Berkshire Hathaway and Apple prove individual stock picking succeeds
- Individual stock investing continues to face persistent skepticism from market commentators, even as retail trading volumes have risen to account for up to 20 percent of overall market...
- This persistent skepticism often stems from the advice and example of Warren Buffett.
- While Berkshire has held stakes in companies like Coca-Cola and American Express, neither is currently viewed as a standout growth engine.
Individual stock investing continues to face persistent skepticism from market commentators, even as retail trading volumes have risen to account for up to 20 percent of overall market volume over the last couple of decades. Critics frequently disparage retail participants as mere speculators, contrasting them with professional investors or S & P 500 index buyers.
This persistent skepticism often stems from the advice and example of Warren Buffett. However, an individual investor holding Berkshire Hathaway stock would have far outperformed an S & P 500 fund. Furthermore, a deeper look at the Berkshire portfolio reveals that a significant portion of Buffett’s outperformance in the last decade came from a single concentrated position: Apple.
The Reality of Berkshire Hathaway and Apple
While Berkshire has held stakes in companies like Coca-Cola and American Express, neither is currently viewed as a standout growth engine. Buffett’s massive stake in Apple arrived in 2016, following his observation that kids were constantly glued to their iPhones. This illustrates that individual investors are entirely capable of identifying major winning stocks through everyday consumer observations and hard empirical data, such as products that scale and maintain high customer satisfaction in the highest of the 90th percentile.
Leadership Changes at Berkshire and Apple
As retail investors continue picking individual equities, leadership transitions are taking place at major corporate institutions. At Berkshire Hathaway, Howard Buffett took over the chairmanship earlier this month, while Greg Abel assumed the CEO role in January. Meanwhile, Tim Cook moved to executive chairman after 15 years as Apple CEO, leaving behind a legacy defined by consistently exceptional customer metrics.
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