Warren Buffett’s Most Profitable Investment: Lessons For Investors | Global News Avenue

In late 2016, Warren Buffett began the most profitable investment in his legendary career. Through his company, Berkshire Hathaway Corp.brk.a), he began to accumulate shares in Apple (AAPL), first purchased about $1 billion worth, and soon accumulated $39 billion. When Brk.A began selling half of its Apple holdings, the shares were worth more than $150 billion.

While the tech giant seems unlikely to choose for investors known for avoiding tech stocks, it illustrates the principles that make Buffett one of the most successful investors in history.

Why Buffett invests in Apple

when Buffett Many market observers were surprised to start buying Apple stocks in the second half of 2016 – he had avoided it Technology Stocks For decades, they claimed that they were not outside his “circle of competence.” But Buffett saw something outside Apple’s category as a tech company, a consumer brand with unprecedented loyalty and pricing power.

Berkshire Hathaway invested about $40 billion to build what it would be the largest holding. By the last quarter of 2023, the position had grown to over $150 billion, making it the most profitable investment in Buffett’s long-standing career.

However, in the dramatic turnaround, Berkshire cut its Apple stake by 56% between October 2023 and June 2024, with sales of more than 515 million shares.

Apple Investment demonstrates several classic Buffett principles:

• Go beyond surface classification to understand the true nature of a business
• Have the courage to invest heavily when prospects appear
• maintain discipline Through market fluctuations
• Understand when to trim locations

Why Buffett sells half of Berkshire’s Apple stock

Buffett explained his sale of Apple shares in 2024, partly because The largest cash in the corral He thought that what he once held by listed companies was a turbulent market period.

But he also pointed out that the main reason is that it is beneficial to the company’s tax revenue. But Buffett then highlighted his broader view of corporate taxes, but his company doesn’t hear often that his company doesn’t pay Enough tax:

“We don’t mind paying taxes at Berkshire, we are paying 21% of the federal interest rate for the proceeds Apple has made. … What I want to say is that with the current fiscal policy, I think something has to be given.. ..We always want to pay a lot of federal income tax in Berkshire. Things, no one else in the United States will have to pay a dime federal tax.”

Bottom line

Although Buffett’s decision to Trim Berkshire’s Apple stake between 2023 and 2024 seems to contradict his buying philosophy, in fact, it reinforces his most important lesson: Great investments require both beliefs to serve in the long term and wise positions are adjusted as circumstances change.

The key is not to find the next Apple, but to adopt the principles that guide these investments. Find companies with strong brands, loyal customers and pricing capabilities while being disciplined enough to make a profit if the position is too large.