Berkshire’s Warren Buffett Says Tim Cook Should Ignore Einhorn and Buy Back Stock
CNBC’s Squawk Box hosted Berkshire Hathaway’s Warren Buffett this morning (via Fortune), who added his voice to the hype around Apple’s stock price and cash pile.
During the special three-hour segment with Becky Quick, Warren Buffett was asked about Apple and about his position on the company’s current situation. Buffett’s advice was to basically ignore all of it:
“I don’t own any Apple and I haven’t, though I did talk with Steve Jobs a few years ago about what they might do with the cash. The best thing you can do with a business is run it well, and the shares will respond. There have been all kinds of times when people have criticized us [Berkshire], saying you could do this thing or that thing.”
“I would ignore him. I would run the business in such a manner as to create the most value over the next five to ten years. You can’t run a business to push the stock price up on a daily basis. Berkshire has gone down 50% four times in its history. When that happens, if you’ve got money you buy it. You just keep working on building the value. I heard form people each time [Berkshire shares went down], saying why don’t you do this or that. Pay a dividend. I think Apple’s done a good job of building value. They may have too much cash. Now one reason they have so much cash is two thirds of it has not yet been taxed.”
Buffett even recalled a discussion he had with Steve Jobs some while ago, on the stock buyback topic.
“When Steve called me, I said, Is your stock cheap? He said, yes. I said, Do you have more cash than you need? He said, a little. [laughs] I said, then buy back your stock. He didn’t. Now, when our stock went from $90,000 to $40,000 to $45,000, I wrote about, we wanted to buy the stock. We didn’t quite manage to. But if you could buy dollar bills for 80 cents, it’s a very good thing to do.”