Invite ye felawes and frendes desirous in gold to enter the gates of Shrewd'm, for they will thanke ye later.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 2
up to around $205... BV obviously helped.
Seems there is optimism that Apple Intelligence will drive iPhone sales
Around $162B position even after Warren's trimming.
No. of Recommendations: 27
So, it's late here, after cocktail hour, check my math
Apple was up $14.02 today, plus another $0.50 post market, so about $14.52 at the moment. One day.
There are about 15.33 billion shares outstanding.
So the market cap was up about $223.7 billion today.
That's 25% of Berkshire's total market cap.
Wow. The stock market can still surprise me.
And, as is so common, the price of Berkshire moved in the opposite direction, so the non-Apple portion of Berkshire is deemed worth vastly less than it was yesterday.
Jim
No. of Recommendations: 3
checking your math...
Shares Owned 789,368,450 $207.15 closing price
Total Outstanding 15,847,050,000
Market Cap = $3.176B or so
Enjoy the cocktails!!
No. of Recommendations: 5
checking your math...
Shares Owned 789,368,450 $207.15 closing price
Total Outstanding 15,847,050,000
Market Cap = $3.176B or so
Not sure what that last line is referring to.
Apple shares were up $14.02 today.
Berkshire owns 789,368,450 shares of Apple at last report, so Berkshire's stake had increased $11.07b in value, at close, according to Mr Market.
For all of Apple, Apple's Q1 report said there were 15.41b outstanding, or 15.46b diluted shares. I'm not sure where Jim's $15.33b number or your 15,847,050,000 number comes from - do we have any news since March 31st?
If the number is 15.4b (although it may well be a little less, with Apple buying back so many of its own shares), that would mean Apple's market value increased by $215.9b today, which makes sense, as Berkshire owns about 5% of Apple. If you include the extra 50c in share appreciation after hours (although it is 0.33 as I type), that would be another $375m in Berkshire's stake, and another $7.5b for Apple's value overall.
Heady stuff. It looks like our concerns about Apple's valuation are not shared by Mr Market.
dtb
No. of Recommendations: 1
"Not sure what that last line is referring to."
I meant Trillion instead of Billions. Lord. Stuff adds up
Y Charts shows:
Apple shares outstanding for the quarter ending March 31, 2024 were 15.465B
of course it is less now due to buybacks
No. of Recommendations: 0
The most recent shares outstanding figure we have for Apple is 15,334,082,000 as of April 19, 2024. (page 1 of Apple's most recently filed 10Q)
No. of Recommendations: 6
Barron’s take on Berkshire and Apple:
The Apple gain added $11 billion to the value of Berkshire’s equity portfolio Tuesday before any tax adjustment, or more than 1% of Berkshire’s market value of around $883 billion. So why didn’t Berkshire stock move higher?
Berkshire doesn’t perfectly correlate with Apple, and financial stocks were off 1% Tuesday and Berkshire is the largest financial company in the S&P 500. Berkshire could have been depressed if investors sold the Financial Select Sector SPDR of which Berkshire is the largest component.
Barron’s estimates that Berkshire’s quarter-end book value will be about $420,000 per class A share, a record, assuming no change in stock prices before June 30. Book value stood at just under $400,000 per class A share on March 31.
Berkshire now trades for about 1.45 times our June 30 book value estimate, down from a peak of over 1.6 times in late February when the A shares peaked at around $650,000. Berkshire stock is now trading close to its average price/book ratio of 1.4 over the past five years and for about 21 times projected 2024 earnings per share.
https://stocks.apple.com/AeDNpnq9qSfGYsUxoqokxfg
No. of Recommendations: 15
check my math
Apple was up $14.02 today, plus another...
For those who weren't reading carefully, I was showing the amount Apple's market cap rose in a single day, not the total market cap.
In one day Mr Market conferred upon Apple fully 1/4 of the total it took Berkshire 60 years to be assigned.
The arithmetic seems to have been good : ) <hic>
Jim
No. of Recommendations: 1
In one day Mr Market conferred upon Apple fully 1/4 of the total it took Berkshire 60 years to be assigned.
Yup, shows the scale Apple has hit; it's incredible. The general consensus is that this will drive / accelerate an upgrade cycle with the iPhone - which represents upwards of $200B in annual sales.
tecmo
...
No. of Recommendations: 0
It’s so odd to me that Berkshire’s stock price often falls while Apple stock is getting bid up.
Any logical reason you can think of for this?
No. of Recommendations: 3
Mr. Market isn't always logical. Forest for the trees kind of thing.
