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Warren Buffett’s Apple Bet Outperforms S&P 500

Buffett's investment in Apple has yielded a hypothetical return of 681.2% over seven years, outperforming the S&P 500

One of the most successful value investors of all-time shocked investors with the purchase of Apple Inc shares in 2016. The stock now makes up a large portion of the Berkshire Hathaway Inc.

Legendary investor Warren Buffett unveiled a 9.8 million purchase of Apple shares on May 16, 2016. The shares were purchased by Berkshire Hathaway.

The Apple shares were bought at an average price of $27.25 at the time, or around $6.81 adjusted for a 2020 stock split. The initial stake purchased by Buffett was around $1.1 billion..

Since that time, Buffett has added to the Apple position making it one of the biggest pieces in the Berkshire Hathaway portfolio and making the company one of the biggest owners of Apple shares.

Investing $1,000 With Buffett: An investor who chose on May 16, 2016, the Berkshire Hathaway filing date, to buy a stake in Apple has done quite well.

Buffett attended the Berkshire Hathaway 2003 annual shareholders’ meeting May 3, where he spoke about excessive executive salaries, the company’s record first-quarter earnings of $1.7 billion, and announced that there are four possible candidates to succeed him when he leaves.PHOTO BY ERIC FRANCIS/GETTY IMAGES

A four-for-one stock split by Apple in August 2020 would have taken 10.48 shares of Apple to 41.92 shares. Those 41.92 shares of Apple would be valued at $7,811.79 at the time of writing, based on a share price of $186.35 for AAPL.

This represents a hypothetical return of 681.2% over the last seven years, one that has outperformed the overall stock market.

The SPDR S&P 500 ETF Trust, which tracks the S&P 500, would have seen a $1,000 investment turn into $2,392.01 over the same time period. This represents a hypothetical return of 139.2% over the same time period.

Buffett has been recognized for his value investing strategy. Some may have seen his investment in Apple as a rare one, given his preference for value over growth and his typical shyness to technology stocks. Investors who followed his investment are likely thankful they did.

Produced in association with Benzinga

Edited by Asad Ali and Saba Fatima

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