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The Get Smart in 60 seconds series meant to be like an espresso shot, a concentrated article dedicated to the Smart Investor on the go, with ideas or concepts delivered in 200 words or less.
Last week, news reported that Warren Buffett sold US$800 million in Apple (NASDAQ: AAPL) shares in the fourth quarter last year.
That is a huge sum of money. But context matters.
Despite the sale, Berkshire Hathaway, Buffett’s firm, is still holding some US$76 billion worth of Apple shares.
In other words, the US$800 million sale accounted for just 1% of its current holdings in Apple.
Now that we know the context, his sale last quarter is not such a big deal, is it?
But that’s not all.
Today, Berkshire Hathaway’s total stock holdings, including Apple, are worth almost US$250 billion. At the same time, Buffett has a sum of US$128 billion in cash to put to work should the opportunity arise.
The downside to holding billions in cash is that Buffett has few places where he can put US$10 billion to work without causing too much commotion.
You and I don’t have that limitation.
There are parts of Buffett’s investment strategy we can follow and there are parts that we don’t have to follow. The good news is that in Singapore, we are blessed with a good selection of dividend stocks that offer dividends that are better than the 2.5% offered by our CPF Ordinary Account.
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Disclosure: Chin Hui Leong owns shares in Berkshire Hathaway and Apple.
Photo source: Modified from Warren Buffett Caricature by DonkeyHotey under Creative Commons 2.0.
