No. of Recommendations: 4
I'm not sure the thread is only about Berkshire and Apple. We're also talking about buybacks at the company level at Bank of America, Chevron, Davita, etc. My point, which may be a tired one, is that share repurchases aren't inherently virtuous. Clearly Mr. Buffett approves in principle -- he's applauded the role of buybacks in increasing the size of Berkshire's ownership stake in its long-term holdings. But I'd hate to see Berkshire itself become a company where shares are repurchased at high prices regardless of the other options for capital allocation. I don't think there's much danger of that as long as current management is around.
Share repurchases might make sense for Apple. I don't know what their options are, because despite taking a run at it several times I really don't understand the company (which is a little uncomfortable for a Berkshire shareholder, but there we are). There's no way I could have predicted the durability of their returns on capital or the resulting ramp in value in the last decade. Plenty of people did -- I just don't understand, at a molecular level, why people buy their products. My work phone is an iPhone (I didn't have a choice). It's fine. It's a phone. There's no earthly reason it should cost as much as it does. Obviously I'm missing something. I'm sure lots of people will be happy to explain at me, but hopefully not in this thread.
