we would have been a a lot better in all of our stock picking if we could do it in retrospect. But but at the time we have a big position American Express and there is one tiny cloud on the horizon of the payments processors and and that that is the system of WeChat in China and and so it isn't as though there isn't a little cloud somewhere off in the and I don't have the faintest idea how important that cloud is and I don't think Warren does either. Now, now payments, payments are a huge deal worldwide and you've got all kinds of smart people working in various ways to change the payment arrangements to destroy what we have now.
Sure. Sure. And you got some very smart people that that you know I am that are building a company and American Express made a decision a few years ago uh not to uh bid as low as somebody else did to retain the Costco business.
And I think Charlie and I disagree on this. I think it was a smart decision. He doesn't think it was a smart decision.
But one of us will be right and and one of us will remind you that they were [Laughter] right. They uh but if you look at the American Express, it is it's a remarkable company. I mean, you know, they came after him with Sapphire last year.
people want that business and payments are changing and you can see in different countries different different ways things are going on and that and and there are a lot of people that will play the game of gaming the system and switch from one to another based on the rewards on this card or that and all of that sort of thing but there also is a I think there's a very substantial uh group for which American Express does something very special and uh and they keep capitalizing ing on that premier position with that group. Uh and they and they're doing it successfully around the country. And you'll see in the first quarter, you've seen in the first quarter, you know, where in in Britain and Mexico and Japan, you're seeing gains of 15% or better in local currencies and the base is not it's not tiny, but it's not huge.
So, there's a lot of room left to go in that. And and the small business penetration is good. The loan portfolios behave sensationally.
uh compared to uh really just about anybody. So I like very much our holdings of American Express. The first half because of the accounting changes they had to uh suspend their repurchase program for six months, but I they've announced that they expect to renew it and someday we'll even you know we'll own a greater percentage of American Express and it'll be a bigger company in my opinion and I think we'll do very well.
But as Charlie says, nobody knows how payments is for sure comes out. And and nobody knows how autos for sure come out. And there that is true of a great many businesses we're in.
And we faced it before. We used to buy things that were certain failures like textiles and second rate department stores and trading stamps in California. Now we just face things that face real difficulty.
So we're actually moving up the the ladder. Apple has a incredible consumer product which you understand a lot better than I do. Um whether they should buy in their share, they shouldn't buy in their shares at all unless they think that they're selling for less than their they're worth.
uh and if they are selling for less than they're worth and they have the money and they don't see an acquisition that's even more attractive, they should buy in their shares. And I think that that's very because I think it's extremely hard to find acquisitions that would be accreative to Apple that would be in the 50 or 100 billion or $200 billion range. Uh they do a lot of small acquisitions.
Uh, and you know, I'm delighted to see them repurchasing shares. We own, let's say, we own 250 million or so shares. They have, I think, 4 billion, 923 million or something like that.
if you uh and mentally you can say we own 5% of it but I figure when you know with the passage of a little time we may own six or 7% simply because they repurchase shares and I find it we've got an extraordinary product and ecosystem and there's lots to be done. I love the idea of having our 5% or whatever it may be grow to six or 7% without us laying out a dime. I mean it uh it's worked for us in many other situations.
Uh but you have to have some very very very special product and uh uh which has uh an an enormous wide enormously widespread ecosystem and the products extremely st and they're not going to find 50 or hundred billion dollar acquisitions that they can make it remotely a sensible price that really uh become additive to that and they may they may find it. Who knows? But there certainly as I look around the horizon, I don't see anything that would make a lot of sense for them uh in terms of what they'd have to pay and what they would get.
Whereas I do see a business that they know everything about and where they uh uh may or may not uh be able to buy it at an attractive price when they repurchase their shares. That remains to be seen. Incidentally, that's one thing that I always enjoy.
People people say, "Well, you're talking your book or something if you talk. " From our standpoint, we would love to see Apple go down in price. And that they're going to well, just put it this way.
If Andrew and Charlie and I were partners in a business that was worth $3 million, so each of us had a million dollar interest in it. If Andrew offered to sell out his one-third interest at 800,000 and we had the money around, we'd jump at the chance to buy him out. I mean it's so simple but people get all lost and if he want a million two for it we wouldn't pay it to him.
It's it's very simple math but it gets lost in all these discussions and of course uh like I say Tim Cook can do simple math and he'd probably do very complicated math too. So we we very much approve of them repurchasing shares. Charlie, I think generally speaking in America when companies go out hellbent to buy other companies, they do they're worth less after the transaction is made than they were before.
So I don't think you have a general weight of wealth for American corporations to go out and buy other corporations. Averaged out, it's a way down, not up. And I think that a great many places have nothing better to do than to buy in their own stock and nothing as advantageous to do as they can as buying in their own stock.
So I think we know pretty damn well what's going to happen to Apple. They'd be very lucky if there was something available at a low price that they could buy. It's I don't think the world's that easy.
I think that the the reason these companies are buying their stock is that is that they're smart enough to know that it's better for them than anything else. That that does not mean we approve of every buyback at all, though. I mean, we've seen No, no, no.
I think some people just buy it to keep the stock up, and that of course is insane and immoral. But apart from that, it's fine.
