Buffett Buys More Apple Stock Because iPhone Is "Enormously Underpriced" To World's 3rd Richest Man
Warren Buffett is currently in New York City to dine with the winner of his annual lunch auction - the winner paid $3.3 million for the opportunity to pick Buffett's 88 year-old-brain at Smith & Wollensky on his birthday - and spoke to his favorite TV anchor, CNBC's Becky Quick.
The usual topics were covered, including that "stocks are always better than bonds" (and when they aren't, if you are a billionaire the government will simply bail you out) and even said that "we're buying stocks this morning"
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Buffett also said he would rather give up private jet than his cell phone, which also led Buffett to disclose that he has bought even more shares in Apple, because of its buybacks devoted customers, adding to his stake in the company by “just a little” since his last regulatory filing.
“They’ve got to keep having the product that this huge clientele regards as indispensable,” Buffett said. For customers, “the iPhone is enormously underpriced” compared with the utility it offers. Of course, when you are the world's third richest man, everything is "enormously underpriced"...
Berkshire has been piling into Apple, increasing the company's stake to 252 million shares as of June 30, making the investment worth more than $50 billion with Berkshire now the 3rd shareholder in Apple. Buffett’s also boosted his holdings in Goldman Sachs, Delta and Southwest Airlines in the second quarter.
Buffett also said that Berskhire bought back some of its shares as the company changes the metric it uses to decide when repurchases are a good move; while Buffett did not disclose how much stock Berkshire bought back, he did confirm that he has changed his views.
"We bought back a little yeah," he told CNBC's Becky Quick during a "Squawk Alley" interview. "We tie it now to intrinsic business value, which we should have done all along but for a while book value was a good proxy. It didn't fully describe intrinsic value .. and it was a reasonable proxy."