Apple Inc. (NASDAQ:AAPL) has been on an amazing Buffett-inspired run of late, with the company’s stock having now breached the $150 mark, putting Apple on a clear and purpose-driven drive toward the elusive $1 trillion market capitalization mark.
I’ll be taking a look primarily at the “Buffett factor” and why buying into Apple may still be a good idea, even at current elevated levels.
Warren Buffett is an iconic investor, one who has shunned technology-related stocks since the beginning of his investment career due to the nature of these investments. Buffett has preferred, instead, to put his money to work in industries he can understand well, and in “forever” companies with great brands and competitive advantages (moats) which can protect them over long periods of time from the downward pressures competition and inflation provides to investors.
Apple has ticked all of Mr. Buffett’s boxes of late, and with an iconic brand and ever-improving product portfolio, Berkshire Hathaway Inc. (NYSE:BRK.A) has announced Friday it has more than doubled its stake in the technology giant to nearly $20 billion, or nearly 2.5% of the company.
Coattail investing, or simply investing alongside market-moving investors, has proven to be a fruitful strategy for Berkshire Hathaway aficionados, with the Buffett-owned company posting S&P500-beating returns almost annually for decades.
I remain bullish on Apple for a number of reasons, however Warren Buffett’s enthusiasm for a stock he would otherwise not have considered just a few years ago makes me even more bullish. With the release of the iPhone 8 looming, investors may still see significant upside by following the travails of one of the best investors of all time.
