Date
23 May 2017
Warren Buffett says the US stock market is cheap with interest rates at their present levels. Photo: Reuters
Warren Buffett says the US stock market is cheap with interest rates at their present levels. Photo: Reuters

Buffett adds 120 mln Apple shares to portfolio

Warren Buffett, chairman and chief executive of Berkshire Hathaway Inc., told CNBC on Monday that his conglomerate had bought about 120 million shares of Apple Inc. in 2017 and that US stocks were not in “bubble territory”.

“Apple strikes me as having quite a sticky product,” Buffett said. He said Berkshire’s Apple stake, at 133 million shares, was worth about $17 billion and amounted to Berkshire’s second-biggest holding.

Apple chief executive Tim Cook had done a “terrific job,” Buffett said, but added he had not bought shares since the company’s earnings report.

Buffett, who told the cable television network that Berkshire had spent about US$20 billion on stocks since just before the Nov. 8 US election, also said the US stock market was cheap with interest rates at current levels, Reuters reports.

The billionaire investor said it was extremely difficult to attempt to find a floor in stock prices and that he did not know what would happen in the near term in the equity market. He said US shares could conceivably “go down 20 percent tomorrow.”

Buffett said Berkshire’s positions in airlines remained unchanged. He said pricing shares of airlines has historically been a “very tough game” and that he had never met the chief executives of any of the four airlines in which Berkshire holds stakes.

Buffett, who was a vocal supporter of Democratic presidential candidate Hillary Clinton, said he would judge US President Donald Trump based on how safe the country is in four years. He said he would also judge the Republican president according to how the US economy performs overall and how wide participation in a better economy extends.

Despite his disagreement with some of Trump’s policies, Buffett said the US economy would be better off in four years under any president. Buffett said that US Secretary of State Rex Tillerson made “a lot of sense.”

On Kraft Heinz’s snubbed bid for Unilever, Buffett said it was never intended to be a hostile offer and that there was not a “backup deal” for the company. Berkshire is a key investor in Kraft Heinz.

Asked about Berkshire’s US$86 billion cash pile, he said the conglomerate was “always looking” for acquisitions but that there was “nothing close.”

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CG/RA

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