They agree more than you might realize.
Unless you’ve been living under a rock, you already know that famed investor Warren Buffett has been selling Apple (AAPL -0.12%) stock by the boatload. His holding company, Berkshire Hathaway, has made several sales of the tech king over the past few months, more than halving its position in Apple from nearly 50% of the entire portfolio at this time last year to less than 23% today.
Pundits have been pondering what it means. Is Buffett losing faith in Apple? Is Apple stock too expensive? Is Berkshire Hathaway just stockpiling cash?
While investors hash it out, other billionaire investors are making their moves, and they’re not all like Buffett’s. For example, Israel Englander of Millennium Management bought 5,163,316 new shares of Apple stock in the second quarter, raising his fund’s position by 68% to 12,809,102 shares.
Which position makes the most sense for individual investors?
Billionaires versus each other
One thing Buffett’s sale doesn’t mean is that he doesn’t like Apple anymore. Apple is still Berkshire Hathaway’s largest position by far, and Buffett said last year that he plans to hold it forever. That was after he’d already sold off some Apple stock, and the implication was that it would continue to have a meaningful position in his portfolio, which it does.
Investors could weigh in on why he sold off part of his position, but it’s clear that he still thinks Apple is an excellent business and that it’s worth holding on to its stock.
So, his feelings about Apple are probably not very different from those of other billionaire hedge fund managers who own Apple stock, like Englander.
Apple stock is up about 17% year to date, and that means that more people are buying it than selling it. That’s how the market works. Despite Buffett’s large sale, Apple stock is ultimately up over the period that he’s been selling. Considering Buffett’s large share of Apple stock — even at the current level, Berkshire Hathaway owns 2% of shares outstanding — many more people have been buying Apple stock, such as Englander.
Buffett has praised Apple for top management and loyalty generation. It has created a tech ecosystem allowing customers to use an array of its products, from iPhones to MacBooks to AirPods and more, constantly refreshing with upgrades and subscription services.
According to Counterpoint, Apple topped the smartphone industry with 52% of the smartphone shipments market in the 2024 second quarter, flat with last year, and it’s expected to benefit from investments in artificial intelligence (AI).
Because Apple is developing its own AI technology rather than working with a partner, like most hardware companies, iPhone users have Apple’s services embedded in their devices. All of Apple’s technology is interconnected and works seamlessly together across its spectrum of devices, which is why bringing users into its ecosystem is so lucrative.
Apple is the most valuable company in the world and the only one worth more than $3.5 trillion. Billionaire investors know it’s a strong bet for continued dominance in its field, innovation in technology, and stock gains.
Billionaires versus you
What about the individual investor?
Buffett and Englander have two different approaches to portfolio management. Buffett loves to say that he’s not a stock picker, but a business picker. He typically holds between 45 and 50 stocks at any given time, and his favorite holding period is “forever.”
Englander, in contrast, holds about 6,000 stocks. He also holds many combinations of puts and calls, although Apple is his largest single-stock holding.
Both of these investing giants continue to demonstrate tremendous confidence in Apple’s future.
Apple stock still has plenty of long-term potential, and it also provides value in its dominant position and dividend. New investors may not want to make it their largest position like these money managers have, since its growth prospects are somewhat tempered by its large size and valuation, which isn’t cheap right now. But it can be strong anchor stock for the long-term investor.
