Warren Buffett I am NOT buying more Apple and we OVERPAID for Kraft

Link to join StockHub free investing discord server: Want to join our free STOCKHUB discord chat? Here is the link

Say oh i’m gonna buy for $11 a share about 96 billion they could have pulled off the acquisition you could have bought it all cash wouldn’t had to issue any debt with it oh this weekend has absolutely revolved around the great warren buffett and why is that what warren buffett released his annual shareholder letter which by the way i did a highlights video of the

Most important things i saw in that shareholder letter basically i posted that on my other channel financial education too but then when that letter comes out it is like warren buffett time everybody’s talking about warren buffett what a warren buffett have to say he does a lot of interviews which have happened today one being which he did on cnbc i can’t show

You any of the video clips cuz i’m sure he’ll kitty monetized if i do that i want to talk about three very specific things he said in that interview today one being around the kraft heinz one being around apple in his apple steak we know apples actually his biggest holding now at this point in time and also he mentioned that they almost made a massive acquisition

We’re gonna kind of talk about what he could have bought it so first off here let’s look and see what buffett has to say about apple he says if it were cheaper we would be buying it we aren’t buying it here buffett says in an interview on squawk box with co-host becky quick buffett says he hasn’t added to his apple position despite a recent sell-off but would buy

More stock if it cheapens further as i previously mentioned apple is by far and away berkshire hathaway’s biggest public company holding at this point in time and in my personal opinion you know buffett started buying apples somewhere around $100 a share this was about two and a half years ago somewhere around the hundred dollar share range and so in my opinion

Warren buffett would love to buy some more apple at something under 150 in my personal opinion he’s kind of looking for apple around 150 or under he’s upon where you kept buying up to and then when he stopped buying it was somewhere around 150 dollars it seemed like so if we look at the chart on apple it only dipped under 150 very very briefly and then a bounce

Straight back and now obviously it’s in the 170s again around 175 dollars here today so in my opinion unless apple drops under 150 dollars like to the 140 range 130 and especially 120 unless it drops those ranges kind of stays there for a bit i don’t see necessarily warren buffett buying any more apple shares in the short term i think really it’s got to fall under

150 to get him to say okay now let’s start loading up the boat again on apple shares because i think he absolutely does want to buy more i think charlie munger his investing partner wants to buy more apple he stated that in the past that they’ve been way too controlled with buying apple just crazy because i have on the apple shares they have they have up around

See also  My Unfiltered Rant On The LuLaRoe Documentary

Two hundred and fifty million apple shares which is another reason i don’t think he’s necessarily desperate to buy apple because he got such a massive position and his company 250 million shares let’s do the calculation on that okay 250 million shares times 175 bucks a pop that’s almost 44 million dollars in just apple shares berkshire hathaway warren buffett’s

Company has right now okay almost forty four billion like that is ridiculous okay as far as apple and painting the mountain dividends apple should be upping their dividend here within the next few months and based upon what and my opinion apple will probably up that dividend too and based upon how many shares berkshire hathaway owns in my opinion warren buffett

And berkshire hathaway will probably get around a billion dollars per year paid out to them just in dividends from apple nevermind in future years that should just be starting it in 2019 into 2020 i think they’ll be getting around a billion dollars just in dividend money guys like that is nuts okay that is nuts all right mix up here let’s talk about the whole kraft

Heinz deal obviously i did a video on this channel recently about this and everybody wants to know what does warren buffett have to say about this and he says i was wrong in a couple of ways about kraft heinz buffett tells cnbc we overpaid for kraft it’s still a wonderful business in that it uses about seven billion dollars of tangible assets and earned six billion

Pre-tax on that buffett tells cnbc but we and certain predecessors we paid a hundred billion dollars in tangible assets so for us it has to earn 107 billion not just a 7 billion that the business employs buffett says he has no intention of selling his stake in the company so i absolutely love the fact that warren buffett is not shy about saying hey we overpaid us

I feel like some hedge fund managers of some fund managers out there when they make a big mistake and by the way a lot of those hedge fund managers will lose a lot bigger percentages on money than warren buffett is down the heinz position okay let’s be very clear about that but a lot of times you’re just to brush it off or try to like make a big excuse both it’s

Just being flat-out honest here he’s saying we overpaid for kraft heinz that’s the bottom line he says he likes the business likes all this and that but the bottom line is they overpaid and that’s something that’s another reason you know i love warren buffett not just because he’s gotten amazing returns throughout his life i think is somewhere around nineteen

Percent on average compound per year which is ridiculous right when we’re talking about you know five six decades of doing this but the fact that he’s just man enough to own up and say we made a mistake we overpaid for this i love that about warren buffett because that’s something you just don’t see out there from a lot of fund managers and i think warren buffett’s

