chris hill: let's move over to berkshire hathaway.why don't we start with the 13f filing, their quarterly filing. we'll get to the big stakesthat berkshire hathaway owns, and the degree to which they are increasing or decreasingsome of those large stakes. but the headline is that berkshire hathaway is now a shareholderof a little fruit company we like to call apple. all the reports indicate that this wasnot buffett's call, this was ... was it ted weschler?
apple stock price 10 years ago, jason moser: either combs or weschler. i haven'tread if they named one or the other, but i know ... hill: one of his trusted lieutenants madethis purchase. moser: yeah. that makes sense. i think, moreand more, as time goes on, we're going to see that's generally the case, where thosetwo are going to be making probably more of
the equity investments. i think buffett, andmaybe munger, to a lesser degree, can use their reputation in the business world asperhaps facilitating deals or helping to back deals, like they've done, or, it's being rumored,at least, that they're going to do something like that with yahoo. i mean, you have these two guys who are younger,have maybe a little bit of a different perspective on the world. they invest very similarly tohow warren buffett invests. but i'm sure they probably feel like they have a better graspon technology than perhaps buffett feels he might, which could explain a lot behind thisdeal. but, they have virtually infinite financial resources, so they really need to figure outways to play big ideas, and apple is by far
one of the biggest. taylor muckerman: kind of fits the mold. didn'tthey invest in kinder morgan when kinder morgan sold off. so, you see apple selling off quiteconsiderably. so possibly, just seeking that value that buffett was known for for the longtenure of his career so far. hill: do we run the risk of trying to readtoo much into this? i'm just thinking about anyone who is looking at this move. again,this is not buffett, this is one of his lieutenants. i think it would be understandable for aninvestor looking at this move to ask the question, "does this give us a glimpse into the futureof berkshire hathaway post-warren buffett." and i'm wondering, that may be true, although,do we risk reading too much into that? that
once buffett, for whatever reason, is no longerrunning berkshire hathaway, do we see a lot more move in into technology investments?or, was this just the best use of capital at this time? muckerman: i think with apple, it's a techstock, yes, but it's the biggest stock in the world, just ahead of google. it's notyour average small cap, mid cap tech stock that's going to be this volatile beast thatyou don't really understand. it's a cash-generating machine. it has a dividend now. i don't thinkit's your typical tech stock. it might be a first foray into it, really. but i don'tthink it's signaling a significant sea change here. moser: no. and i think, probably, as timegoes on, just the way the world changes, the way technology moves so fast, just that alone,berkshire hathaway is more or less going to
have to dip a toe into the tech space a littlebit more as time goes on. but yeah, to taylor's point there, apple is not your typical techcompany. you're buying, really, one of the most powerful brands on the entire planet.it's probably a bit easier for them to look at this and say, "they're selling a product.they're selling phones and tablets and the software that goes with it." it's pretty easybusiness to understand. that said, where apple is today versus whereit was 10 years ago, this is a fundamentally different investment now. this is not likeinvesting in some growth-style tech company that could have multi-bagger status in thenext 5-10 years. chances are that's not going to happen. and when you go through the restof berkshire's portfolio, you see a lot of
those old reliables in there, like moody'sand phillips 66 and general electric and ibm and coca-cola and wells fargo. apple, i think,is the same type of business. and people identify it very much the same way. i'm a little surprised that, given all ofthe positive sentiment that buffett has offered towards jeff bezos and what he's done in hislife with amazon, i really honestly thought maybe we would see berkshire consider initiatinga position in amazon, because they have a huge position in walmart, and i think a lotof us believe that walmart is sort of the old guard there, and amazon is really thenew guard, when it comes to retail. and again, retail is not all that difficult to understand.amazon i would also put in there as a tech
company, because they are. hill: they're not paying a dividend, though.muckerman: no, not quite. moser: that's true, but i also, if you'reasking me which one out-performs in the next five years, i'm picking amazon without eventhinking twice about it. carl icahn just recently divested from apple, saying it was no longerthe no-brainer that he once said it was. that ultimately is the market. people disagree,and you pick a side there. but it seems like they at least feel like there's going to besome kind of an attractive return here in the next few years. muckerman: carl icahn didn't really get whathe wanted in terms of activism, the higher
shareholder returns in terms of a dividendor share buyback. so maybe he's admitting defeat moreso than apple might not be a greatstock for the next few years. moser: and he was pegging apple shares atsome point in the past year as maybe a double from their current levels. granted, that wasn'tall organic growth, that would share buybacks along with whatever product came in the pipelinethere. i think a lot of us felt that was maybe a bit optimistic as well, especially whenyou look at how apple has performed. go back to 2012, when they initiated the dividend.it's not like it's out-performed the market. it really hasn't. so, i would love to seethem juice the dividend to little bit. buybacks are fine. and if we happen to see a tax holidayat some point where they can bring some of
that cash back home, that would probably bea catalyst as well. hill: you mentioned berkshire hathaway's stakein walmart. that is one of the smaller headlines today -- when you look at where the investmentsare, and the big investments that berkshire hathaway makes, we have seen it disclosedthat they have a smaller stake in walmart, mastercard, procter & gamble. they've increasedtheir stake in ibm, phillips 66 and visa. i'm assuming that the visa / mastercard isnot so much that they greatly prefer visa to mastercard. that may have just been simplya slight over weighing issue. it's not like at&t where they outright eliminated theirstake. phillips 66. any insight into the increasein their stake there?
muckerman: not really. i mean, it's one ofthe bigger downstream companies in the u.s., in the world. it could certainly be a playon the chemical side of the business, which, chemicals, they're benefiting from low oilprices, they're benefiting from low natural gas prices. i think the growth in what weuse chemicals for, certainly has a bright future. i think it's more along the linesof not gasoline but the other by-products you're getting out of phillips 66. and they'reputting a lot of money into that business. i think that might be what they're lookingat. and, obviously, energy has been suffering for a while. so maybe there's a value sideto that play, as well.
