Why Warren Buffett’s Apple Stock Holding was laughed at? (为什么巴菲特的苹果持股被其他人取笑呢?)
Warren Buffett started to buy Apple stock back in May 2016 where its cost is around $100 ($20 after the 4-for-1 share split in August 2020). When Buffett first bought Apple, everyone was surprised as Buffett normally won’t invest in technology stocks. However, Buffett said that Apple was extremely undervalued by that time, and have immense future going forward.
We can see that Apple share price does not only go up, but will also retrace sometimes. In September 2018, the share price rose to $280 ($56 now) and everyone was praising Buffett for his wise decision, and even almost making three-fold of profit just from Apple alone. However, a big dip occurred in December 2018 where the share price dropped to $185 ($37 now) due to the heat rise from US-China Trade War, and Buffett was still holding all of his Apple stock, without selling any of it. Everyone was laughing at him for still holding the stock, because he can earn much more if he chose to sell earlier and buy in now. Buffett stayed silent.
About a year later, the stock rebound to its previous high and continue to soar higher as times go. This time, fellow investors praise Buffett yet again for being able to hold the stocks for so long, regardless of what is happening outside the world. The share price soared to the high of $405 ($81 now) in February 2020, and everyone is still saying that Buffett is still the Master of Investing, for being able to spot such stock back in 2016. Buffett stayed silent, yet again.
However, tragedy happened in March 2020 where the share price fell to $285 ($57 now) due to the rise in Covid-19 cases and lockdowns. Yet again, fellow investors turn their target on Buffett, saying that he is too old and has lost his “investment sense” for still holding the stock and not having it sold at its previous high a month ago. Once again, Buffett stayed silent.
Today, as of the writing date, Apple is currently trading at $122, which is $610 before share splitting. In these tough time, Buffett has not said a word but just minding his own business, keeping faith in the stocks he bought and believed they will grow eventually. During these 5 years, there are surely people who buy and sell, earning some money. However, the writer believed that there is only a small amount of people who can be real to its investment like Buffett, where they will hold a stock for as long as they can, before the stock is overvalued or its fundamental is deteriorated.
In short, the writer thinks that investment should not involve any buying and selling activities when the fundamental of a company has yet to be changes. However, it will be extremely hard to do so as market price fluctuate every day, and it will definitely affect one’s decision. Hence, focusing more on the company itself rather than market price is a wise choice as we can see from the story of Buffett’s Apple holding, and what he would like to advice the new investors.
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