In a recent reflection, Warren Buffett, often dubbed the world’s greatest investor, reminisced about a 2012 conversation with Steve Jobs regarding Apple’s cash reserves. The discussion resurfaced following Apple’s impressive third-quarter earnings report.
During the conversation, Jobs sought Buffett’s advice on managing Apple’s substantial cash reserves. Buffett, known for his role as the chairman of Berkshire Hathaway, outlined several strategies: stock buybacks, dividends, acquisitions, or simply retaining the cash. Jobs considered these options but was particularly interested in stock buybacks, noting his belief that Apple’s stock was significantly undervalued.
Despite Buffett’s recommendations, Jobs chose not to act on the advice. Buffett shared that Jobs ultimately decided to do nothing with the cash, preferring instead to hold onto it. “He just liked having the cash,” Buffett recounted with a chuckle. This decision, according to Buffett, reflected Jobs’ preference for maintaining a substantial cash reserve rather than pursuing aggressive financial maneuvers.
Apple’s approach to its cash reserves has evidently persisted. The company’s earnings report for the quarter ending March 31, 2024, shows a notable increase in cash on hand, reaching $67.150 billion—a 20.19% year-over-year rise. This suggests that Apple’s strategy of maintaining large cash reserves remains consistent, even beyond Jobs’ tenure.
Buffett’s anecdote highlights a pivotal moment in Apple’s financial strategy and underscores the enduring practice of holding significant cash reserves, which continues to characterize the company’s financial approach today.
I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna Sahu holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.
