPL and now Buffett see the handwriting on the wall - Even if they'e BOTH wrong (uhhh.... yeah, right. That's gonna happen.)

    Their presence is sufficient to make a difference in the supply / demand ratio for AAPL stock

    Thanks for your patience everyone - Happy trading!

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