SPOT - Apple: The Real Reasons Warren Buffett Is Selling

2024-05-07 09:05:01 ET

Summary

• Warren Buffett's decision to sell Apple shares is likely driven by concerns over short-term profit prioritization, weakening market position, and increasing regulatory and geopolitical risks.
• Apple's failure to deliver innovative projects like Project "Titan" and increasing competition, particularly from rivals like Xiaomi, should worry investors.
• High valuation multiples, stagnant growth, and various risks including regulatory investigations and supply chain dependencies could further justify Buffett's decision to trim Berkshire's Apple stake.

When our long-term competitive position improves as a result of these almost unnoticeable actions, we describe the phenomenon as “widening the moat.” And doing that is essential if we are to have the kind of business we want a decade or two from now. We always, of course, hope to earn more money in the short-term. But when short-term and long-term conflict, widening the moat must take precedence.

- Warren Buffett

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