Just build up that credibility over time that he can admit a mistake and move on where some other like hedge fund managers and whatnot they’re afraid to admit they made a mistake because they’re afraid you know if somebody one of their big net high net worth clients will pull out money or something like that but i just love that about warren buffett he said hey

See also  How to Avoid Cashier Scams | BeatTheBush

We made a mistake we overpaid for it all right the other thing warren buffett said that was very interesting to me in that whole like hour-long interview or it might’ve been over an hour as a very long interview they did on cnbc but he says they were close to making a very large acquisition in the fourth quarter warren buffett says he was close to making a big

Acquisition in the fourth quarter but it fell apart buffett says he doesn’t think the deal is on the table any longer but does not say why not when they obviously pressured him you know like i’ll try to give us a hint or something buffett said i’ll give you a hint it’s hunk this planet that’s typical warren buffett and so i kind of got to thinking like maybe what

Are a couple companies that warren buffett might be interested in buying 100 percent of and as far as public companies go and there were two that kind of came to mind the one that kind of made the most sense was a company he used to be invested in and that’s general electric he used to have an investment in general electric many many years ago before the business

Fell apart and whatnot this is a company as of today has a 96 billion dollar market cap by the way berkshire hathaway has well over a hundred billion dollars just in cash sitting around right now ok now think about this if you know a couple months ago in the november december timeframe ge basically had fallen to like $8 a share of $7 of shares meaning that general

Electric was selling for let’s say somewhere around a whole market cap of 60 billion maybe 17 billion so maybe at that point in time maybe buffett made an offer out there to buy ge for maybe same where around $11 a share at that time once again ge was around seven eight bucks say oh i’m gonna buy for $11 a share about 96 billion they could have pulled off the

Acquisition he could have bought it all cash wouldn’t had to issue any debt with it and i think at that time maybe a lot of shareholders would have said yeah let’s go with that that would have been a huge premium at that point in time not only would have been a huge premium at that time but let’s keep in mind general electric was just going down and count him

Down and down in stock price so at that time shareholders may have been it’s like okay we can get $11 per share $10 per share maybe $12 per share and buffett’s gotta buy out the company let’s just let him buy out the company and take our take our losses and just run with them or our if we do happen to make some money let’s take those and agree with it so that’s a

Possibility we don’t know for sure it just kind of makes sense that it could have been and for the deal to fall apart well obviously general electric stock has been up and up and up and now if buffett wanted to pull off a deal he might need to pay fourteen dollars a share which means that might put general electric’s market cap somewhere around 120 130 maybe 140

See also  Stocks Explode (KNR) (KNRLF) (ART) (ARHTF) (TSLA) (AAPL)

Billion now it gets too expensive okay the other possibility is another general company okay another company he has investments in he understands very well he could be interested in possibly buying gm or maybe was interesting buying general motors general motors trades at about a fifty seven billion dollar market cap by the way something i forgot to mention when i

Was actually recording the videos if you think warren buffett’s not very interested in general motors think again he already owns over 70 million shares of general motors many of those shares have been added within the past year or two so he’s very interested in general motors has put it that way obviously a very low forward p/e on this company it could have been

Something maybe buffett was interested in buying i think that’s when a little more of a longshot i think general electric probably would have made a little more sense and also it might not have been a public company at all it could honestly been a private company that they were talking about buying obviously buffett loves to buy a hundred percent ownership stakes

And a lot of private companies out there so maybe it could have been a private company we just don’t know guys but i think there’s a good possibility could have been general electric based upon where general electric was trading at in that november/december he’s talking about it could closed in the fourth quarter look where general electric was trading out in

November december and think about the premium he could have paid and that one probably makes the most sense so anyways hope you guys enjoyed this as always let me know your opinion down there in that comment section as always thank you for watching have a great day and by the way just today the public account hit a new all-time high of just a little under two

Hundred and twenty thousand dollars here today you can see all the trades i place in that account by being part of my private stock market membership group you also want to join there if you’re a newer investor because there are hundreds of videos to learn from that will accelerate your learning and a massive massive rate actually have a little discount for you

Since you stayed around to the end of the video and then if you’re a more advanced investor i think it’s also a group you would very much enjoy being part of specially than now that we have the discord chat and we can talk about stocks and things that are happening in the market and what not so if you’re interested in joining in there i would love to have you in

There and then also the two hundred plus members that are in there would love to have you in there as well you

Transcribed from video
Warren Buffett "I am NOT buying more Apple and we OVERPAID for Kraft" By Financial Education

Scroll to top