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2021-08-11

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Apple Inc. And Buffett: Why He Bought And Why He Holds<blockquote>苹果和巴菲特：巴菲特为何买入和持有</blockquote>

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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":892191604,"tweetId":"892191604","gmtCreate":1628642279208,"gmtModify":1631890436301,"author":{"id":3561932898161790,"idStr":"3561932898161790","authorId":3561932898161790,"authorIdStr":"3561932898161790","name":"ChoongHwee","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":11,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":6,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body>Good</body></html>","htmlText":"<html><head></head><body>Good</body></html>","text":"Good","highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/892191604","repostId":1138697562,"repostType":4,"repost":{"id":"1138697562","kind":"news","pubTimestamp":1628642042,"share":"https://www.laohu8.com/m/news/1138697562?lang=zh_CN&edition=full","pubTime":"2021-08-11 08:34","market":"us","language":"en","title":"Apple Inc. And Buffett: Why He Bought And Why He Holds<blockquote>苹果和巴菲特：巴菲特为何买入和持有</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1138697562","media":"Seeking Alpha","summary":"Summary\n\nThis article analyzes Apple under the context of it being the largest holding in the Buffet","content":"Summary<blockquote>总结</blockquote> <ul> <li>This article analyzes <a href=\"https://laohu8.com/S/AAPL\">Apple</a> under the context of it being the largest holding in the Buffett portfolio.</li> <li>This analysis approaches the purchase under a framework that I call the Buffett’s 10x Pretax Rule.</li> <li>And this analysis argues that Buffett holds the AAPL shares in the long term for its perpetual growth prospects, offering double-digit return even under its current expensive valuation.</li> </ul> <img src=\"https://static.tigerbbs.com/24b65798f03c6f9376257bba2741e588\" tg-width=\"768\" tg-height=\"531\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\">Justin Sullivan/Getty Images News<blockquote><ul><li>本文分析了<a href=\"https://laohu8.com/S/AAPL\">苹果</a>在它是巴菲特投资组合中最大持股的背景下。</li><li>这一分析是在我看涨期权巴菲特10倍税前规则的框架下进行的。</li><li>这一分析认为，巴菲特长期持有苹果公司股票是因为其永久增长前景，即使在目前昂贵的估值下，也能提供两位数的回报。</li></ul>贾斯汀·沙利文/盖蒂图片社新闻</blockquote> <h3>The investment thesis</h3> If you are reading this, chances are that you already know that AppleInc. (AAPL) is the largest position in Warren Buffett's Berkshire Hathaway portfolio. When many people wonder if the legend has lost his magic touch, and commented on his blunders with the airline stocks, they forgot that he made more than $100B from AAPL stocks alone! With his concentrated investment style, what he lost on the relatively minor bets such as the airlines is only a footnote.<blockquote><h3>投资论文</h3>如果你正在读这篇文章，很可能你已经知道苹果公司。（AAPL）是沃伦·巴菲特伯克希尔·哈撒韦投资组合中最大的头寸。当许多人怀疑这位传奇人物是否失去了他的魔力，并评论他在航空股上的失误时，他们忘记了他仅从AAPL股票上就赚了超过1000亿美元！以他集中的投资风格，他在航空公司等相对较小的赌注上输掉的只是一个注脚。</blockquote> This article analyzes AAPL under the context of it being the largest holding in the Buffett portfolio. This analysis first approaches his entry decision under a framework that I call the Buffett’s 10x Pretax Rule. And then this analysis argues that Buffett holds the AAPL shares in the long term NOT as a technology stock – he had made it clear enough that he does not understand tech companies and will not invest in them. He must be holding AAPL for its perpetual growth prospects. From this perspective, we will see that APPL will still offer double-digit return in the longer run even under its current expensive valuation.<blockquote>本文在AAPL是巴菲特投资组合中最大持股的背景下进行分析。本分析首先在我看涨期权巴菲特10倍税前规则的框架下探讨了巴菲特的进入决策。然后，这一分析认为，巴菲特长期持有苹果公司股票，而不是将其视为科技股——他已经明确表示，他不了解科技公司，也不会投资它们。他持有苹果公司一定是因为它的永久增长前景。从这个角度来看，我们将看到，即使在目前昂贵的估值下，APPL从长远来看仍将提供两位数的回报。</blockquote> <img src=\"https://static.tigerbbs.com/348a1fb56faeceb8e956ad8f6fa3b09a\" tg-width=\"640\" tg-height=\"645\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source:&nbsp;DataRoma<blockquote>资料来源：DataRoma</blockquote> <h3>Buffett’s 10x Pretax Rule</h3> If you’re a devout Buffett cultist like this author, you must have noticed or heard that the grand master paid ~10x pretax earnings for many of his largest and best deals. The list is a really long one, ranging from Coca-Cola, American Express, Wells Fargo, Walmart, Burlington Northern, and of course the more recent AAPL purchase and his recent $25B&nbsp;repurchases of BRK.A&nbsp;shares as analyzed in my earlier article.<blockquote><h3>巴菲特的10倍税前规则</h3>如果您像这位作者一样是虔诚的巴菲特崇拜者，您一定注意到或听说过这位大师为他的许多最大和最好的交易支付了约10倍的税前收益。这个名单真的很长，包括可口可乐、美国运通、富国银行、沃尔玛、Burlington Northern，当然还有最近对AAPL的收购和他最近对BRK的25B美元回购。A股，正如我之前文章中所分析的那样。</blockquote> The following chart shows the price history of AAPL and its 10x pretax earning since 2010. Pretax earnings are also referred to as \"EBT\", Earning Before Taxes, in this article. As seen, Buffett made his purchases during 2016-2017 when the price is below or near 10x EBT. I was lucky enough to have made the AAPL purchases at that time myself too.<blockquote>下图显示了AAPL的价格历史及其自2010年以来10倍的税前收益。在本文中，税前收益也称为“EBT”，即税前收益。如图所示，巴菲特在2016年至2017年期间进行了购买，当时价格低于或接近EBT的10倍。我很幸运，当时我自己也购买了AAPL。</blockquote> Buffet himself also mentioned and discussed the 10x pretax multiple times in his shareholder meetings and Q&amp;A sessions. An example quote is provided below (highlighting was added by me):<blockquote>巴菲特本人也在股东大会和问答环节中多次提及和讨论了10倍税前。下面提供了一个示例报价（突出显示是我添加的）：</blockquote> Buffett: “Geico would be valued differently than Gen RE and other insurance businesses because it’s rational to assume a large underwriting profit and significant growth. You cannot say that about many insurance businesses. I would love to buy a new bunch of operating businesses with similar competitive positions to the ones we own now at nine to ten times pretax earnings.”<blockquote>巴菲特：“Geico的估值将与Gen RE和其他保险业务不同，因为假设承保利润大且增长显着是合理的。你不能对许多保险业务这么说。我很乐意购买一批新的运营业务，这些业务的竞争地位与我们现在拥有的业务相似，其税前收益为9到10倍。”</blockquote> <img src=\"https://static.tigerbbs.com/9eec812a3eda60f950a1890eebc7dd34\" tg-width=\"640\" tg-height=\"359\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source: author based on Seeking Alpha data<blockquote>资料来源：作者基于Seeking Alpha数据</blockquote> So are there any reasons fundamental to this 10x pretax rule, or is it only a bunch of pure coincidences? I think it is the former and there are indeed many good reasons for this rule, as listed below.<blockquote>那么，这个10倍税前规则有什么根本原因吗，还是只是一堆纯粹的巧合？我认为是前者，这个规则确实有很多很好的理由，如下所列。</blockquote> <h3>First, Why pretax?</h3> Out of all the earning metrics, EPS, operation income, free cash, dividend, etc., why do we favor the pretax earning? I think there are at least two good reasons.<blockquote><h3>首先，为什么要税前？</h3>在所有盈利指标中，每股收益、营业收入、自由现金、股息等，为什么我们青睐税前收益？我认为至少有两个很好的理由。