Warren Buffet took a big bite of Apple

Apple is now 51 percent of Berkshire Hathaway’s publicly-listed equities portfolio. Yes you heard that right. Apple is not just a fruit for Warren Buffett.

This is a brand that generates a lot of valuable cash for him, which he can re-invest and compound even further. For the last seven years, this single stock has generated a huge amount of returns for Berkshire Hathaway.

Back in the early 2000s, Warren Buffett was all about Coke and American Express. He still loves coke, but as he explains: “Coca-cola is a wonderful business, but it's not growing as fast as Apple”.

Check this out:

Mar-2001

Obviously, Berkshire Hathaway’s portfolio was a lot smaller back then, but the composition is also radically different to what it is today. Warren Buffett has never stayed still as an investor. He has always evolved and adapted, which a lot of people don’t realise.

For instance, his investment style is more flexible and opportunistic than the investment style of his mentor Benjamin Graham.

For instance, while Benjamin Graham preferred to invest in large, well-established companies, Warren Buffett is more willing to invest in smaller, more growth-oriented stock He will do this as long as he believes they have a strong management team and a sustainable competitive advantage.

He believes that great companies can compound their earnings over time and generate significant returns for investors, even if they might be temporarily trading above their intrinsic value. This is something Benjamin Graham would never do.

Let’s fast-forward a bit:

December 2011

Coca-Cola is still up there. He hasn’t ditched it. In fact, he never will. But there are some significant changes. The most notable is IBM, which he began investing into in 2011.

This surprised investors. He had previously said that he would not invest in technology companies, but he was impressed by IBM's track record of innovation and profitability. He also believed that IBM was undervalued at the time.

However, IBM didn't pan out. The stock price declined over the next several years, and Berkshire Hathaway eventually sold all of its shares in 2018. This was just a prelude to him eventually buying Apple in 2016.

Another notable addition was Wells Fargo, which now joined American Express as a major holding in the portfolio. Again, this stake surprised a lot of investors.

He believed that the company was worth more than its stock price, which presented an opportunity for investors to buy shares at a discount.

Wells Fargo eventually knocked out Coca-cola as Berkshire Hathaway’s largest publicly listed holding:

April 2015

Soon afterwards, he started buying Apple, which exploded off the blocks.

He eventually sold all of Berkshire Hathaway's shares in Wells Fargo in 2022. Why?

First, there was thee company's fake account scandal. Then the bank overcharged foreign-exchange customers by billions of dollars. Basically, he lost trust in management. So, not every thing he buys pans out.

Apple meanwhile, now accounts for 51 percent of the portfolio, largely driven by growth:

June 2023

It’s quite an incredible transformation. Consumer goods once accounted for a third of the portfolio in March 2001. That’s now whittled down to 10.7 percent. By contrast, technology has grown from 10.8 percent in March 2001 to a whopping 53.6 percent of the portfolio.

If you want to know how I did this analysis and how I created this data visualisation, keep on reading…