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Berkshire Boosts Airline Stakes; Takes Huge Bite Of Apple

Berkshire Boosts Airline Stakes; Takes Huge Bite Of Apple
Nearly quadrupling its stake in Apple Inc and increasing its stake sevenfold in the four biggest U.S. airlines, Warren Buffett's Berkshire Hathaway Inc was an aggressive buyer of stocks in last year's fourth quarter.
Up from just from 15.2 million shares in the iPhone maker three months earlier, Berkshire reported owning 57.4 million shares of Apple as of Dec. 31, which would now be worth $7.74 billion in a regulatory filing.
With investments topping $2.1 billion in each of American Airlines Group Inc, Delta Air Lines Inc, Southwest Airlines Co and United Continental Holdings Inc., Berkshire also reported a $9.3 billion airline stake.
New stakes in seed company Monsanto Co, which is being bought by Germany's Bayer AG and in satellite radio company Sirius XM Holdings Inc were also disclosed by it.
Buffett had said that he had bought between the Nov. 8 Presidential election and the end of January and the filing appears to reflect much of that $12 billion of stock although it is unclear who make which investments.
While the 86-year-old billionaire has given his deputies Todd Combs and Ted Weschler more to invest over the years, larger Berkshire investments such as Wells Fargo & Co, Coca-Cola Co and International Business Machines Corp are normally Buffett's.
Given Buffett's usual aversion to technology companies - apart from IBM - which he considers outside his zone of competence, Berkshire's initial investment in Apple got attention last year.
One of Apple's 10 biggest investors is Berkshire given the new, larger stake.
"I'm stunned to see the size of that Apple position," said Thomas Russo, who oversees $11 billion of assets, including 12 percent in Berkshire, at Gardner Russo & Gardner in Lancaster, Pennsylvania.
There were no comments from Berkshire.
Roughly 90 companies such as the BNSF railroad, Geico car insurance and Dairy Queen ice cream, are owned by the Omaha, Nebraska-based conglomerate.
Since hares of Apple are at a record closing high and closed on Tuesday up $1.73 at $135.02, also a record closing high, analysts say that the investments into Apple are particularly well-timed.
Apple's 16.6 percent gain this year would leave it with a $1.1 billion paper profit in 2017 alone assuming Berkshire has not sold its stake.
Berkshire's initial investment came from Combs or Weschler, analysts widely believe.
But as when Berkshire last year paid $32.1 billion for aircraft parts maker Precision Castparts Corp, once a Combs investment, their decisions have sometimes influenced Buffett.
"It's quite possible that Warren woke up and began to understand the virtues of Apple that he had been neglecting or, like with Precision Castparts, Todd or Ted had an affinity for Apple that sparked interest from Warren," Russo said.
To eventually succeed Buffett as Berkshire's chief investment officer are Combs and Weschler.
It was "in large part" his decision to dive back into airlines, Buffett told talk show host Charlie Rose in an interview last month.
"The industry was once balkanized, but now it is bulking up, and has come to realize that an empty seat is a perishable asset," Russo said. "More planes are traveling more full."

Christopher J. Mitchell

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