</blockquote> <ul> <li>After tax earnings do not reflect business fundamentals. Taxes can change from time to time due to factors that have no relevance to business fundamentals, such as tax law changes and capital structure change. Plus there are plenty of ways to lower the actual tax burden of a company.</li> </ul> <ul> <li>Pretax earnings are easier to benchmark, say against bond earnings. The best equity investments are bond like, and when we speak of bond yield, that yield is pretax. So a 10x EBT would provide a 10% pretax earning yield, directly comparable to a 10% yield bond.</li> </ul> <h3>Second, why 10x?</h3> Besides being a nice and round number, it passes the/my common sense test. A 10x pretax multiple roughly translate into 12 to 15x PE depending on the tax rates, which is not far off from the long term average of stock valuation. Furthermore, if we buy average business at 10x pretax, we already get a 10% pretax return. And if we can do better than buying only average business (like Buffett), paying 10x pretax pretty much guarantees double digit pretax earning. Of course, the 10x here is only for businesses that are conservatively leveraged (say with interest coverage around 10x). The number needs to be adjusted for a highly leveraged business or a business with loads of cash.<blockquote><ul><li>税后收益并不反映业务基本面。由于税法变化和资本结构变化等与业务基本面无关的因素，税收可能会不时发生变化。此外，有很多方法可以降低公司的实际税收负担。</li></ul><ul><li>税前收益更容易以债券收益为基准。最好的股权投资是类似债券的，当我们谈论债券收益率时，该收益率是税前收益率。因此，10倍EBT将提供10%的税前收益率，与10%收益率的债券直接相当。</li></ul><h3>第二，为什么是10倍？</h3>除了是一个漂亮的整数之外，它还通过了/我的常识测试。根据税率的不同，10倍的税前市盈率大致相当于12至15倍的市盈率，这与股票估值的长期平均水平相差不远。此外，如果我们以10倍的税前价格购买普通企业，我们已经获得了10%的税前回报。如果我们能比只购买普通企业（比如巴菲特）做得更好，支付10倍的税前收入几乎可以保证两位数的税前收入。当然，这里的10倍仅适用于杠杆率保守的企业（例如利息覆盖率约为10倍）。对于高杠杆企业或拥有大量现金的企业，需要调整这个数字。</blockquote> <h3>Third, warning and summary</h3> Here a strong warning is in order. I am NOT suggesting you go out and start buying every/any stock that is below 10x EBT. As investors, we face many risks. Two of the major risks are A) quality risk or value trap, i.e., paying a bargain price for something of horrible quality, and B) valuation risk, i.e., paying too much for something of superb quality. The 10x pretax rule is mainly to avoid the type B risk AFTER the type A risk has been eliminated already.<blockquote><h3>三、警示与总结</h3>这里有一个强烈的警告。我并不是建议你出去开始购买每一只低于10倍EBT的股票。作为投资者，我们面临许多风险。两个主要风险是a)质量风险或价值陷阱，即为质量糟糕的东西支付便宜的价格，以及B)估值风险，即为质量一流的东西支付过高的价格。10倍税前规则主要是为了在A类风险已经消除后避免B类风险。</blockquote> So to summarize, to apply the 10x EBT rule,<blockquote>所以总结一下，应用10倍EBT规则，</blockquote> <ol> <li>the business should have not existential issue in the long run. However, at the end, this is largely a subjective judgement.</li> <li>the business should have no existential issue in the short run either. This is can be quite reliably and objectively evaluated based on the cash flow and debt coverage.</li> <li>If we paid 10x pretax and bought a business that meets requirement 1 and 2, we will be paying an average price for an average business. Not the best investment ever, but 10% pretax return is not that bad either. If we get a business that offers ANY growth, then we will be buying an above average business at an average price. And we will have a large chance of a double digit return compounding for a long time (if you hold onto to it long enough like Buffett).</li> </ol> AAPL in 2016 and 2017 obviously met all of the above requirements, and it is another textbook illustration of Buffett’s value driven investment success.<blockquote><ol><li>从长远来看，这项业务应该不会有生存问题。然而，归根结底，这在很大程度上是一种主观判断。</li><li>该企业在短期内也应该没有生存问题。这可以根据现金流和债务覆盖率非常可靠和客观地评估。</li><li>如果我们支付了10倍的税前费用，购买了一家满足要求1和2的企业，我们将为一家普通企业支付平均价格。不是有史以来最好的投资，但10%的税前回报也没那么糟糕。如果我们得到了一个能提供任何增长的企业，那么我们将以平均价格购买高于平均水平的企业。我们很有可能在很长一段时间内实现两位数的复合回报（如果你像巴菲特一样持有足够长的时间）。</li></ol>2016年和2017年的AAPL显然满足了上述所有要求，它是巴菲特价值驱动投资成功的又一教科书式例证。</blockquote> <h3>AAPL: why is he still holding it?</h3> The next question now is: why is he still holding whenits valuation is not long 10x EBT? As a matter of factor, it is at ~23x EBT now, more than double 10x EBT.<blockquote><h3>AAPL：为什么他还拿着它？</h3>现在的下一个问题是：当其估值不是10倍EBT时，他为什么还持有？作为一个因素，它现在的EBT约为23倍，是EBT 10倍的两倍多。</blockquote> I am not going to pretend that I know all his considerations. There are so many aspects that needs to be considered with a position of this size - tax liabilities, alternative investment candidates, opportunity cost, et al.<blockquote>我不会假装我知道他所有的考虑。这种规模的职位需要考虑很多方面——纳税义务、另类投资候选人、机会成本等等。</blockquote> But I am pretty certain about one thing – he is NOT holding AAPL as a technology stock, wishing for the next technology breakthrough and double the earning. He had made it so clear that he does not understand tech companies and will not invest in them. He must be holding AAPL for its perpetual autonomous growth – a business that can almost “automatically” grow without the need of too much reinvestment.<blockquote>但我非常确定一件事——他并不是将AAPL作为科技股持有，而是希望下一次技术突破并使收益翻倍。他已经明确表示，他不了解科技公司，也不会投资它们。他持有AAPL一定是为了其永久的自主增长——这项业务几乎可以“自动”增长，而不需要太多的再投资。</blockquote> He said multiple times that there are businesses which, at the end of the day, point to a bunch of depreciated properties and equipment and tell the investors, “these are our profits.” He hates his business.<blockquote>他多次表示，有些企业最终会指着一堆折旧的财产和设备告诉投资者，“这些是我们的利润。”他讨厌他的生意。</blockquote> As we will see from the next section, APPL is the exact opposite of those businesses. And due to its ultra-high ROCE and ultra-low requirement of reinvestment to fuel future growth, it will still offer double-digit return in the longer run even under its current expensive valuation.<blockquote>正如我们将在下一节中看到的，APPL与这些业务完全相反。由于其超高的ROCE和超低的再投资要求来推动未来增长，即使在目前昂贵的估值下，从长远来看，它仍将提供两位数的回报。</blockquote> <h3>Perpetual autonomous growth</h3> If you, like this author, are a long-term investor who subscribes to the concepts of owner's earning, perpetual growth rate, and equity bond, then the long-term return is simpler. It is \"simply\" the summation of the owner's earning yield (\"OEY\") and the perpetual growth rate (\"PGR\"), i.e.,<blockquote><h3>永久自主增长</h3>如果你和这位作者一样，是一个长期投资者，认购所有者收益、永久增长率和股权债券的概念，那么长期回报就更简单了。它“简单地”是所有者收益收益率（“OEY”）和永久增长率（“PGR”）的总和，即，</blockquote> Longer-Term ROI = OEY + PGR<blockquote>长期ROI=OEY+PGR</blockquote> Because in the long term, all fluctuations in valuation are averaged out (all luck at the end even out). And it doesn't really matter how the business uses the earnings (pay out as dividend, retained in the bank account, or repurchase stocks). As long as used sensibly (as AAPL has done in the past), it will be reflected as a return to the business owner.<blockquote>因为从长期来看，估值的所有波动都被平均掉了（最后所有的运气都被平均掉了）。企业如何使用收益（作为股息支付、保留在银行账户中或回购股票）并不重要。只要明智地使用（就像AAPL过去所做的那样），它就会体现为对企业主的回报。</blockquote> OEY is the owner's earnings divided by the entry price. All the complications are in the estimation of the owner's earnings - the real economic earnings of the business, not the nominal accounting earnings. Here as a crude and conservative estimate, I will just use the free cash flow (\"FCF\") as the owner's earnings. It is conservative in the sense that rigorously speaking, the owner's earnings should be free cash flow plus the portion of CAPEx that is used to fuel the growth (i.e., the growth CAPEx). At its current price levels, the OEY is ~3.6% for AAPL (~27.4x price to FCF).