- Warren Buffett made "one of the best investments ever" when he bought Apple stock, investor Bill Brewster told Business Insider this week.
- "It's a perfect example of what makes him great and why Berkshire has a bright future," the Sullimar Capital Group boss and "Value: After Hours" cohost said.
- Buffett's $10 billion Dominion Energy deal and apparent $5 billion in share buybacks is a positive sign for both Berkshire and the nation as a whole, Brewster said.
- Brewster also called for Buffett to use Berkshire's cash to "press the advantage" and capitalize on competitors' current weakness.
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Warren Buffett has been dismissed as "washed up" and told to reinvent himself after failing to deploy Berkshire Hathaway's $137 billion cash pile during the coronavirus crash.
But Bill Brewster — a Berkshire shareholder who runs Sullimar Capital Group and cohosts the "Value: After Hours" podcast — told Business Insider this week that the famed investor remains as sharp as ever.
"The criticism is laughable," he said. "Buffett made one of the best investments ever when he bought Apple."
Berkshire shelled out about $35 billion to amass 245 million of the iPhone maker's shares between 2016 and 2018. Apple stock has soared since then, boosting the value of Berkshire's stake to north of $90 billion today — a gain of more than $55 billion.
Brewster underscored the difficulty of making an investment of that size.
"It's nearly impossible to put that kind of money to work," he said, especially in "one of the most well-known companies in the world at a time many others were scared."
"It's a perfect example of what makes him great and why Berkshire has a bright future," he added.
'Press the advantage'
Berkshire has made several significant moves in recent weeks, undercutting claims that Buffett has lost his touch.
The conglomerate struck a $10 billion deal to acquire most of Dominion Energy's natural-gas assets, it appears to have repurchased more than $5 billion of its stock between late April and early July, and it boosted its stake in Bank of America by about $800 million this week.
A more adventurous Buffett bodes well for both his company and his country, Brewster argued.
"It's somewhat comforting to see him committing capital," he said. "I say that as both a shareholder and a citizen."
"In my view, him deploying cash shows his confidence in America going forward."
However, Buffett should make the most of Berkshire's deep pockets and steal a march on its weakened competitors in insurance and other sectors, Brewster said.
"It's time to press the advantage he's gained by saving all this capital."
History may be repeating itself
Buffett hasn't commented on the current boom in day trading or the breathless rise of tech stocks in recent weeks. Brewster wishes he would.
"I'd be very curious to know what period of time today's market reminds him of," he said.
"The parabolic move in some equities seems eerily similar to the late 90s," Brewster added. "I'd love his thoughts on that."
The next best thing is probably Buffett's description of the euphoria during the dot-com bubble in his letter to shareholders for the year 2000.
"Nothing sedates rationality like large doses of effortless money," the Berkshire chief wrote 20 years ago.
Many of the people speculating on overvalued companies know it won't end well, he continued, but they "nevertheless hate to miss a single minute of what is one helluva party."
Perhaps fittingly, Buffett compared the hype around tech stocks to a contagious disease.
"It was as if some virus, racing wildly among investment professionals as well as amateurs, induced hallucinations in which the values of stocks in certain sectors became decoupled from the values of the businesses that underlay them," he wrote.
Now the Nasdaq is testing new highs and day traders are proclaiming "stocks only go up" in the middle of a raging pandemic, Buffett might be tempted to copy-paste his warning.
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