WARREN BUFFETT MAKES $9 BILLION ON APPLE – HOW ABOUT YOU?

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BERKSHIRE HATHAWAY MADE BELOW APPLE STOCK PURCHASES
• March 2016: Purchased 9.8 million shares
• June 2016: 5.4 million shares
• December 2016: 42.2 million shares
• March 2017: 72 million shares
• June 2017: 1 million shares
• September 2017: 3.9 million shares
• December 2017: 31 million shares

Today, I believe Warren Buffett and staff know more about Apple than its Board of Directors (BODs).  Unfortunately, that is not saying much.  As most BOD’s add little value to shareholders.  So who is responsible for protecting your investments?  You are!

With seven purchases spread over two years, Berkshire now has ~166.7 million shares, making it Berkshire’s largest holding in terms of market cap.  Berkshire paid $20.9 Billion and at today’s price of ~$176, it is now worth ~$29.3 Billion.  An almost $9 Billion profit.

Note the above chart.  Berkshire Hathaway spread its acquisition of Apple over multiple purchases, importantly, while Apple’s price was increasing.  Why seven purchases?  Spreading large purchases over time, reduces the risk of entering the market at a bad time, when the market/price is declining.  Berkshire, normally spreads their major purchases out, looking for good buying opportunities.  Even Warren Buffett has made bad/questionable buys.  Notice Berkshire first purchases Apple, during a correction/decline in price.  And for the most part, each subsequent purchase is doing a slight correction point.

Last week we talked about long term (years) stock market trends.
QUICK REFRESHER:
• Five times per year the market normally declines two percent or more
• About every five years, the market normally declines 30+% {And yes we are overdue.}
• Markets increase typically three out of four years
• Over long periods (years) markets beat inflation, unlike bank savings accounts
• You will never become wealthy, selling at the low point and reentering the market at the high point.
• Never make important decisions based on emotions and fear (life lesson)!
• The best time to buy any product, is when the product goes on sale (a market correction).  If you have done your homework, you should be happy to buy when the price is lower.

CREATING YOUR BUY LIST
Prepare for corrections by building your buy list.   As you learn more, you should be adding and sometimes deleting equities from this list. The very first equity on your buy list should be the good funds/ETFs or stocks you already own and believe in. New potential investments should be added to your buy list. If the equity ultimately meets your buy criteria, use market price declines/corrections to buy.

MAKING LARG ACQUISITIONS

During a correction and prior to purchasing, wait for several days of positive increases in the market to confirm an up trend. If you believe the time is right, unless you are only investing a small amount, divide your buys into multiple purchases.  Let’s say you want to buy an additional $10,000 in the S&P ETF or Apple.  Maybe you buy $3,000, wait and buy your second $3,000 days or months later and if the positive momentum continues, purchase your last $4,000 later.  This protects you, if the price goes down. If the market reverses after a purchase, stop buying and wait.

Only buy what you believe is a good long term investment!  I made three equity purchases/investments since this latest correction, from my buy list.  All three purchases have fortunately increased.

Happy hunting for good investments!

Powers Investments Management, LLC

This blog will provide, information and simple strategies, that will assist you to achieve YOUR financial objectives and long term targets. For over 30 years, I solved multi-million dollar problems, for Fortune 10-250, companies. My formal education includes: Business, Finance and Chemical Engineering {Problem Solving} at: Harvard, Rutgers and North Carolina State. And an additional 30+ years, managing my family’s investment decisions. I currently manage/advise people with net-worths ranging from the tens of thousands to several million dollars.

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