Does Buffett think Apple is cheap?

The answer may surprise you

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

We've known since the 2009 annual meeting that Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) chairman Warren Buffett and Vice Chairman Charlie Munger like Google (Nasdaq: GOOG) . Turns out they also like Apple (Nasdaq: AAPL) .

"They're both huge companies. They look very tough to dislodge. I would not be at all surprised to see them worth a lot more money in 10 years," Buffett said from the stage of the CenturyLink Centre in Omaha, Nebraska, yesterday.

So Berkshire is buying? No. Buffett said he lacks the conviction to buy shares of Apple. Added Munger: "The only fair thing we can say is that there are lot more people who know these companies. We have the reverse of an edge. What do we know about computer science?"

Something, apparently. Berkshire last year purchased a 5.5% stake in IBM (NYSE: IBM) for $10.9 billion. Buffett said from the stage he'd been watching Big Blue for more than 50 years, having read every annual report issued over those five decades.

"I have much less of chance of being wrong about IBM than I do about being wrong about Apple and Google," Buffett said. Translation: Even if he believes Apple trades for a reasonable price, as many do, Buffett senses he lacks the tools — or, in Munger's parlance, "the edge" — necessary to evaluate the business for best investing results.

So be it. As much as the tech investor in me wants Buffett to reconsider, it's this very approach — a staunch refusal to buy anything he doesn't fully understand — that's led to 52 years of market-crushing performance.

If you're looking in the market for some high yielding ASX shares, look no further than "Secure Your Future with 3 Rock-Solid Dividend Stocks". In this free report, we've put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691).

A version of this article, written by Tim Beyers, originally appeared on fool.com

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »