Apple & Berkshire: A Decades-Long Wait

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Greg Abel’s first annual letter as CEO of Berkshire Hathaway arrived the other day, and I confess, I approached it with the same trepidation I feel when my aunt starts describing her latest online shopping haul. It’s not that I dislike shopping, or even annual letters from holding companies, but the sheer volume of detail… it’s overwhelming. I half expected a list of every paperclip purchased by the conglomerate. Instead, it was mostly about Apple. And Apple, as it turns out, is something even I can understand, mostly because I own three of their products and regularly curse their insistence on proprietary charging cables.

Abel, stepping into Warren Buffett’s famously sensible shoes, signaled a remarkably… passive strategy. He’s not planning a fire sale of Berkshire’s holdings. No frantic scrambling to rebalance the portfolio. Instead, a sort of… patient waiting. Specifically, with Apple, American Express, Coca-Cola, and Moody’s. The man seems to be operating under the assumption that these companies will simply… compound. Over decades. It’s a refreshing concept, really. Like letting a good sourdough starter do its thing. I tried that once. It smelled faintly of gym socks.

The message, stripped of all the financial jargon, is this: Abel believes these companies are… good. Really good. Good enough to justify holding onto them for, well, the rest of my life, probably. And as someone who’s spent a considerable amount of time agonizing over which streaming service to cancel this month, the idea of a truly long-term investment is… unsettling. It implies a level of financial stability I haven’t achieved since I stopped buying collectible ceramic frogs.

High Praise, or Just Exhaustion?

Abel devoted a surprising amount of space to Apple. It’s not just that they’re Berkshire’s largest holding—although that certainly helps—but that he seems genuinely impressed. He keeps using words like “understand” and “regard.” It’s like he’s describing a well-behaved golden retriever, not a tech giant that could probably buy several small countries. He hinted that Berkshire won’t be ditching these stocks based on momentary valuation dips, but only if the fundamental business prospects crumble. Which, let’s be honest, feels unlikely. They’re selling us slightly improved versions of the same things, year after year, and we keep buying them. It’s a beautiful, cynical cycle.

Steady Growth, or Just Clever Marketing?

The numbers, of course, support this patient approach. Apple’s earnings per share are up 19%. Their services segment—the one that keeps me paying monthly fees for things I barely use—boasts a gross profit margin of 75.4%. It’s a truly impressive figure. It’s also the kind of statistic that makes me feel vaguely inadequate. I’m pretty sure my gross profit margin on freelance writing is closer to 12%. But hey, at least I don’t have to worry about quarterly earnings calls.

And the momentum is there. Services are growing as a percentage of revenue, which means Apple is successfully turning us all into subscription addicts. It’s a brilliant strategy. It’s also slightly terrifying.

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Valuation & the Illusion of Control

Abel acknowledges that even decades-long holdings aren’t immune to valuation concerns. Apple is trading at around 33 times earnings, which, let’s face it, is a bit rich. But he seems willing to pay a premium for a company with exceptional customer loyalty and a management team that doesn’t seem determined to squander its resources on ill-advised acquisitions. Which, in the current business climate, feels like a radical act of faith.

There are, of course, risks. A slowdown in services revenue. Erosion of pricing power. The possibility that Apple will release a product so bafflingly complex that even the engineers can’t explain it. But overall, I agree with Abel. Apple is a solid hold for long-term investors. Like Berkshire, I’d rather be patient and let the business compound. It’s a much more relaxing strategy than trying to time the market. And frankly, I have enough anxiety in my life already.

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2026-03-01 03:32