My best guesstimate.
m
No. of Recommendations: 2
I think it's pretty likely that the 10% ish Apple bounce in 2 days is largely due to Apple itself buying back their own shares. Don't they have a $110 billion buyback planned/announced. And as a reported just explained (Laura Martin?) Apple only has certain windows when it can buy back stock, and one of those is just after their developer conference that just ended. "In the short run, the market is a voting machine"...
No. of Recommendations: 1
Will be interesting to see how much Warren sold down Apple in q2
No. of Recommendations: 0
I have no idea what WB’s IV is for Apple, but I hope he sold more at these prices. Seems nuts that Apple buys back shares at any price no matter how high.
No. of Recommendations: 0
'Berkshire doesn’t perfectly correlate with Apple, and financial stocks were off 1% Tuesday and Berkshire is the largest financial company in the S&P 500. Berkshire could have been depressed if investors sold the Financial Select Sector SPDR of which Berkshire is the largest component.'
From Barron's Andrew Bary / 6.11.24
No. of Recommendations: 1
The most recent shares outstanding figure we have for Apple is 15,334,082,000 as of April 19, 2024. (page 1 of Apple's most recently filed 10Q)
Yes, it is confusing how many different numbers there are for one quarter.
I made the rookie mistake of looking at 'Shares used in computing earnings per share: Basic 15,405,856... Diluted 15,464,709" (numbers quoted in thousands). The trouble is, that is actually the average number of shares in a quarter, and for a company continually buying back shares, it is less than at the END of the quarter.
On p.3 of the 10Q, the balance sheet, they give the number at the end of the quarter (Q2, the quarter ending March 31st) which was 15,337,686.
As you say, p.1 of the same report actually gives the number when the March 31st report was finalized (April 19), which is indeed 15,334,082,000 (rounded to the nearest thousand). The only trouble with that number is it is the number of "shares of common stock were issued and outstanding as of April 19, 2024." That means it does not include the number of shares that are involved in stock option (the diluted share count.)
Anyways, all these numbers are close enough for our purposes of estimating the huge jump in market cap based on the company announcing it is getting a little more focused on AI in its OS.
dtb
No. of Recommendations: 3
Screw it. Berkshire needs to open up an AI division and get an immediate 20% stock price boost.😬🤷🏼♂️🤦♂️
No. of Recommendations: 2
Or train an LLM on the collected writings of Mr Buffett.
Call it "TheOracleLLM" with a big admonition that answers are not financial advice.
No. of Recommendations: 16
It’s so odd to me that Berkshire’s stock price often falls while Apple stock is getting bid up.
Any logical reason you can think of for this?
Personally I think the simplest explanation is that on any given day (or week or month) in the markets, things lean either conservative/safe or speculative/growth.
Apple is considered to be speculative/growth, but Berkshire is considered to be conservative/safe, so they advance at different times at short time scales.
As others noted, I wouldn't exactly call it entirely "logical".
Jim
No. of Recommendations: 13
No. of Recommendations: 6
<<It’s so odd to me that Berkshire’s stock price often falls while Apple stock is getting bid up.
Any logical reason you can think of for this?>>>
It’s silly. But simple. It’s a risk on/risk off market each day.
Risk on: Tech. Risk off: the company with $180 Billion cash.
Doesn’t matter the $180 Billion cash “risk off” company has, as its biggest stock holding, the largest “risk on” company. Nor does it matter the biggest “tech” is really worlds greatest “consumer goods” company.
We all understand the defensive characteristics of Apple’s ecosystem moat—and we all understand the Growth characteristics of Berkshire. But hey, we’re in the biological intelligence crowd. What do we know? :)
No. of Recommendations: 1
That sounds reasonable, and it does seem silly. Seems ridiculous to constantly trade risk on/risk off daily, but I guess big institutions are making money doing that somehow. 🤷🏼♂️
No. of Recommendations: 6
"Seems nuts that Apple buys back shares at any price no matter how high."
It does seem nuts, but if you look throughout the history of their buybacks, it has been a REMARKABLY profitable endeavor.
Never more profitable than when they were able to borrow money at a lower rate than their dividend rate. So stock bought back resulted in actual better cash flow because the retired dividend was higher than the interest payment. That was a masterstroke on the part of Apple back then.
No. of Recommendations: 1
That was a masterstroke on the part of Apple back then.
If my memory is accurate back that far (and it pains me to write this), I think Carl Icahn deserves a lot of the credit for the buy back move.
Jeff
No. of Recommendations: 10
If my memory is accurate back that far (and it pains me to write this), I think Carl Icahn deserves a lot of the credit for the buy back move.
Your memory is accurate. Icahn is a smart guy. Reminds me of Buffett's maxim (the wording of which I only vaguely remember): you want to partner with someone who is smart and honest, just smart will kill you.
dtb
