QuestionerThe next question comes from Elie Amin Tibet, who asks, during an episode of Investing the Templeton Way podcast, Professor Damodaran, who he respects almost as much as Warren and Charlie, mentioned that he is not comfortable with positions becoming a large part of his portfolio. For example, when they reach 25 to 35 percent, he mentioned that Apple is now 35 percent of Berkshire's portfolio and thinks that that is near a danger zone. And wonders if Warren and Charlie can comment.
WarrenWell, I'd like to make one comment first, but Charlie will come up with... I think he's out of his mind. Yeah, I knew that. That was coming. But Apple is not 35 percent of Berkshire's portfolio. Berkshire's portfolio includes the railroad, the energy business, garadamels, you name it, seize candy. They're all businesses. And, you know, the good thing about Apple is that we, we can go up. They buy in their stock, and instead of owning 5.6%, you know, they get down to, they got about 15 billion, 700 and some million shares outstanding. They get down to 15 and a quarter billion without us doing anything. We've got 6%. So we can't own more than 100% of the BNSF. We can't own more than 100% of granables or seize candy. And it'd be nice. We'd love to own 200%. but that just isn't doable. But they're all the same, they're good businesses. And to think that our criterion, our criteria for Apple is different than the other businesses we own. It just happens to be a better business than any we own. And we put a fair amount of money in it, but we haven't got more money in it than we've got in the railroad. And Apple is a better business. Our railroad is a very good business, but it's not remotely as good. as Apple's business. Apple, you know, has a position with consumers where they're paying, you know, maybe they pay $1,500 or whatever it may be, for a phone, and these same people pay $35,000 for having a second car. And if they had to give up a second car or give up their iPhone, they'd give up their second car. I mean, it's an extraordinary, probably we don't have anything like that that that we own. 100% of
Charliecharlie do you want to add anything to your earlier comment well i think one of the in name things that's taught in modern university education is that a vast diversification is absolutely mandatory in investing in common stocks that is an insane idea it's not that easy to have a vast plethora of good opportunities that are easily identified and if you've only
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Charliegot three. I'd rather be in my best ideas instead of my worst. And some people can't tell their best ideas from their worst. And in the act of deciding that the investment is good, they get to thinking it's better than it is. I think we make fewer mistakes like that than other people. And that is a blessing to us. We're not so smart, but we kind of know where the edge of our smartness is. is a very important part of practical intelligence. And a lot of people who are geniuses on IQ tests think they're a lot smarter than they are. And what they are is dangerous. And but if you know the edge of your own ability pretty well, you should ignore most of the notions of our experts about what I call de-worsification of portfolios. Okay.