<blockquote>OEY是所有者的收入除以入场价格。所有的复杂性都在于对所有者收益的估计——企业的实际经济收益，而不是名义上的会计收益。在这里，作为一个粗略和保守的估计，我将使用自由现金流（“FCF”）作为所有者的收益。它是保守的，因为严格来说，所有者的收益应该是自由现金流加上用于推动增长的资本支出部分（即增长资本支出）。按照目前的价格水平，AAPL的OEY约为3.6%（价格与自由现金流之比约为27.4倍）。</blockquote> Again, the valuation is quite expensive and the OEY is merely 3.6%. But do not be under impressed yet, because there is a second part to the long term return, the part is the created by the PGR, perpetual growth rate. In the long term, the growth rate is:<blockquote>同样，估值相当昂贵，OEY仅为3.6%。但是不要被认为是不太好的，因为还有第二部分是长期回报，那部分是由PGR创造的，永久增长率。长期来看，增长率为：</blockquote> PGR = ROCE * Reinvestment Rate<blockquote>PGR=ROCE*再投资率</blockquote> ROCE stands for the return on capital employed. Note that ROCE is different from the return on equity (and more fundamental and important in my view). ROCE considers the return of capital ACTUALLY employed, and therefore provides insight into how much additional capital a business needs to invest in order to earn a given extra amount of income – a key to estimate the PGR. The reinvestment rate is the portion of income the business plows back to fuel further growth.<blockquote>ROCE代表已用资本回报率。请注意，ROCE不同于股本回报率（在我看来更基本、更重要）。ROCE考虑实际使用的资本回报，因此可以深入了解企业需要投资多少额外资本才能获得给定的额外收入——这是估计PGR的关键。再投资率是企业为推动进一步增长而收回的收入部分。</blockquote> So to estimate the PGR, we need to estimate two things: ROCE and reinvestment rate.<blockquote>因此，要估计PGR，我们需要估计两件事：ROCE和再投资率。</blockquote> To estimate the ROCE of businesses like AAPL, I consider the following items capital actually employed:<blockquote>为了估计像AAPL这样的企业的ROCE，我考虑了实际使用的资本项目：</blockquote> 1. Working capital, including payables, receivables, inventory. These are the capitals required for the daily operation of their businesses.<blockquote>1、营运资金，包括应付账款、应收账款、存货。这些是其业务日常运营所需的资本。</blockquote> 2. Gross Property, Plant, and Equipment. These are the capitals required to actually conduct business and manufacture their products.<blockquote>2.不动产、厂房和设备总额。这些是实际开展业务和制造产品所需的资本。</blockquote> 3. Research and development expenses (an essential expense for a business like AAPL).<blockquote>3.研发费用（对于AAPL这样的企业来说，这是一项必不可少的费用）。</blockquote> Based on the above considerations, the ROCE of AAPL over the past decade are shown below. As seen, it was able to maintain a respectably high ROCE over the past decade: it used to be 450% early in the decade and still hovers around an average of 150% in recent years since 2016. To put things in perspective, as detailed in myprevious articleforVisa Inc., another autonomous grower that Buffett likes, Visa features a ROCE “only” around 105%.<blockquote>基于上述考虑，AAPL过去十年的ROCE如下所示。正如所见，它在过去十年中能够保持相当高的ROCE：本世纪初为450%，自2016年以来近年来仍徘徊在平均150%左右。客观地看，正如我在上一篇关于巴菲特喜欢的另一家自主种植者Visa Inc.的文章中详细介绍的那样，Visa的ROCE“仅”约为105%。</blockquote> <img src=\"https://static.tigerbbs.com/d21191b41d6360f09d6f6496fac499a4\" tg-width=\"640\" tg-height=\"358\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source: author and Seeking Alpha.<blockquote>资料来源：作者和Seeking Alpha。</blockquote> Now let’s see the reinvestment part. In recent years, the following is how AAPL has been allocating its operation cash (“OPC”). As seen, AAPL has been using on average ~33% of the OPC as maintenance CAPEx and dividend. So these two “mandatory” have been on average costing only 1/3 of AAPL’s operation cash in recent years. The quotation mark means even though dividend is usually considered an optional cost. But for a stock with AAPL’s status, management probably won’t cut it unless they really have to.<blockquote>现在让我们看看再投资部分。近年来，苹果公司如何分配其运营现金（“OPC”）如下。如图所示，AAPL平均使用约33%的OPC作为维护资本支出和股息。因此，这两项“强制性”近年来平均只花费了AAPL运营现金的1/3。引号意味着即使股息通常被视为可选成本。但对于苹果公司这种地位的股票，管理层可能不会削减它，除非真的迫不得已。</blockquote> For the remaining 2/3, the company does have a choice. It can use it for a variety of things: reinvest to fuel further growth, retain it to strength the balance sheet, pay an extra special dividend, pay down debt, buyback shares, et al. It obviously makes total sense to reinvest all of it to fuel further growth given its 150% ROCE. At this ROCE, $1 reinvested would be fuel $1.5 of additional earning! But the problem is that for businesses at this scale, there are just not that many opportunities to reinvest the earnings. As a result, AAPL has been allocating a part of the remaining earning, on average 70% in recently years, to buy back shares. Such repurchases, besides reflecting the confidence of the management on their own business, again also signals the lack of good reinvestment opportunities.<blockquote>对于剩下的2/3，公司确实有选择。它可以将其用于多种用途：再投资以推动进一步增长、保留其以加强资产负债表、支付额外的特别股息、偿还债务、回购股票等。鉴于其150%的ROCE，将所有资金进行再投资以推动进一步增长显然是完全有意义的。在这个ROCE，1美元的再投资将带来1.5美元的额外收入！但问题是，对于这种规模的企业来说，将收益进行再投资的机会并不多。因此，AAPL一直在分配剩余收益的一部分（近年来平均为70%）来回购股票。这种回购除了反映管理层对自身业务的信心外，也再次表明缺乏良好的再投资机会。</blockquote> But all things considered, with such spectacular ROCE, AAPL does not need that much reinvestment to grow, as elaborated below.<blockquote>但综合考虑，凭借如此惊人的ROCE，AAPL不需要那么多再投资来实现增长，如下所述。</blockquote> <img src=\"https://static.tigerbbs.com/190eeaa73f40d26feb7de2b4932718a8\" tg-width=\"640\" tg-height=\"343\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source: author and Seeking Alpha.<blockquote>资料来源：作者和Seeking Alpha。</blockquote> With a 150% ROCE, it means that even if AAPL only reinvests 5% of its earning to expand the capital employed, it could maintain a 7.5% PGR (PGR = ROCE * fraction of earning reinvested = 150% * 5% = 7.5%). As aforementioned, this is a reason that AAPL can afford to use pretty much all the OPC for dividend and share repurchase after covering its maintenance CAPEx.<blockquote>ROCE为150%，这意味着即使AAPL只将其收益的5%进行再投资来扩大所用资本，它也可以保持7.5%的PGR（PGR=ROCE*再投资收益的比例=150%*5%=7.5%）。如前所述，这就是AAPL在支付维护资本支出后有能力将几乎所有OPC用于股息和股票回购的原因。</blockquote> Now we have both pieces of the puzzle in place to estimate the long-term return. At its current price levels, the OEY is estimated to be ~3.6%, and the PGR is about 7.5%. So the total return in the long term at current valuation would be a double digit 11% as shown in the chart below. Also as seen, even when ROCE fluctuates somewhat, the fluctuations wouldn’t change the long-term return dramatically.<blockquote>现在，我们已经有了估计长期回报的两块拼图。按照目前的价格水平，OEY估计约为3.6%，PGR约为7.5%。因此，按当前估值计算，长期总回报率将达到两位数11%，如下图所示。同样可以看出，即使ROCE有所波动，波动也不会显着改变长期回报。</blockquote> <img src=\"https://static.tigerbbs.com/93688ad65495c50b51be46b2fcda963c\" tg-width=\"640\" tg-height=\"422\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source: author.<blockquote>来源：作者。</blockquote> <h3>Conclusion and final thought</h3> Many of Buffett's largest and best deals are purchased below or around 10x EBT, ranging from Coca-Cola, American Express, Wells Fargo, Walmart, Burlington Northern, and also the more recent AAPL purchase and his $25B&nbsp;repurchases of BRK.A&nbsp;shares.