Warren Buffett has never been shy about admitting that one of the things he knows next to nothing about is technology. Instead, his companies tend to be either mechanical or service-oriented, such as insurance. However, recently, Berkshire Hathaway has begun to invest in Apple and in the most recent quarter, more than doubled its stake, leaving analysts scratching their heads.
While it has been confirmed that Buffett himself didn’t make the initial investment in Apple (that, instead, was done by his proteges Combs and Weschler) Buffett has come out and said that he approves of the purchase and considers Apple to be a “sticky” company. In other words, people tend to stay with the company once they’re invested.
And how did Buffett, who professes he is ignorant about technology come to this assessment? By watching his grandkids at Dairy Queen.
“But what I do know is when I take a dozen kids, as I do on Sundays out to Dairy Queen they’re all holding their Apple [iPhones]. They barely can talk to me except if I’m ordering ice cream or something like that,” Buffett told CNBC in an interview. “…The stickiness really is something. I mean, they do build their lives around it…”
Regardless, it looks like thus far Berkshire’s bet on Apple has paid off. While the company was lagging slightly through the first part of 2016, the company’s value has jumped 13% since Buffett purchased the stocks and is expected to continue to climb with the release of the new iPhones this fall.