Profit is the single and the most important word that can explain the decision of investing in Apple and Amazon made by Warren Buffett in recent times.
While comparing the two investments, Buffett last week rued at his decision in not putting in money in Amazon shares while revealing his process of significantly adding to Apple’s stake through his investment company Berkshire Hathaway.
The investment philosophy of Buffet apparently is to focus on a company's historical financial track record and combining it with the confidence he has on the future plans of the company.
"I think it's fair to say, we've never looked at a [analyst] projection in connection with either a security we've bought or a business we've bought," Buffett said during a Berkshire Hathaway annual shareholder meeting in 1995, according to remarks aired on CNBC.
Apple "is an unbelievable company," Buffett had said on May 3. "If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States."
While making a $13.8 billion net profit in the first quarter of the current fiscal, Apple also reported $48.35 billion in profit during its fiscal 2017.
Compared to that only about $9.6 billion has bene the total net income of Amazon since inception. This number was arrived at by summing up all of the annual profits made by the company since it was set up till the March 2018 quarter.
"We are in the sweet spot between Amazon investment cycles where new fulfillment/data centers are driving accelerating revenue growth while incremental capacity utilization is driving margin expansion," Goldman Sachs analyst Heath Terry wrote in a note to the clients. "We still remain in the early stages of the shift of compute to the cloud and the transition of traditional retail online and, in our opinion, the market is underestimating the long-term financial benefit of both to Amazon."
Now one of the reasons for Buffet getting attracted to Amazon despite its low profits compared to Apple is because of his putting less credence on aggressive future forecasts and valuing potential. And hence he has been attracted to Apple while ruing not having invested in Amazon’s shares sooner.
(Source:www.cnbc.com)
While comparing the two investments, Buffett last week rued at his decision in not putting in money in Amazon shares while revealing his process of significantly adding to Apple’s stake through his investment company Berkshire Hathaway.
The investment philosophy of Buffet apparently is to focus on a company's historical financial track record and combining it with the confidence he has on the future plans of the company.
"I think it's fair to say, we've never looked at a [analyst] projection in connection with either a security we've bought or a business we've bought," Buffett said during a Berkshire Hathaway annual shareholder meeting in 1995, according to remarks aired on CNBC.
Apple "is an unbelievable company," Buffett had said on May 3. "If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States."
While making a $13.8 billion net profit in the first quarter of the current fiscal, Apple also reported $48.35 billion in profit during its fiscal 2017.
Compared to that only about $9.6 billion has bene the total net income of Amazon since inception. This number was arrived at by summing up all of the annual profits made by the company since it was set up till the March 2018 quarter.
"We are in the sweet spot between Amazon investment cycles where new fulfillment/data centers are driving accelerating revenue growth while incremental capacity utilization is driving margin expansion," Goldman Sachs analyst Heath Terry wrote in a note to the clients. "We still remain in the early stages of the shift of compute to the cloud and the transition of traditional retail online and, in our opinion, the market is underestimating the long-term financial benefit of both to Amazon."
Now one of the reasons for Buffet getting attracted to Amazon despite its low profits compared to Apple is because of his putting less credence on aggressive future forecasts and valuing potential. And hence he has been attracted to Apple while ruing not having invested in Amazon’s shares sooner.
(Source:www.cnbc.com)
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