CNA Finance | May 16, 2016 11:38AM ET
Apple (NASDAQ:AAPL) is having a strong day in the market and the gains are understandable. Billionaire investor, Warren Buffett invested a large amount of money in the company. However, is Buffett making a mistake here? Today, we'll talk about the investment made, why I believe it's a mistake and what we can expect to see from AAPL moving forward.h3 Warren Buffett Sinks Money Into AAPL/h3
When billionaires invest, the general investing population tends to follow. However, this one is pretty interesting. You see, for quite some time now, Buffett has been an Apple skeptic. So, it's a bit of a surprise that he would make such a large bet. In a recent SEC filing, it was disclosed that Warren Buffett's hedge fund, Berkshire Hathaway (NYSE:BRKa), acquired 9,811,747 shares of AAPL. That's a total value of $1.069 billion.
h3 Did Buffett Make A Mistake?/h3I have to say that this investment is likely to prove to be a mistake. The reality is that Apple isn't in the best of places at the moment. In fact, the value of the stock recently took a dive due to a poor earnings report, and worse yet, the outlook for the current quarter isn't looking very positive either. The problem with AAPL is relatively simple. The company's flagship product just doesn't seem to be doing very well anymore. Sales of the iPhone are starting to decline, and for good reason. In fact, there are three of them!
Moving forward, I have a relatively mixed opinion of what we can expect to see from Apple. In the short term, investor excitement is likely to keep the upward trend running. However, in the long term, I see more problems with sales causing issues with the value of the stock. As a result, I expect to see long-run declines on AAPL moving forward.
What Do You Think? Where do you think AAPL is headed and why?
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