Warren Buffett’s distaste for tech stocks is almost legendary at this point. One of his investing rules is not to invest in something that you can’t understand, and his constant example is that he does not really understand technology. After all, if you can’t understand the potential prospects of a stock, then you have no business investing in that stock.
However, recently Buffett’s Berkshire Hathaway disclosed that it increased its shares of Apple by a whopping 55% during the second quarter. The company purchased an additional 5.42 million shares, bringing the total up to around 15 million shares which are worth more than $1.5 billion. This surprising move has made Apple one of the top shares Berkshire Hathaway owns—it even beats General Motors.
But, if Buffett is so against technology, why did he purchase tons of Apple shares not once but twice?
Well, while there are plenty of sites that will try and reason out that Buffett has had a change of heart, or try and argue that the technology shares really fall in line with the other criteria that companies must meet for Buffett to be interesting in purchasing, the truth is actually much simpler.
In fact, according to both the Wall Street Journal and The Motley Fool, both this purchase and the shares bought in a previous quarter were not actually made by Buffett at all, but by two hedge fund managers that may be groomed to replace Buffett eventually. It’s unclear whether the stocks were purchased by Todd Combs or Ted Weschler, but either way, Warren Buffett isn’t the mastermind behind this odd move for Berkshire Hathaway.
According to several news sources, the stocks were purchased without any input or approval from Buffett and the entire investing community is scrambling to try and decide if the move is Buffet-esque genius or a major blunder made by the up-and-coming investors. Apple has certainly not enjoyed the same levels of profit the last quarter as it has in past years, but the intrinsic value of the company—an important thing to Buffett when investing—is still quite high making this not quite as odd as it might seem. As with all stocks, though, only time will tell whether this decision is a good one or not.