<blockquote><h3>结论和最后的思考</h3>巴菲特的许多最大和最好的交易都是以低于或大约10倍EBT的价格购买的，包括可口可乐、美国运通、富国银行、沃尔玛、Burlington Northern，以及最近购买的AAPL和他以25B美元回购的BRK.A股。</blockquote> This article analyzes AppleInc.under the context as the largest purchase and also largest holding in the Buffett portfolio. This analysis approaches the purchase under a framework that I call the Buffett’s 10x Pretax Rule. The analysis showed that When Buffett purchased AAPL in 2016 and 2017, it met all the requirements for the 10x pretax rule and represented another textbook illustration of his value driven success.<blockquote>本文将AppleInc.作为巴菲特投资组合中最大的收购和最大的持股进行分析。这一分析是在我看涨期权巴菲特10倍税前规则的框架下进行的。分析显示，当巴菲特在2016年和2017年收购AAPL时，它满足了10倍税前规则的所有要求，并代表了他价值驱动型成功的又一教科书式例证。</blockquote> Then this article also attempted to answer why he is holding it given the current relatively expensive valuation. He is definitely NOT holding AAPL as a technology stock, wishing for the next technology breakthrough to double the earning. He must be holding AAPL for its perpetual autonomous growth – a business that can almost “automatically” grow without the need of too much reinvestment. From this perspective, the result show that these shares still can offer double-digit return even under its current expensive valuation.<blockquote>那么这篇文章也试图回答在目前估值相对昂贵的情况下，他为什么要持有它。他绝对不是把苹果公司作为科技股来持有，希望下一次技术突破能让收益翻倍。他持有苹果公司一定是为了其永久的自主增长——这项业务几乎可以“自动”增长，而不需要太多的再投资。从这个角度来看，结果表明，即使在目前昂贵的估值下，这些股票仍然可以提供两位数的回报。</blockquote> And as a final note before ending this section, this might be the most valuable insight that I’ve learned by studying Warren Buffett’s investment philosophy. The insight really is that I do not need a business with double-digit growth to generate double-digit returns. A reliable business that can offer a stable growth at a boring rate of a few percent (like ~5%) can already provide double-digit returns with good certainty as long as A) they are purchased at a reasonable valuation, and B) they have ROCE sufficiently high so that the growth can be driven by reinvesting a small fraction of the income. In the long run, assuming a growth rate more than 5% percent probably is a dangerous assumption to start with anyway.<blockquote>作为结束本节之前的最后一点，这可能是我通过研究沃伦·巴菲特的投资哲学学到的最有价值的见解。真正的洞察力是，我不需要一个两位数增长的企业来产生两位数的回报。一家可靠的企业能够以百分之几（如约5%）的令人厌烦的速度提供稳定增长，只要a)以合理的估值购买，并且B)他们的ROCE足够高，以便可以通过将一小部分收入进行再投资来推动增长。从长远来看，假设增长率超过5%可能是一个危险的假设。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Apple Inc. And Buffett: Why He Bought And Why He Holds<blockquote>苹果和巴菲特：巴菲特为何买入和持有</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nApple Inc. And Buffett: Why He Bought And Why He Holds<blockquote>苹果和巴菲特：巴菲特为何买入和持有</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nSeeking Alpha2021-08-11 08:34\n\n</h4>\n</header>\n<article>\nSummary<blockquote>总结</blockquote> <ul> <li>This article analyzes <a href=\"https://laohu8.com/S/AAPL\">Apple</a> under the context of it being the largest holding in the Buffett portfolio.</li> <li>This analysis approaches the purchase under a framework that I call the Buffett’s 10x Pretax Rule.</li> <li>And this analysis argues that Buffett holds the AAPL shares in the long term for its perpetual growth prospects, offering double-digit return even under its current expensive valuation.</li> </ul> <img src=\"https://static.tigerbbs.com/24b65798f03c6f9376257bba2741e588\" tg-width=\"768\" tg-height=\"531\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\">Justin Sullivan/Getty Images News<blockquote><ul><li>本文分析了<a href=\"https://laohu8.com/S/AAPL\">苹果</a>在它是巴菲特投资组合中最大持股的背景下。</li><li>这一分析是在我看涨期权巴菲特10倍税前规则的框架下进行的。</li><li>这一分析认为，巴菲特长期持有苹果公司股票是因为其永久增长前景，即使在目前昂贵的估值下，也能提供两位数的回报。</li></ul>贾斯汀·沙利文/盖蒂图片社新闻</blockquote> <h3>The investment thesis</h3> If you are reading this, chances are that you already know that AppleInc. (AAPL) is the largest position in Warren Buffett's Berkshire Hathaway portfolio. When many people wonder if the legend has lost his magic touch, and commented on his blunders with the airline stocks, they forgot that he made more than $100B from AAPL stocks alone! With his concentrated investment style, what he lost on the relatively minor bets such as the airlines is only a footnote.<blockquote><h3>投资论文</h3>如果你正在读这篇文章，很可能你已经知道苹果公司。（AAPL）是沃伦·巴菲特伯克希尔·哈撒韦投资组合中最大的头寸。当许多人怀疑这位传奇人物是否失去了他的魔力，并评论他在航空股上的失误时，他们忘记了他仅从AAPL股票上就赚了超过1000亿美元！以他集中的投资风格，他在航空公司等相对较小的赌注上输掉的只是一个注脚。</blockquote> This article analyzes AAPL under the context of it being the largest holding in the Buffett portfolio. This analysis first approaches his entry decision under a framework that I call the Buffett’s 10x Pretax Rule. And then this analysis argues that Buffett holds the AAPL shares in the long term NOT as a technology stock – he had made it clear enough that he does not understand tech companies and will not invest in them. He must be holding AAPL for its perpetual growth prospects. From this perspective, we will see that APPL will still offer double-digit return in the longer run even under its current expensive valuation.<blockquote>本文在AAPL是巴菲特投资组合中最大持股的背景下进行分析。本分析首先在我看涨期权巴菲特10倍税前规则的框架下探讨了巴菲特的进入决策。然后，这一分析认为，巴菲特长期持有苹果公司股票，而不是将其视为科技股——他已经明确表示，他不了解科技公司，也不会投资它们。他持有苹果公司一定是因为它的永久增长前景。从这个角度来看，我们将看到，即使在目前昂贵的估值下，APPL从长远来看仍将提供两位数的回报。</blockquote> <img src=\"https://static.tigerbbs.com/348a1fb56faeceb8e956ad8f6fa3b09a\" tg-width=\"640\" tg-height=\"645\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source:&nbsp;DataRoma<blockquote>资料来源：DataRoma</blockquote> <h3>Buffett’s 10x Pretax Rule</h3> If you’re a devout Buffett cultist like this author, you must have noticed or heard that the grand master paid ~10x pretax earnings for many of his largest and best deals. The list is a really long one, ranging from Coca-Cola, American Express, Wells Fargo, Walmart, Burlington Northern, and of course the more recent AAPL purchase and his recent $25B&nbsp;repurchases of BRK.A&nbsp;shares as analyzed in my earlier article.<blockquote><h3>巴菲特的10倍税前规则</h3>如果您像这位作者一样是虔诚的巴菲特崇拜者，您一定注意到或听说过这位大师为他的许多最大和最好的交易支付了约10倍的税前收益。这个名单真的很长，包括可口可乐、美国运通、富国银行、沃尔玛、Burlington Northern，当然还有最近对AAPL的收购和他最近对BRK的25B美元回购。A股，正如我之前文章中所分析的那样。</blockquote> The following chart shows the price history of AAPL and its 10x pretax earning since 2010. Pretax earnings are also referred to as \"EBT\", Earning Before Taxes, in this article. As seen, Buffett made his purchases during 2016-2017 when the price is below or near 10x EBT. I was lucky enough to have made the AAPL purchases at that time myself too.<blockquote>下图显示了AAPL的价格历史及其自2010年以来10倍的税前收益。在本文中，税前收益也称为“EBT”，即税前收益。如图所示，巴菲特在2016年至2017年期间进行了购买，当时价格低于或接近EBT的10倍。我很幸运，当时我自己也购买了AAPL。</blockquote> Buffet himself also mentioned and discussed the 10x pretax multiple times in his shareholder meetings and Q&amp;A sessions. An example quote is provided below (highlighting was added by me):<blockquote>巴菲特本人也在股东大会和问答环节中多次提及和讨论了10倍税前。