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After Late Entry, Warren Buffett Makes Apple His Top Holding
May 7, 2018


There are two kinds of mistakes in investing.

There are mistakes of commission - things that you do wrongly.

And there are mistakes of omission - things that you should have done and didn't do.

For Buffett, the technology sector has been a space of big omissions. For decades, he stayed away from the technology sector.

Once when he was asked about his refrain, he had explained, 'Technology is based on change; and change is really the enemy of the investor. Change is more rapid and unpredictable in technology relative to the broader economy. To me, all technology sectors look like 7-foot hurdles.'

So, when I first heard about Warren Buffett investing heavily in IBM earlier this decade I was quite surprised. (Unfortunately, this investment didn't work out as Buffett had expected. And now, he has fully exited the stock.)

But after closely studying him all these years, I also know very well that Buffett doesn't let past views or actions become a hindrance. He's ever learning and evolving his knowledge and views.

He has not just overcome his discomfort with technology stocks, but he is now betting big on the sector. Yes, his top holding right now is a technology company - Apple Inc.

Over the last two years, Buffett has been aggressively buying shares in Apple Inc and now controls 5% stake. In fact, Apple Inc now constitutes 21% of Berkshire Hathaway's public stock holdings.

But, as you can see in the chart, Buffett has been quite late to enter the bus.

Had he bought the stock 20 years ago, he'd be sitting on a massive 177-bagger.

I know many people who wouldn't buy a stock simply because they had seen it at a fraction of a price. And they would keep cursing themselves for such missed opportunities.

But what I like about Buffett is that he doesn't let past errors of omission stop him from making investments now.

Data Source: Yahoo Finance

This Chart Of The Day was published in The 5 Minute WrapUp - Learn from Warren Buffett, the Great Teacher and the Wise Loser

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