Charlie Munger, the vice chairman of Berkshire Hathaway BRK BRK has reaffirmed his belief in the potential of Apple Inc. AAPL stocks, brushing off worries over the tech titan’s valuation.
What Happened: Earlier this week, The Wall Street Journal engaged Munger in a conversation about his views on Apple’s stocks.
As it stands, the tech giant’s shares are trading at 26.7 times the expected earnings for the next year, a considerable jump from the 10-year average of 18.5.
Munger remained unfazed by the valuation concerns.
He asserted, "I don't think we've got any rules about what we do at Berkshire. If it makes sense at the time in a rough kind of way, we do it. And that's our system."
The vice chairman further contended that the absence of Apple in Berkshire’s portfolio would be a setback for its future.
Why It Matters: Munger and Warren Buffett have played pivotal roles in the transformation of Berkshire Hathaway into a massive corporation with substantial holdings and significant financial reserves.
The duo’s investment prowess is once again under the spotlight with the imminent release of Berkshire’s third-quarter financials.
Their enduring faith in Apple, despite its high valuation, highlights their strategic investment approach, which focuses on long-term gains rather than short-term fluctuations.
It is worth noting that Apple has been among Berkshire's most successful investments, which the latter first purchased sometime in the first quarter of 2016.
Since the start of that year to Oct. 27, the top FAANG stock has skyrocketed 540%, a gain that crushed the 153% rise of the Nasdaq Composite during that time, reported The Motley Fool.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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