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Comment by Kye | Hacker News Reader

Does this actually mean anything? Apple has plenty of cash to do whatever it wants. I don't think it lives or dies by the whims of investors, and Buffet's main ambition in life is running up the score. Taking money out of a company that's probably done growing quickly but still doing okay to spread around makes sense.

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In regular trading shares don't go to or from a company but rather changes hands between investors, so BsH selling off won't affect their cash reserves (unless it's part of an IPO, funding round or buyback).

Looking at the article he's probably feeling that things are overvalued in general and is building a war-chest to scoop up stocks at a discount after a slump or crash.

Apple has a market cap of 3.43 trillion and a PE of 34.19. If you think that Apple is "probably done growing quickly but still doing okay" then Apple has an absolutely unsupportable valuation.

> then Apple has an absolutely unsupportable valuation.

This is likely true of much of the tech industry.

I think you may be misunderstanding how stocks work.

This isn't taking money/cash out of Apple -- Apple's cash is entirely unaffected.

This is just Berkshire selling some of their shares of Apple to other people who now own those same shares insteads. All the money Berkshire gets in these sales comes from the buyers, not from Apple.

Berkshire flooding the market with Apple shares causes those shares to drop in value. GP is saying that Apple is more insulated from that sort of price drop because they’re sitting on a mountain of cash. A smaller company (think Peloton) is much more affected by their stock price dropping because they use the value of the stock to raise capital that they need. GP understands what they’re saying.

Berkshire already sold these stocks though. They’ve been selling for the past several months. It’s not in their best interest to do a sudden dilution for exactly the reason you mentioned.

The current stock price is after the sales, but before the news of the sales. Any reaction now would be a reaction to the news and not the effects of the sale itself.

I do think this is less a signal about Apple than it is about Berkshire. Buffett's motto has been "be greedy when other people are fearful and fearful when others are greedy". It feels like we have been in the greedy phase for quite a while now.

Every very large company stops growing quickly, as there is a global ceiling on trade. That's why investment managers recommend a good amount of a portfolio be in small companies; they have a lot more room for growth.

Apple is still probably a decent investment in a portfolio but it's probably not going to be the home run that it has been in the past.

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