let's start. Just given what you mentioned, there was some news that came out in the 10Q this morning. It shows that Berkshire sold another 115 million shares of Apple in this last quarter. That's Berkshire's largest holding. And I think in that vein, we'll start with a question from Sherman Lamb. He is a 27-year-old Berkshire Hathaway Class B shareholder from Malaysia. And he asks, last year you mentioned Coca-Cola and American Express being Berkshire's two long-duration partial ownership positions. And you spent some time talking about the virtues of both these wonderful businesses. In your recent shareholder letter, I noticed that you have excluded Apple from this group of businesses. Have you or your investment manager views of the economics of Apple's business or its attractiveness as an investment changed since Berkshire first invested in 2016? No, I would the but we have sold shares. And I would say that at the end of the year, I would think it extremely likely that that Apple is the largest common stock.

holding we have now. One interesting thing is that, uh, Charlie and I, uh, looked at Common Stocks or marketable equities, or the things that people love to look at, as being, uh, businesses. And so when we, when we own a Dairy Queen or we own whatever it may be, uh, we look at that as a business. And when we own Coca-Cola, uh, or American Express or, uh, we look at that as a business. Now we can buy really wonderful companies in the market as businesses. We can't buy all of them. I mean all of the shares. We can't buy 90% or 80% or anything like that. But when we look at Coca-Cola, American Express, and Apple, we look at them as businesses. Now there's differences in tax factors. There's difference in manager responsibility, a whole bunch of things. But in terms of deploying your money, uh, we always look at every stock as a business. And we don't, we have no way, no attempt made to predict markets. We have no attempt made to, uh, pick stocks.

went through many, many years uh doing the wrong thing. uh I got interested in stocks very early, and I was fascinated by them, and uh, and I wasn't wasting my time because I was reading every book possible and everything else, but finally I picked up a copy of the intelligent investor in Lincoln, and, and there was a few sentences in there that, that said much more eloquently than I can say it, but if you look at stocks as a business and treat the market as something that's doesn't tell you, isn't there to instruct you, but it's there to serve you, uh, you'll do a lot better over time, uh, than if you try to take charts and listen to people talk about moving averages and look at the bed pronouncements and all of that sort of thing, and so that made a lot of sense to me that, and the way i' the way I've been allowed that deploy it. Charlie and I talked about this, of course, constantly, uh, it's changed over the years as the amount of capital we have.

and kind has changed and all of that, but the basic principle was laid out by B. Graham in that book, which uh, I picked up for a couple of dollars and uh, which basically said to me, you've been wasting your time now, but maybe you can use what you've learned or been reading about and put it to better use. And then Charlie came along and told me how to put it to even better use, and that's sort of the uh, story of why we own American Express, which is a wonderful business, we own Coca-Cola, which is a wonderful business, and we own Apple, which is an even better business, uh, but uh, and we will own unless something really extraordinary happens, we will own Apple and American Express and Coca-Cola, uh, uh, when Greg takes over this place and, uh, uh, it's such a simple approach that it's almost deceptive. You most things if you keep working harder and harder at it, you know, you learn a little more math or you learn a little more.

physics, but investments. You don't really have to do that. You really have to have your mindset properly. So, we will end up in less something dramatically happens that really changes capital allocation, uh, a strategy. We will have Apple as our largest investment, but I don't mind at all under current conditions building the cash position. I think when I look at the alternative of what's available in the equity markets and I look at the composition of what's going on in the world, we find it quite attractive. And one thing that may surprise you, but we, I almost everybody I know, pays a lot more attention to not paying taxes than I think they should. It, we don't mind paying taxes at Berkshire, and we are paying a 21% federal rate on the gains we're taking in in Apple. And that rate was 35% not that long ago.

and it's been 52% in the in the past uh when I've been operating and uh it uh the government owns the federal government owns a part of the earnings of the business. We make they don't own the assets but they own a percentage of the earnings and uh uh they can change that percentage any year and the percentage that they've decreed currently is 21%. And I would say with the present fiscal policies uh I think that something has to give and I think that the higher taxes are are quite likely and uh the government wants to take a greater share of your income or M or bures uh they can do it and uh uh they may decide that someday they don't want the fiscal deficit to be this large because that has some important consequences and they may not want to decrease spending a lot and they may decide they'll take a larger percentage of what we earn and we'll pay it and we always hope at Berkshire to pay substantial federal income taxes. We think it's appropriate that a company a

country that's been as has been as generous to our owners. It's it's been the place I was lucky. Berkshire was lucky with here and uh uh if we if we send in a check like we did last year, we send in over $5 billion to the US federal government. And if 800 other companies had done the same thing, no other person in the United States would have had to pay a dime of federal taxes, whether income taxes, no social security taxes, no estate taxes, no it's up and down the line. Now that's that's uh I would I would like to. I hope things develop well enough with Burkshire that we we say we're in the 800 club and uh and maybe even move up a few notches. Uh it doesn't bother me in the least. Uh to write that check and uh I would really hope with the all of America's done for all of you shouldn't bother you that we do it and if if I'm doing it at 21% this year and we're

doing it at a higher percentage later on. I don't think you'll actually mind the fact that uh we sold a little apple this year.

Warren Buffett explains why Berkshire reduced its big Apple stake

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