下面提供了一个示例报价（突出显示是我添加的）：</blockquote> Buffett: “Geico would be valued differently than Gen RE and other insurance businesses because it’s rational to assume a large underwriting profit and significant growth. You cannot say that about many insurance businesses. I would love to buy a new bunch of operating businesses with similar competitive positions to the ones we own now at nine to ten times pretax earnings.”<blockquote>巴菲特：“Geico的估值将与Gen RE和其他保险业务不同，因为假设承保利润大且增长显着是合理的。你不能对许多保险业务这么说。我很乐意购买一批新的运营业务，这些业务的竞争地位与我们现在拥有的业务相似，其税前收益为9到10倍。”</blockquote> <img src=\"https://static.tigerbbs.com/9eec812a3eda60f950a1890eebc7dd34\" tg-width=\"640\" tg-height=\"359\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source: author based on Seeking Alpha data<blockquote>资料来源：作者基于Seeking Alpha数据</blockquote> So are there any reasons fundamental to this 10x pretax rule, or is it only a bunch of pure coincidences? I think it is the former and there are indeed many good reasons for this rule, as listed below.<blockquote>那么，这个10倍税前规则有什么根本原因吗，还是只是一堆纯粹的巧合？我认为是前者，这个规则确实有很多很好的理由，如下所列。</blockquote> <h3>First, Why pretax?</h3> Out of all the earning metrics, EPS, operation income, free cash, dividend, etc., why do we favor the pretax earning? I think there are at least two good reasons.<blockquote><h3>首先，为什么要税前？</h3>在所有盈利指标中，每股收益、营业收入、自由现金、股息等，为什么我们青睐税前收益？我认为至少有两个很好的理由。</blockquote> <ul> <li>After tax earnings do not reflect business fundamentals. Taxes can change from time to time due to factors that have no relevance to business fundamentals, such as tax law changes and capital structure change. Plus there are plenty of ways to lower the actual tax burden of a company.</li> </ul> <ul> <li>Pretax earnings are easier to benchmark, say against bond earnings. The best equity investments are bond like, and when we speak of bond yield, that yield is pretax. So a 10x EBT would provide a 10% pretax earning yield, directly comparable to a 10% yield bond.</li> </ul> <h3>Second, why 10x?</h3> Besides being a nice and round number, it passes the/my common sense test. A 10x pretax multiple roughly translate into 12 to 15x PE depending on the tax rates, which is not far off from the long term average of stock valuation. Furthermore, if we buy average business at 10x pretax, we already get a 10% pretax return. And if we can do better than buying only average business (like Buffett), paying 10x pretax pretty much guarantees double digit pretax earning. Of course, the 10x here is only for businesses that are conservatively leveraged (say with interest coverage around 10x). The number needs to be adjusted for a highly leveraged business or a business with loads of cash.<blockquote><ul><li>税后收益并不反映业务基本面。由于税法变化和资本结构变化等与业务基本面无关的因素，税收可能会不时发生变化。此外，有很多方法可以降低公司的实际税收负担。</li></ul><ul><li>税前收益更容易以债券收益为基准。最好的股权投资是类似债券的，当我们谈论债券收益率时，该收益率是税前收益率。因此，10倍EBT将提供10%的税前收益率，与10%收益率的债券直接相当。</li></ul><h3>第二，为什么是10倍？</h3>除了是一个漂亮的整数之外，它还通过了/我的常识测试。根据税率的不同，10倍的税前市盈率大致相当于12至15倍的市盈率，这与股票估值的长期平均水平相差不远。此外，如果我们以10倍的税前价格购买普通企业，我们已经获得了10%的税前回报。如果我们能比只购买普通企业（比如巴菲特）做得更好，支付10倍的税前收入几乎可以保证两位数的税前收入。当然，这里的10倍仅适用于杠杆率保守的企业（例如利息覆盖率约为10倍）。对于高杠杆企业或拥有大量现金的企业，需要调整这个数字。</blockquote> <h3>Third, warning and summary</h3> Here a strong warning is in order. I am NOT suggesting you go out and start buying every/any stock that is below 10x EBT. As investors, we face many risks. Two of the major risks are A) quality risk or value trap, i.e., paying a bargain price for something of horrible quality, and B) valuation risk, i.e., paying too much for something of superb quality. The 10x pretax rule is mainly to avoid the type B risk AFTER the type A risk has been eliminated already.<blockquote><h3>三、警示与总结</h3>这里有一个强烈的警告。我并不是建议你出去开始购买每一只低于10倍EBT的股票。作为投资者，我们面临许多风险。两个主要风险是a)质量风险或价值陷阱，即为质量糟糕的东西支付便宜的价格，以及B)估值风险，即为质量一流的东西支付过高的价格。10倍税前规则主要是为了在A类风险已经消除后避免B类风险。</blockquote> So to summarize, to apply the 10x EBT rule,<blockquote>所以总结一下，应用10倍EBT规则，</blockquote> <ol> <li>the business should have not existential issue in the long run. However, at the end, this is largely a subjective judgement.</li> <li>the business should have no existential issue in the short run either. This is can be quite reliably and objectively evaluated based on the cash flow and debt coverage.</li> <li>If we paid 10x pretax and bought a business that meets requirement 1 and 2, we will be paying an average price for an average business. Not the best investment ever, but 10% pretax return is not that bad either. If we get a business that offers ANY growth, then we will be buying an above average business at an average price. And we will have a large chance of a double digit return compounding for a long time (if you hold onto to it long enough like Buffett).</li> </ol> AAPL in 2016 and 2017 obviously met all of the above requirements, and it is another textbook illustration of Buffett’s value driven investment success.<blockquote><ol><li>从长远来看，这项业务应该不会有生存问题。然而，归根结底，这在很大程度上是一种主观判断。</li><li>该企业在短期内也应该没有生存问题。这可以根据现金流和债务覆盖率非常可靠和客观地评估。</li><li>如果我们支付了10倍的税前费用，购买了一家满足要求1和2的企业，我们将为一家普通企业支付平均价格。不是有史以来最好的投资，但10%的税前回报也没那么糟糕。如果我们得到了一个能提供任何增长的企业，那么我们将以平均价格购买高于平均水平的企业。我们很有可能在很长一段时间内实现两位数的复合回报（如果你像巴菲特一样持有足够长的时间）。</li></ol>2016年和2017年的AAPL显然满足了上述所有要求，它是巴菲特价值驱动投资成功的又一教科书式例证。</blockquote> <h3>AAPL: why is he still holding it?</h3> The next question now is: why is he still holding whenits valuation is not long 10x EBT? As a matter of factor, it is at ~23x EBT now, more than double 10x EBT.<blockquote><h3>AAPL：为什么他还拿着它？</h3>现在的下一个问题是：当其估值不是10倍EBT时，他为什么还持有？作为一个因素，它现在的EBT约为23倍，是EBT 10倍的两倍多。</blockquote> I am not going to pretend that I know all his considerations. There are so many aspects that needs to be considered with a position of this size - tax liabilities, alternative investment candidates, opportunity cost, et al.<blockquote>我不会假装我知道他所有的考虑。这种规模的职位需要考虑很多方面——纳税义务、另类投资候选人、机会成本等等。</blockquote> But I am pretty certain about one thing – he is NOT holding AAPL as a technology stock, wishing for the next technology breakthrough and double the earning. He had made it so clear that he does not understand tech companies and will not invest in them. He must be holding AAPL for its perpetual autonomous growth – a business that can almost “automatically” grow without the need of too much reinvestment.<blockquote>但我非常确定一件事——他并不是将AAPL作为科技股持有，而是希望下一次技术突破并使收益翻倍。他已经明确表示，他不了解科技公司，也不会投资它们。他持有AAPL一定是为了其永久的自主增长——这项业务几乎可以“自动”增长，而不需要太多的再投资。</blockquote> He said multiple times that there are businesses which, at the end of the day, point to a bunch of depreciated properties and equipment and tell the investors, “these are our profits.” He hates his business.<blockquote>他多次表示，有些企业最终会指着一堆折旧的财产和设备告诉投资者，“这些是我们的利润。”他讨厌他的生意。</blockquote> As we will see from the next section, APPL is the exact opposite of those businesses. And due to its ultra-high ROCE and ultra-low requirement of reinvestment to fuel future growth, it will still offer double-digit return in the longer run even under its current expensive valuation.<blockquote>正如我们将在下一节中看到的，APPL与这些业务完全相反。由于其超高的ROCE和超低的再投资要求来推动未来增长，即使在目前昂贵的估值下，从长远来看，它仍将提供两位数的回报。