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Warren Buffett, Frugal Flip-Phone User, Loves His Apple SharesBy Seung Lee
Posted: March 2, 2018 9:27am PST
Warren Buffett does not own a smartphone -- and doesn't plan to for a long time -- but he loves his Apple shares. Buffett, CEO of the multinational holding company Berkshire Hathaway and one of the richest people in the world, raised his company's stock in Apple by 3 percent in November -- a fresh vote of confidence in the Cupertino tech giant.
In an interview with CNBC, Buffett said that if he had to pull all his money in one stock, he would choose Apple's.
"If you look at our holdings, you would assume that we like them in the order in which they rank by dollar value of holdings, but if you look at them in terms of recent purchases over the last year we've bought more Apple than anything else," said Buffett.
In 2017, Berkshire Hathaway held $28.2 billion in Apple shares -- the second largest holding among all the companies it has invested in, behind Wells Fargo -- according to its most recent annual report published last week. For Apple, Buffett's holding constitutes only 3.3 percent of the company.
After Apple and Wells Fargo ($29.3 billion), Berkshire Hathaway's next biggest holding is considerably smaller, with $20.7 billion in Bank of America shares.
Buffett, whose net worth is more than $86 billion, praised Apple as an "extraordinary consumer franchise" with an uncanny ability to attract new customers to its products, mainly the iPhone, and retain them through many years.
"I see how strong that ecosystem is, to an extraordinary degree," Buffett told CNBC. "You are very, very, very locked in, at least psychologically and mentally, to the product you are using."
But don't ask Buffett what he personally likes about the iPhone. Known for his frugality, Buffett still uses a flip phone.
Apple CEO Tim Cook asked Buffett why he has not upgraded his phone, according to Buffett. And the answer is quite simple.
"The answer is just I'm out of touch," Buffett told CNBC. "But I tell Tim, as long as I haven't gotten one the market is not saturated. The day I buy one, there is probably nobody left after that."
Buffett answered an array of other non-Apple related questions with CNBC, including three "L's" which can make a smart person go broke: liquor, ladies and leverage -- or investing with borrowed money.
"It is crazy in my view to borrow money on securities," Buffett said. "It's insane to risk what you have and need for something you don't really need. You will not be way happier if you double your net worth."
© 2018 San Jose Mercury News. Syndicated here under contract with YellowBrix, Inc. All rights reserved.
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