Some people think that Warren’s purchase of Apple was evidence of a shift to tech stocks. Warren has said jokingly that he saw his grandkids running around with iPhones. That, of course, simplifies Warren’s thinking. Before the iPhone and iPad Apple was a company with unpredictable earnings and, therefore, no predictable value. These two devices changed that, but what, I think, really caught Warren’s attention was the ease of upgrading both devices coupled with the hundreds of apps that we users can easily download. These two capabilities have built an enormous moat around Apple. The cost of converting to a Droid is enormous. Does anyone bother thinking of upgrading to a Droid? No, we go to an Apple Store; the sales person checks to see that the device is currently backed up, transfers your account, and walking/driving home the backup is being restored to the new device. Tim Cook has done a superior job of widening the moat. Apple’s return on invested capital remains very high.
Greg his inheriting a different set of assets, but I’m confident that Warren has encouraged him to do what is right.
Hi Arthur - Agreed on all counts. The thing that really fascinates me about Apple and iPhone in particular is that its grip on younger customers never really seems to fade. Every year, there is a big survey of teenagers and iPhone always scores big ratings with a large percent of the next generation intending to buy one. It seems like this train will keep rolling on for quite a while if it remains a must-buy for teenagers.
Another insightful article, Kevin!
Some people think that Warren’s purchase of Apple was evidence of a shift to tech stocks. Warren has said jokingly that he saw his grandkids running around with iPhones. That, of course, simplifies Warren’s thinking. Before the iPhone and iPad Apple was a company with unpredictable earnings and, therefore, no predictable value. These two devices changed that, but what, I think, really caught Warren’s attention was the ease of upgrading both devices coupled with the hundreds of apps that we users can easily download. These two capabilities have built an enormous moat around Apple. The cost of converting to a Droid is enormous. Does anyone bother thinking of upgrading to a Droid? No, we go to an Apple Store; the sales person checks to see that the device is currently backed up, transfers your account, and walking/driving home the backup is being restored to the new device. Tim Cook has done a superior job of widening the moat. Apple’s return on invested capital remains very high.
Greg his inheriting a different set of assets, but I’m confident that Warren has encouraged him to do what is right.
Hi Arthur - Agreed on all counts. The thing that really fascinates me about Apple and iPhone in particular is that its grip on younger customers never really seems to fade. Every year, there is a big survey of teenagers and iPhone always scores big ratings with a large percent of the next generation intending to buy one. It seems like this train will keep rolling on for quite a while if it remains a must-buy for teenagers.
Excellent!
Thanks Marcelo!