there was some news that came out in the 10q this morning it shows that Berkshire sold another 115 million shares of Apple in this last quarter that's berkshire's largest holding and I I think in that vein we'll start with a question from Sherman lamb he is a 27-year-old Berkshire hathway classb shareholder uh from Malaysia and he asks last year you mentioned Coca-Cola and American Express being berkshire's two long duration partial ownership positions and you spent some time talking about the virt virtues of both these wonderful businesses in your recent shareholder letter I noticed that you
have excluded Apple from this group of businesses have you or your investment manager views of the economics of Apple's business or its attractiveness as an investment changed since Berkshire first invested in 2016 uh no I would the but we have sold shares and uh I would say that at the end of the year I would think it extremely likely that apple is the largest common stock holding we have now one interesting thing is that Charlie and I looked at Common Stocks or marketable equities or the things that people love to look at as being businesses
and so when we own a Dairy Queen or we own whatever it may be uh we look at that as a business and when we own Coca-Cola or American Express or apple we look at that as a business now we can buy really wonderful companies in the market as businesses we can't buy all all of them I mean all of the other shares we can't buy 90% or 80% or anything like that but when we look at Coca-Cola and American Express and apple we look at them as businesses now there's differences in tax factors there's
difference in manager responsibility a whole bunch of things but in terms of deploying your money we always look at every stock as a business and we don't we have no way no attempt made to predict markets we have no attempt made to uh uh pick stocks I went through many many years uh doing the wrong thing I got interested in stocks very early and I was fascinated by them and I wasn't wasting my time because I was reading every book possible and everything else but finally I picked up a copy of the intelligent investor in
Lincoln and and there was a few sentences in there that that said much more eloquently than I can say it but if you look at stocks as a business and treat the market as something that's doesn't tell you isn't there to instruct you but it's there to serve you you'll do a lot better over time then if you try to take charts and listen to people talk about moving averages and look at the pronouncements and all of that sort of thing and so that made a lot of sense to me that and the way i'
way I've been allowed that deploy it Charlie and I talked about this of course constantly uh it's changed over the years of the amount of capital we have and kind has changed and all that but the the basic principle was was laid out by Ben Graham in that book which uh I picked up for a couple of dollars and uh and which basically said to me you've been wasting your time now but maybe you can use what you've learned or been reading about and put it to better use and then Charlie came along and told
me how to put it to even better use and that's sort of the uh story of why we own American Express which is a wonderful business we own Coca-Cola which is a wonderful business and we own Apple which is an even better business and we will own unless something really extraordinary happens we will own apple and American Express and Coca-Cola when Greg takes over this place and and uh it it it's such a simple approach that almost deceptive most things if you keep working harder and harder at it you know you learn a little more
math or you learn a little more physics but Investments you don't really have to do that you really have to have your your minds set properly so so we will we will end up andless something dramatically happens that really changes Capital allocation uh a strategy we will have apple as our largest investor M but I don't mind at all under current conditions building uh the uh cash position I think uh when I look at the alternative of what's available in the equity markets and I look at the composition of what's going on in the world
we find it quite attractive and one one thing that may surprise you but uh uh we almost everybody I know pays a lot more attention to not paying taxes than I think they should we we we we don't mind paying taxes at Burkshire and we are paying a 21% federal rate on the gains were taking in in uh apple and that rate was 35% not that long ago and it's been 52% in the in the past when I've been operating and uh the government all owns the federal government owns a part of the earnings of
the business we make they don't own the assets but they own a percentage of the earnings and uh they can change that percentage any year and the percentage that they've decreed currently is 21% and I would say with the present fiscal policies uh I think that something has to get give and I think that the higher taxes are are quite likely and the government wants to take a greater share of your income or mine or bures they can do it and uh they may decide that someday they don't want the fiscal deficit to be this
large because that has some important consequences and they may not want to decrease spending a lot and they may decide they'll take a larger percentage of what we earn and we'll pay it and we always hope at Berkshire to pay substantial federal income taxes we think it's appropriate that a company the country that's been as has been as generous to our owners it's it's been the place I was lucky Berk was lucky was here and uh uh if we if we send in a check like we did last year we sent in over5 billion to
the US federal government and if 800 other companies had done the same thing no other person in the United States would have had to pay a dime of federal taxes whether income taxes no social security taxes no estate taxes no it's open and down the line now that's that's uh I would I would like to I I hope things develop well enough with burshire that we we say we're in the 800 club and uh and maybe even move up a few notches uh it doesn't bother me in the least uh to write that check and
uh I would really hope with the all of America's done for all of you shouldn't bother you that we do it and if if I'm doing it at 21% this year and we're doing it at a higher percentage later on I don't think you'll actually mind the the fact that uh we sold a little apple this year
