Warren Buffett's Biggest Mistake Has Now Cost Berkshire Hathaway Up to $112 Billion (but I Don't Blame Him)

Berkshire Hathaway sold 687,642,574 Apple shares—about 75% of its stake—during Warren Buffett’s final nine quarters as CEO, forgoing as much as $112 billion in subsequent gains as Apple’s shares nearly doubled. The article argues the sale was defensible because Apple’s valuation rose from a trailing P/E just over 10 when Berkshire began buying in 2016 to nearly 38 times forecast 2026 earnings. Greg Abel succeeded Buffett on Dec. 31 and now oversees Berkshire’s $350 billion investment portfolio.

Analysis

Treat the reported foregone upside as hindsight, not evidence of a broken investment process: the sale is sunk, and Berkshire’s future returns now depend more on how Greg Abel allocates capital than on the price at which a past Apple position was trimmed. A valuation-led reduction could prove prudent if Apple’s earnings growth fails to catch up with its multiple; it could also leave Berkshire underexposed if services, device replacement, or AI features produce durable monetization.

For Apple, the second-order risk is asymmetric: a high valuation leaves less room for ordinary execution, while any disappointment in upgrade demand or services growth can compress the multiple before earnings estimates fall. Conversely, evidence of paid AI adoption or accelerating installed-base monetization would challenge the bearish valuation case. Near term, this is mainly a sentiment narrative; over 1–3 months, watch guidance and estimate revisions; over 6–18 months, the test is whether new products and services sustain growth sufficient to support the valuation.

For Berkshire, cash has option value only if Abel deploys it at attractive returns; prolonged low-return accumulation could weigh on the conglomerate’s perceived capital-allocation edge. The article provides no current valuation, cash deployment plan, or independently verified Apple growth outlook. Avoid treating its stated valuation multiple as a standalone short signal. The contrarian point: the sale’s opportunity cost is vivid, but does not establish that holding the concentrated position would have been the better risk-adjusted choice.

Key Decisions for Investors

• No immediate trade on the retrospective sale narrative. Do not short AAPL solely because the article characterizes its valuation as elevated; first verify current forward multiples, consensus earnings revisions, and services growth.
• Set an AAPL downside alert if guidance or estimates weaken while the valuation remains stretched; only then consider a defined-risk put spread, with size limited by the possibility that AI monetization or stronger replacement demand sustains growth.
• For a 1–3 month catalyst watch, track Apple earnings commentary on upgrade demand, services, and monetization of new AI features. The valuation-compression thesis is weakened by upward estimate revisions and demonstrated paid adoption.
• For Berkshire Hathaway (BRK.A), monitor Abel’s capital-allocation disclosures and cash deployment rather than extrapolating Buffett’s past Apple decisions. Reassess if cash remains persistently underproductive or if deployment terms indicate materially lower expected returns.