Buffett addresses stake in Apple, Occidental Petroleum, and issues warning about the streaming business

Warren Buffett addressed his stake in Apple and Occidental Petroleum (OXY), and shared his concerns about the video streaming business on Saturday.

Buffett hosted the Berkshire Hathaway Annual Shareholders Meeting in his hometown of Omaha, Nebraska. The legendary investor was joined by Berkshire Hathaway (BRK-A) Vice Chairman Charlie Munger.

When asked about his investment in Apple (AAPL), Buffett said, “I don't understand the phone at all, but I do understand consumer behavior."

“Apple is not 35% of Berkshire's portfolio… it just happens to be a better business than any business we own.”

He later made comments about his strategy in the energy sector, telling Berkshire shareholders the holding company is not "going to be making an offer for control of Occidental [Petroleum].”

Find more special coverage of the 2023 Berkshire Hathaway Annual Shareholders Meeting on YahooFinance.com.

Video Transcript

BRIAN SOZZI: Of course, we have a rapid-fire section for you as well, hitting a lot of these favorite Yahoo Finance tickers. First off, Apple, of course, Apple is a key holding inside of Berkshire Hathaway. And Myles, naturally, it took a little while to get that Apple question. But it was interesting how it was posed to them.

MYLES UDLAND: It did. And we kind of got to it in two ways. I think what will draw the headlines is Buffett saying, I don't understand the product at all, or I don't understand the phone, but I understand the business. He understands the business of selling phones not necessarily how one makes a phone.

But that also got into really what I think-- Apple has become the most instructive holding within Berkshire's portfolio. They pay a huge dividend. So every quarter, they're getting hundreds of-- they're getting $100 million check, or it's not-- it's much larger than that. But nine-figure check coming to Berkshire Hathaway.

Second thing, they buy back a lot of stock. So Berkshire's holdings in Apple, its percentage of the company that it owns, has gone up organically over time. We saw the announcement on Thursday night from Apple increasing the size of that buyback authorization. So it's going to continue to go up.

And it led to this discussion of how much Apple do you really own? And you look at the equity portfolio. It's about 40%. And Buffett was like, it's not 40%. We own a bunch of other stuff, See's Candies. Garanimals got tons of runs today, kids clothing brand, tons of run today.

But basically being like we're not 35% Apple because our equity holdings are only a small chunk of the whole Berkshire family.

BRIAN SOZZI: You look at Apple. And you have to think, is this the new Coca-Cola for this generation in terms of an investment for Warren Buffett? Is this Warren Buffett connecting with that next generation of investors?

MYLES UDLAND: I mean, I think look, you can kind of say-- and Buffett would probably say this. It doesn't really matter what the product is. They have a dominant position in the market. They make a ton of money. They return a bunch of that money to shareholders. So whether you're selling Coca-Cola or you're selling iPhones, it hits all those criteria.

And whatever generation you want to call any company coming from, Buffett's going to like those characteristics.

BRIAN SOZZI: Next up, rapid fire session here. Paramount, of course, on Friday, the stock got absolutely slaughtered, slashing its dividend, bad quarter, lots of losses. And one thing that stuck with me from that quarter from Paramount, Myles, when I talk to AmEx's CEO Steven Squeri-- that story is on our home page now. He says, do not surprise Warren Buffett.

To me, he sounded surprised at this event. He did not come out and say, Bob Bakish is a phenomenal manager. Of course, that's the CEO of Paramount. He didn't do it. He didn't do it.

MYLES UDLAND: Well, we just talked about how Warren Buffett likes companies that return a lot of capital to shareholders. What did Paramount come out and do on Thursday? They cut their dividend. And Buffett says, never good when a company announces a material cut to their dividend. You're trying to shore up your capital position when you can't give it back to your owners basically.

So I'll be interested to see what happens with that position. It kind of-- it's a small part of the Berkshire equity portfolio. It kind of came up-- I don't want to say out of nowhere. He has a long history of investing in the media business. But all of a sudden, it's like, oh, Buffett owns a bunch of Paramount. Now he owns 93 million shares of the company.

And so we get into the conversation about the streaming wars. And I thought his comments on your eyeballs were quite hilarious.

BRIAN SOZZI: Yeah, eyeballs matter. But in that--

MYLES UDLAND: He goes, everyone loves to use their eyes.

BRIAN SOZZI: No, yes. It's key. He's clearly bullish eyes. But in that context, there's a lot of competition for our eyeballs, which is why I think that stake in Paramount, disclosed in November last year, raised a lot of eyebrows because it wasn't really Warren Buffetty.

MYLES UDLAND: I think everyone thinks the same thing. And look, the 13-F will come out, I guess, what, middle of next week, what they did or didn't do in the first quarter. So I think some questions there with that position.

BRIAN SOZZI: We're keeping moving here, Taiwan Semiconductor a position that Buffett took-- what was it, late last year? And then he exited it very quickly, not a very Warren Buffett type of move. But he did hear a lot of praise on that company.

MYLES UDLAND: Yeah, I mean, I'll kick this one right back to you because you wrote up a quick story for us on this one. He heaped a lot of praise on it. And he kind of had a-- I don't know. I couldn't make sense of exactly what the point was on not wanting exposure to Taiwan but saying US-China relations might be fine. Everyone has blame. I couldn't quite sort that one out.

BRIAN SOZZI: Yeah. And if you're an Intel and you're a lot of these other chip-makers, to not hear Warren Buffett say you're doing cool stuff, eh, not exactly a great thing.

Lastly, Occidental Petroleum, of course, a lot of investors have been watching Warren Buffett build its position or his position in Occidental Petroleum under the potential, maybe he goes out and just buys the darn company. But Warren said, eh, eh, eh, unlikely to happen.

MYLES UDLAND: He came-- he was very blunt. We were not going to make a play to take control of the company. They have approval to buy up to 50% of the outstanding shares. I think they own about 25% today. But yeah, there was an analyst that talked to our Ines Ferre and Josh Shafer last week who surmised maybe Vicki Hollub, CEO, would come in and run Berkshire Hathaway Energy when Greg Abel moves on. I mean, maybe that could happen.

BRIAN SOZZI: Ooh, that's good.

MYLES UDLAND: Yeah, it was a good one in the story. But Buffett kind of squashing that today.

BRIAN SOZZI: And then final takeaways. Myles, to you first.

MYLES UDLAND: Really crowded. Man, this place is crowded. Yesterday, extremely stressful going in the convention hall.

BRIAN SOZZI: For me, two takeaways. One, amazing to see Warren Buffett, 92 years old, Charlie Munger, 99 old, answering all these questions, in top form. I'm just fascinated by the whole thing. And the next, last but not least, on Monday, "the Morning Brief" newsletter, please do check that out, subscribe, whatever. We're looking into the succession battle-- not battle, succession plan here for Warren Buffett and Berkshire Hathaway, lots of interesting little nuggets that our team pulled here from the event.

But that's it for yours truly and Myles Udland. We're going to get back and get some air conditioning. It's a little warm here in Omaha, Nebraska. We'll see you guys later.