MENU

Does Buffett think Apple is cheap?

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

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.