No. of Recommendations: 27
To quote W.E.B., "That increase sounds like small potatoes. But consider that each 0.1% of Apple's 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple's repurchases did the job."
Perhaps the quote from the AR that annoyed me the most.
It's not factually wrong, but it's so misleading that one wonders whether it was on purpose.
Berkshire's proportional share of the cash within Apple, for all *meaningful* purposes, already belonged to Berkshire.
So that cash being deployed on Apple shares doesn't get us something for nothing, any more than we'd have got something for nothing if Berkshire bought more Apple shares.
Remember that's it cash that could have been sent as a dividend to us, and now can't be, because it's gone.
I'm not suggesting that's what should have happened, just demonstrating that it was "ours" before it was spent on repurchases.
The value gain as a result of the buybacks, as always, is not the value of the shares retired, nor the proportional increase in ownership we get because of it.
It's the amount by which the true value of the shares was less than their intrinsic value.
In this case, presumably in the range from tiny to negative, depending on your opinion of the value of Apple shares last year.
Jim