</blockquote> <h3>Perpetual autonomous growth</h3> If you, like this author, are a long-term investor who subscribes to the concepts of owner's earning, perpetual growth rate, and equity bond, then the long-term return is simpler. It is \"simply\" the summation of the owner's earning yield (\"OEY\") and the perpetual growth rate (\"PGR\"), i.e.,<blockquote><h3>永久自主增长</h3>如果你和这位作者一样，是一个长期投资者，认购所有者收益、永久增长率和股权债券的概念，那么长期回报就更简单了。它“简单地”是所有者收益收益率（“OEY”）和永久增长率（“PGR”）的总和，即，</blockquote> Longer-Term ROI = OEY + PGR<blockquote>长期ROI=OEY+PGR</blockquote> Because in the long term, all fluctuations in valuation are averaged out (all luck at the end even out). And it doesn't really matter how the business uses the earnings (pay out as dividend, retained in the bank account, or repurchase stocks). As long as used sensibly (as AAPL has done in the past), it will be reflected as a return to the business owner.<blockquote>因为从长期来看，估值的所有波动都被平均掉了（最后所有的运气都被平均掉了）。企业如何使用收益（作为股息支付、保留在银行账户中或回购股票）并不重要。只要明智地使用（就像AAPL过去所做的那样），它就会体现为对企业主的回报。</blockquote> OEY is the owner's earnings divided by the entry price. All the complications are in the estimation of the owner's earnings - the real economic earnings of the business, not the nominal accounting earnings. Here as a crude and conservative estimate, I will just use the free cash flow (\"FCF\") as the owner's earnings. It is conservative in the sense that rigorously speaking, the owner's earnings should be free cash flow plus the portion of CAPEx that is used to fuel the growth (i.e., the growth CAPEx). At its current price levels, the OEY is ~3.6% for AAPL (~27.4x price to FCF).<blockquote>OEY是所有者的收入除以入场价格。所有的复杂性都在于对所有者收益的估计——企业的实际经济收益，而不是名义上的会计收益。在这里，作为一个粗略和保守的估计，我将使用自由现金流（“FCF”）作为所有者的收益。它是保守的，因为严格来说，所有者的收益应该是自由现金流加上用于推动增长的资本支出部分（即增长资本支出）。按照目前的价格水平，AAPL的OEY约为3.6%（价格与自由现金流之比约为27.4倍）。</blockquote> Again, the valuation is quite expensive and the OEY is merely 3.6%. But do not be under impressed yet, because there is a second part to the long term return, the part is the created by the PGR, perpetual growth rate. In the long term, the growth rate is:<blockquote>同样，估值相当昂贵，OEY仅为3.6%。但是不要被认为是不太好的，因为还有第二部分是长期回报，那部分是由PGR创造的，永久增长率。长期来看，增长率为：</blockquote> PGR = ROCE * Reinvestment Rate<blockquote>PGR=ROCE*再投资率</blockquote> ROCE stands for the return on capital employed. Note that ROCE is different from the return on equity (and more fundamental and important in my view). ROCE considers the return of capital ACTUALLY employed, and therefore provides insight into how much additional capital a business needs to invest in order to earn a given extra amount of income – a key to estimate the PGR. The reinvestment rate is the portion of income the business plows back to fuel further growth.<blockquote>ROCE代表已用资本回报率。请注意，ROCE不同于股本回报率（在我看来更基本、更重要）。ROCE考虑实际使用的资本回报，因此可以深入了解企业需要投资多少额外资本才能获得给定的额外收入——这是估计PGR的关键。再投资率是企业为推动进一步增长而收回的收入部分。</blockquote> So to estimate the PGR, we need to estimate two things: ROCE and reinvestment rate.<blockquote>因此，要估计PGR，我们需要估计两件事：ROCE和再投资率。</blockquote> To estimate the ROCE of businesses like AAPL, I consider the following items capital actually employed:<blockquote>为了估计像AAPL这样的企业的ROCE，我考虑了实际使用的资本项目：</blockquote> 1. Working capital, including payables, receivables, inventory. These are the capitals required for the daily operation of their businesses.<blockquote>1、营运资金，包括应付账款、应收账款、存货。这些是其业务日常运营所需的资本。</blockquote> 2. Gross Property, Plant, and Equipment. These are the capitals required to actually conduct business and manufacture their products.<blockquote>2.不动产、厂房和设备总额。这些是实际开展业务和制造产品所需的资本。</blockquote> 3. Research and development expenses (an essential expense for a business like AAPL).<blockquote>3.研发费用（对于AAPL这样的企业来说，这是一项必不可少的费用）。</blockquote> Based on the above considerations, the ROCE of AAPL over the past decade are shown below. As seen, it was able to maintain a respectably high ROCE over the past decade: it used to be 450% early in the decade and still hovers around an average of 150% in recent years since 2016. To put things in perspective, as detailed in myprevious articleforVisa Inc., another autonomous grower that Buffett likes, Visa features a ROCE “only” around 105%.<blockquote>基于上述考虑，AAPL过去十年的ROCE如下所示。正如所见，它在过去十年中能够保持相当高的ROCE：本世纪初为450%，自2016年以来近年来仍徘徊在平均150%左右。客观地看，正如我在上一篇关于巴菲特喜欢的另一家自主种植者Visa Inc.的文章中详细介绍的那样，Visa的ROCE“仅”约为105%。</blockquote> <img src=\"https://static.tigerbbs.com/d21191b41d6360f09d6f6496fac499a4\" tg-width=\"640\" tg-height=\"358\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source: author and Seeking Alpha.<blockquote>资料来源：作者和Seeking Alpha。</blockquote> Now let’s see the reinvestment part. In recent years, the following is how AAPL has been allocating its operation cash (“OPC”). As seen, AAPL has been using on average ~33% of the OPC as maintenance CAPEx and dividend. So these two “mandatory” have been on average costing only 1/3 of AAPL’s operation cash in recent years. The quotation mark means even though dividend is usually considered an optional cost. But for a stock with AAPL’s status, management probably won’t cut it unless they really have to.<blockquote>现在让我们看看再投资部分。近年来，苹果公司如何分配其运营现金（“OPC”）如下。如图所示，AAPL平均使用约33%的OPC作为维护资本支出和股息。因此，这两项“强制性”近年来平均只花费了AAPL运营现金的1/3。引号意味着即使股息通常被视为可选成本。但对于苹果公司这种地位的股票，管理层可能不会削减它，除非真的迫不得已。</blockquote> For the remaining 2/3, the company does have a choice. It can use it for a variety of things: reinvest to fuel further growth, retain it to strength the balance sheet, pay an extra special dividend, pay down debt, buyback shares, et al. It obviously makes total sense to reinvest all of it to fuel further growth given its 150% ROCE. At this ROCE, $1 reinvested would be fuel $1.5 of additional earning! But the problem is that for businesses at this scale, there are just not that many opportunities to reinvest the earnings. As a result, AAPL has been allocating a part of the remaining earning, on average 70% in recently years, to buy back shares. Such repurchases, besides reflecting the confidence of the management on their own business, again also signals the lack of good reinvestment opportunities.<blockquote>对于剩下的2/3，公司确实有选择。它可以将其用于多种用途：再投资以推动进一步增长、保留其以加强资产负债表、支付额外的特别股息、偿还债务、回购股票等。鉴于其150%的ROCE，将所有资金进行再投资以推动进一步增长显然是完全有意义的。在这个ROCE，1美元的再投资将带来1.5美元的额外收入！但问题是，对于这种规模的企业来说，将收益进行再投资的机会并不多。因此，AAPL一直在分配剩余收益的一部分（近年来平均为70%）来回购股票。这种回购除了反映管理层对自身业务的信心外，也再次表明缺乏良好的再投资机会。</blockquote> But all things considered, with such spectacular ROCE, AAPL does not need that much reinvestment to grow, as elaborated below.<blockquote>但综合考虑，凭借如此惊人的ROCE，AAPL不需要那么多再投资来实现增长，如下所述。</blockquote> <img src=\"https://static.tigerbbs.com/190eeaa73f40d26feb7de2b4932718a8\" tg-width=\"640\" tg-height=\"343\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source: author and Seeking Alpha.<blockquote>资料来源：作者和Seeking Alpha。