Warren Buffett

Billionaire stock picker Warren Buffett increases Apple shares and sharply cuts IBM holdings

Buffett cuts stake in IBM by 32 per cent while increasing position in Apple by 3 per cent

PUBLISHED : Wednesday, 15 November, 2017, 6:52am
UPDATED : Wednesday, 15 November, 2017, 6:53am

Warren Buffett continued to trim a once-major investment in International Business Machines Corp while adding to newer holding Apple in the third quarter.

The billionaire investor’s Berkshire Hathaway Inc lowered its IBM stake by about a third to 37 million shares as of September 30, when it was valued at about US$5.4 billion, according to a regulatory filing on Tuesday. Berkshire boosted its holding in Apple by about 4 million shares.

In 2011, Buffett invested more than US$10 billion into IBM. The move shocked many, because the investor had long steered clear of technology stocks, saying they were outside his area of expertise. He defended the pick for years as Big Blue struggled with declining sales.

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Earlier this year, he did an about-face, saying his thesis was flawed and began to cut back the holding.

The episode highlighted just how badly Buffett missed the boat on investing in the technology companies that have come to dominate the ranks of the world’s most valuable enterprises.

At Omaha, Nebraska-based Berkshire’s annual meeting in May, he issued a mea culpa, adding that he “blew it” by failing to invest early in Google.

At the same time, he showed he’s learning.

One of Berkshire’s major new holdings is an investment in Apple. The stake was initiated by one of Buffett’s deputy investment managers last year. Buffett has since piled into the technology giant. Berkshire’s holding in the iPhone maker was valued at about US$21 billion at the end of September.