Subject: Re: Apple
" Apple had grown to over 40% of Berkshire’s entire equity portfolio.

Far be it for me to invoke “mutual funds” and “regulations” in defense of the Apple sale, but those funds have limits on position size to protect customers in the event of sudden lurches and bumps in any one particular equity position. Those regulations did not just fall from the sky, they came into being decades ago thanks to abuses and collapses of fund vehicles.

Now that doesn’t mean that Berkshire, which is emphatically *not* a “fund” (well, kind of), should play by those rules, but it does mean that “position size” and “risk” are very real attributes, and if the guy at the top thinks 40% is “too big”, I’m willing to not criticize that move - even if it turns out to have been premature.

Not a big deal. Big enough for a thread on some message board somewhere, I suppose, but not in real life."


BINGO< a partner in brkville gets it! I assume most people here have never had to deal directly with the SEC, nasd, 50 state division of securities etc.

In the late 80s the SEC sent me a "comment letter." Back then I was consulting to small start-ups on how to structure their IPOS etc. I was taking stock as payment and putting the shares in the parent fully reporting PUBLIC company, Only In America. The SEC comment letter said in effect, since a large portion of your market cap is in other public companies we want you to register as a, holding company, mutual fund, etc. PANIC TIME< I didn't want that hassle aka regulatory compliance or expense, hence I spun out two of the holdings to parent company shareholders, no harm no foul. My lawyers and CPAs signed off on it, we never heard from the IRS, the SEC got off my case, on that issue.

My world was small cap but fully reporting companies in full compliance with SEC regs. This was almost 40 years ago, unreal. I have no idea IF, IF, Buffett looked into this possibility with respect to spinning out the apple. That's what I would have done.

An interesting exercise for you guys or maybe RW or the Brooklyn Investor would have an interest in this issue. IF Buffett had stuck to his favorite holding period, forever, and we still held the ibm, wfc, all the BAC and all the AAPL, wouldn't brks market cap be substantially more than 50 %, public securities? Would the SEC be requesting that team brk register as a holding company, Fund of some sort, etc? I seriously doubt Buffett wanted that problem.