</blockquote> With a 150% ROCE, it means that even if AAPL only reinvests 5% of its earning to expand the capital employed, it could maintain a 7.5% PGR (PGR = ROCE * fraction of earning reinvested = 150% * 5% = 7.5%). As aforementioned, this is a reason that AAPL can afford to use pretty much all the OPC for dividend and share repurchase after covering its maintenance CAPEx.<blockquote>ROCE为150%，这意味着即使AAPL只将其收益的5%进行再投资来扩大所用资本，它也可以保持7.5%的PGR（PGR=ROCE*再投资收益的比例=150%*5%=7.5%）。如前所述，这就是AAPL在支付维护资本支出后有能力将几乎所有OPC用于股息和股票回购的原因。</blockquote> Now we have both pieces of the puzzle in place to estimate the long-term return. At its current price levels, the OEY is estimated to be ~3.6%, and the PGR is about 7.5%. So the total return in the long term at current valuation would be a double digit 11% as shown in the chart below. Also as seen, even when ROCE fluctuates somewhat, the fluctuations wouldn’t change the long-term return dramatically.<blockquote>现在，我们已经有了估计长期回报的两块拼图。按照目前的价格水平，OEY估计约为3.6%，PGR约为7.5%。因此，按当前估值计算，长期总回报率将达到两位数11%，如下图所示。同样可以看出，即使ROCE有所波动，波动也不会显着改变长期回报。</blockquote> <img src=\"https://static.tigerbbs.com/93688ad65495c50b51be46b2fcda963c\" tg-width=\"640\" tg-height=\"422\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Source: author.<blockquote>来源：作者。</blockquote> <h3>Conclusion and final thought</h3> Many of Buffett's largest and best deals are purchased below or around 10x EBT, ranging from Coca-Cola, American Express, Wells Fargo, Walmart, Burlington Northern, and also the more recent AAPL purchase and his $25B&nbsp;repurchases of BRK.A&nbsp;shares.<blockquote><h3>结论和最后的思考</h3>巴菲特的许多最大和最好的交易都是以低于或大约10倍EBT的价格购买的，包括可口可乐、美国运通、富国银行、沃尔玛、Burlington Northern，以及最近购买的AAPL和他以25B美元回购的BRK.A股。</blockquote> This article analyzes AppleInc.under the context as the largest purchase and also largest holding in the Buffett portfolio. This analysis approaches the purchase under a framework that I call the Buffett’s 10x Pretax Rule. The analysis showed that When Buffett purchased AAPL in 2016 and 2017, it met all the requirements for the 10x pretax rule and represented another textbook illustration of his value driven success.<blockquote>本文将AppleInc.作为巴菲特投资组合中最大的收购和最大的持股进行分析。这一分析是在我看涨期权巴菲特10倍税前规则的框架下进行的。分析显示，当巴菲特在2016年和2017年收购AAPL时，它满足了10倍税前规则的所有要求，并代表了他价值驱动型成功的又一教科书式例证。</blockquote> Then this article also attempted to answer why he is holding it given the current relatively expensive valuation. He is definitely NOT holding AAPL as a technology stock, wishing for the next technology breakthrough to double the earning. He must be holding AAPL for its perpetual autonomous growth – a business that can almost “automatically” grow without the need of too much reinvestment. From this perspective, the result show that these shares still can offer double-digit return even under its current expensive valuation.<blockquote>那么这篇文章也试图回答在目前估值相对昂贵的情况下，他为什么要持有它。他绝对不是把苹果公司作为科技股来持有，希望下一次技术突破能让收益翻倍。他持有苹果公司一定是为了其永久的自主增长——这项业务几乎可以“自动”增长，而不需要太多的再投资。从这个角度来看，结果表明，即使在目前昂贵的估值下，这些股票仍然可以提供两位数的回报。</blockquote> And as a final note before ending this section, this might be the most valuable insight that I’ve learned by studying Warren Buffett’s investment philosophy. The insight really is that I do not need a business with double-digit growth to generate double-digit returns. A reliable business that can offer a stable growth at a boring rate of a few percent (like ~5%) can already provide double-digit returns with good certainty as long as A) they are purchased at a reasonable valuation, and B) they have ROCE sufficiently high so that the growth can be driven by reinvesting a small fraction of the income. In the long run, assuming a growth rate more than 5% percent probably is a dangerous assumption to start with anyway.<blockquote>作为结束本节之前的最后一点，这可能是我通过研究沃伦·巴菲特的投资哲学学到的最有价值的见解。真正的洞察力是，我不需要一个两位数增长的企业来产生两位数的回报。一家可靠的企业能够以百分之几（如约5%）的令人厌烦的速度提供稳定增长，只要a)以合理的估值购买，并且B)他们的ROCE足够高，以便可以通过将一小部分收入进行再投资来推动增长。从长远来看，假设增长率超过5%可能是一个危险的假设。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://seekingalpha.com/article/4447893-apple-and-buffett-why-he-bought\">Seeking Alpha</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AAPL":"苹果"},"source_url":"https://seekingalpha.com/article/4447893-apple-and-buffett-why-he-bought","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1138697562","content_text":"Summary\n\nThis article analyzes Apple under the context of it being the largest holding in the Buffett portfolio.\nThis analysis approaches the purchase under a framework that I call the Buffett’s 10x Pretax Rule.\nAnd this analysis argues that Buffett holds the AAPL shares in the long term for its perpetual growth prospects, offering double-digit return even under its current expensive valuation.\n\nJustin Sullivan/Getty Images News\nThe investment thesis\nIf you are reading this, chances are that you already know that AppleInc. (AAPL) is the largest position in Warren Buffett's Berkshire Hathaway portfolio. When many people wonder if the legend has lost his magic touch, and commented on his blunders with the airline stocks, they forgot that he made more than $100B from AAPL stocks alone! With his concentrated investment style, what he lost on the relatively minor bets such as the airlines is only a footnote.\nThis article analyzes AAPL under the context of it being the largest holding in the Buffett portfolio. This analysis first approaches his entry decision under a framework that I call the Buffett’s 10x Pretax Rule. And then this analysis argues that Buffett holds the AAPL shares in the long term NOT as a technology stock – he had made it clear enough that he does not understand tech companies and will not invest in them. He must be holding AAPL for its perpetual growth prospects. From this perspective, we will see that APPL will still offer double-digit return in the longer run even under its current expensive valuation.\n\nSource: DataRoma\nBuffett’s 10x Pretax Rule\nIf you’re a devout Buffett cultist like this author, you must have noticed or heard that the grand master paid ~10x pretax earnings for many of his largest and best deals. The list is a really long one, ranging from Coca-Cola, American Express, Wells Fargo, Walmart, Burlington Northern, and of course the more recent AAPL purchase and his recent $25B repurchases of BRK.A shares as analyzed in my earlier article.\nThe following chart shows the price history of AAPL and its 10x pretax earning since 2010. Pretax earnings are also referred to as \"EBT\", Earning Before Taxes, in this article. As seen, Buffett made his purchases during 2016-2017 when the price is below or near 10x EBT. I was lucky enough to have made the AAPL purchases at that time myself too.\nBuffet himself also mentioned and discussed the 10x pretax multiple times in his shareholder meetings and Q&A sessions. An example quote is provided below (highlighting was added by me):\nBuffett: “Geico would be valued differently than Gen RE and other insurance businesses because it’s rational to assume a large underwriting profit and significant growth. You cannot say that about many insurance businesses. I would love to buy a new bunch of operating businesses with similar competitive positions to the ones we own now at nine to ten times pretax earnings.”