Apple position cut by $20 billion during first quarter

One of the day's biggest pieces of news came before the meeting began.

Berkshire's 10-Q quarterly report, released early this morning, says its large Apple stake was valued at $135.4 billion as of March 31.

Based on its price of $171.48 per share at the time, that implies Berkshire held around 789,600,000 shares, a reduction of 115,960,000 shares from what it had previously reported owning as of December 31. That's a drop of around 12.8%.

It had reduced its position by around 1% in the fourth quarter, prompting a debate over whether Berkshire was just trimming or at the beginning of a more significant reduction.

The value of the sold shares as of March 31 was $19.9 billion. Today, they would be worth almost $21.3 billion.

Since Berkshire rounded the value of its Apple stock to billions of dollars with just one decimal point, we won't know the exact number of shares it still has until its 13-F stock portfolio snapshot is released later this month.

The current value of its position is around $148.8 billion, since the stock has rallied to $183.36.

Apple shares fell by almost 11% in the first quarter. Berkshire's selling is likely responsible for at least some of that decline.

Answering a shareholder question, Buffett said he expects Apple will remain Berkshire's largest equity position well into the future, calling it an even better business than long-time holdings American Express and Coca-Cola.

But he said he expects capital gains tax rates will be heading higher, so shareholders won't mind paying a lower rate now on the "little" Apple sale rather than a higher rate later.

Operating earnings and cash pile increase

Also in that quarterly report: a big increase in operating earnings.

They were up 39% to $11.2 billion compared to last year's first quarter.

Insurance underwriting surged by 185% to $2.6 billion.

Berkshire's cash jumped by more than 13% to a record $189.0 billion, up from $167.6 billion as of the end of the fourth quarter, as Buffett and his portfolio managers continued to find large investments at attractive prices.

During the meeting, Buffett predicted the total will top $200 billion by the end of the current quarter.

'I'll slip again'

Old habits are hard to break. After answering a question, Buffett turned to Greg Abel, the man who has been designated to be Berkshire's next CEO, and said what he has said hundreds of times at past meetings: "Charlie..."

Buffett caught himself as the audience applauded, and predicted, "I'll slip again."

Abel said he was "honored." 

Before the Q&A started, a film honoring Munger was shown in the arena.

You can see at approximately 30 minutes into CNBC's live stream via YouTube.

In response to a young person's question about what he would have done if had one more day with Charlie, Buffett reflected on their friendship:

AI could make scamming a 'growth industry'

Buffett said he knows "nothing" about artificial intelligence but compared it to nuclear weapons as a scientific development that could have very negative consequences. Like nuclear weapons, however, he said the "genie can't be put back into the bottle."

But he worries it will help scammers. "If I was interested in investing in scamming, this would be the growth industry of all time."

He recounted seeing an image of himself, with what sounded like his voice, generated by AI. He couldn't tell it wasn't real, saying, "I practically would have sent money to myself over in some crazy country."

Berkshire considering investment in Canada

Buffett told a questioner that while Berkshire concentrates its investments in the United States, "We do not feel uncomfortable in any shape or form putting our money into Canada."

Without revealing any details, he added, "In fact, we're actually looking at one thing now."

More excerpts form the meeting

• Successor Greg Abel will have a more hands on approach with managers, says Buffett
• Warren Buffett: No one would owe ‘a dime’ of federal taxes if other companies paid fair share
• GEICO ‘still playing catchup’ in data analytics, says Berkshire’s Ajit Jain
• Warren Buffett: Insurance is the most important business at Berkshire
•  Berkshire’s Ajit Jain calls out corruption and skyrocketing prices in Florida’s insurance market
• Warren Buffett: Find the job that you would like to have if you did not need a job 
• Warren Buffett: Solar will never be the only source of electricity 
• Buffett and Ajit Jain explain why they’re staying away from hot cybersecurity insurance industry
• Warren Buffett: We’ll see how next management handles future investments in India
• Buffett on Berkshire’s $188 billion cash pile: ‘We only swing at pitches we like’

BUFFETT AROUND THE INTERNET

Some links may require a subscription

• Bloomberg (subscription): Berkshire Cash Hoard Scores Another Record as Earnings Gain

• Wall Street Journal (subscription): Warren Buffett Praises Apple After Berkshire Cuts Stake

• Reuters: Buffett takes stage at Berkshire meeting, pays tribute to Munger, cuts Apple stake

• Associated Press: Profit drops at Warren Buffett’s firm but thousands still want to hear from the investing guru

• New York Times: Berkshire Reports Strong Earnings and Formidable Cash Stockpile

QUESTIONS OR COMMENTS

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

If you aren't already subscribed to this newsletter, you can sign up here.

Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

Unsubscribe

Digital Products

Manage Newsletters

Feedback

Terms of Service

Privacy Policy

Join the CNBC Panel

© 2024 CNBC LLC. All rights reserved. A property of NBCUniversal.

900 Sylvan Avenue, Englewood Cliffs, NJ 07632

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis.

Data also provided by THOMSON REUTERS