Warren Buffett's Investment Colossus: Influences on the Stock Market and the Role of Apple

Warren Buffett has managed to secure a large following of enthusiastic supporters with his impressive track record. His investment company, Berkshire Hathaway, has not only outperformed the market, it has cast it into the shade. Since Buffett took the reins in 1965, the company has achieved an annualized return of 19.8%, while the S&P 500 managed only 10.2%. Berkshire Hathaway owns a portfolio of approximately 60 companies, including well-known names like Benjamin Moore and Duracell. In addition, it holds shares in about 45 other stocks, including some of the most valuable companies in the world. Three of these holdings have now crossed the trillion-dollar valuation threshold, yet Buffett holds onto them and sees even more potential. At the top of Berkshire's portfolio is Apple, with 29.6% or a volume of $92.5 billion. Apple is considered the most valuable company worldwide with a market capitalization of about $3.5 trillion. At Berkshire Hathaway’s annual meeting in February, Buffett emphasized that Apple is a better business than his long-time favorite stocks Coca-Cola and American Express. Interestingly, Buffett recently sold a significant portion of his Apple shares, even though he initially said he would never completely dispose of the stock. Reasons for the sale could include tax advantages or a desire for liquidity in times of high interest rates. Despite the sale, Buffett remains a fervent supporter of Apple’s CEO, Tim Cook, and frequently praises the excellent corporate management, a crucial criterion for Buffett’s investment decisions. Another positive point for Buffett is Apple’s share buyback program, which he regularly praises and which has led to an increased stock ownership. Even though Apple shares are currently highly valued—they are trading at 35 times the earnings of the last 12 months—long-term investors promise themselves security from an investment in Apple’s stock.