\n\nSource: author based on Seeking Alpha data\nSo are there any reasons fundamental to this 10x pretax rule, or is it only a bunch of pure coincidences? I think it is the former and there are indeed many good reasons for this rule, as listed below.\nFirst, Why pretax?\nOut of all the earning metrics, EPS, operation income, free cash, dividend, etc., why do we favor the pretax earning? I think there are at least two good reasons.\n\nAfter tax earnings do not reflect business fundamentals. Taxes can change from time to time due to factors that have no relevance to business fundamentals, such as tax law changes and capital structure change. Plus there are plenty of ways to lower the actual tax burden of a company.\n\n\nPretax earnings are easier to benchmark, say against bond earnings. The best equity investments are bond like, and when we speak of bond yield, that yield is pretax. So a 10x EBT would provide a 10% pretax earning yield, directly comparable to a 10% yield bond.\n\nSecond, why 10x?\nBesides being a nice and round number, it passes the/my common sense test. A 10x pretax multiple roughly translate into 12 to 15x PE depending on the tax rates, which is not far off from the long term average of stock valuation. Furthermore, if we buy average business at 10x pretax, we already get a 10% pretax return. And if we can do better than buying only average business (like Buffett), paying 10x pretax pretty much guarantees double digit pretax earning. Of course, the 10x here is only for businesses that are conservatively leveraged (say with interest coverage around 10x). The number needs to be adjusted for a highly leveraged business or a business with loads of cash.\nThird, warning and summary\nHere a strong warning is in order. I am NOT suggesting you go out and start buying every/any stock that is below 10x EBT. As investors, we face many risks. Two of the major risks are A) quality risk or value trap, i.e., paying a bargain price for something of horrible quality, and B) valuation risk, i.e., paying too much for something of superb quality. The 10x pretax rule is mainly to avoid the type B risk AFTER the type A risk has been eliminated already.\nSo to summarize, to apply the 10x EBT rule,\n\nthe business should have not existential issue in the long run. However, at the end, this is largely a subjective judgement.\nthe business should have no existential issue in the short run either. This is can be quite reliably and objectively evaluated based on the cash flow and debt coverage.\nIf we paid 10x pretax and bought a business that meets requirement 1 and 2, we will be paying an average price for an average business. Not the best investment ever, but 10% pretax return is not that bad either. If we get a business that offers ANY growth, then we will be buying an above average business at an average price. And we will have a large chance of a double digit return compounding for a long time (if you hold onto to it long enough like Buffett).\n\nAAPL in 2016 and 2017 obviously met all of the above requirements, and it is another textbook illustration of Buffett’s value driven investment success.\nAAPL: why is he still holding it?\nThe next question now is: why is he still holding whenits valuation is not long 10x EBT? As a matter of factor, it is at ~23x EBT now, more than double 10x EBT.\nI am not going to pretend that I know all his considerations. There are so many aspects that needs to be considered with a position of this size - tax liabilities, alternative investment candidates, opportunity cost, et al.\nBut I am pretty certain about one thing – he is NOT holding AAPL as a technology stock, wishing for the next technology breakthrough and double the earning. He had made it so clear that he does not understand tech companies and will not invest in them. He must be holding AAPL for its perpetual autonomous growth – a business that can almost “automatically” grow without the need of too much reinvestment.\nHe said multiple times that there are businesses which, at the end of the day, point to a bunch of depreciated properties and equipment and tell the investors, “these are our profits.” He hates his business.\nAs we will see from the next section, APPL is the exact opposite of those businesses. And due to its ultra-high ROCE and ultra-low requirement of reinvestment to fuel future growth, it will still offer double-digit return in the longer run even under its current expensive valuation.\nPerpetual autonomous growth\nIf you, like this author, are a long-term investor who subscribes to the concepts of owner's earning, perpetual growth rate, and equity bond, then the long-term return is simpler. It is \"simply\" the summation of the owner's earning yield (\"OEY\") and the perpetual growth rate (\"PGR\"), i.e.,\nLonger-Term ROI = OEY + PGR\nBecause in the long term, all fluctuations in valuation are averaged out (all luck at the end even out). And it doesn't really matter how the business uses the earnings (pay out as dividend, retained in the bank account, or repurchase stocks). As long as used sensibly (as AAPL has done in the past), it will be reflected as a return to the business owner.\nOEY is the owner's earnings divided by the entry price. All the complications are in the estimation of the owner's earnings - the real economic earnings of the business, not the nominal accounting earnings. Here as a crude and conservative estimate, I will just use the free cash flow (\"FCF\") as the owner's earnings. It is conservative in the sense that rigorously speaking, the owner's earnings should be free cash flow plus the portion of CAPEx that is used to fuel the growth (i.e., the growth CAPEx). At its current price levels, the OEY is ~3.6% for AAPL (~27.4x price to FCF).\nAgain, the valuation is quite expensive and the OEY is merely 3.6%. But do not be under impressed yet, because there is a second part to the long term return, the part is the created by the PGR, perpetual growth rate. In the long term, the growth rate is:\nPGR = ROCE * Reinvestment Rate\nROCE stands for the return on capital employed. Note that ROCE is different from the return on equity (and more fundamental and important in my view). ROCE considers the return of capital ACTUALLY employed, and therefore provides insight into how much additional capital a business needs to invest in order to earn a given extra amount of income – a key to estimate the PGR. The reinvestment rate is the portion of income the business plows back to fuel further growth.\nSo to estimate the PGR, we need to estimate two things: ROCE and reinvestment rate.\nTo estimate the ROCE of businesses like AAPL, I consider the following items capital actually employed:\n1. Working capital, including payables, receivables, inventory. These are the capitals required for the daily operation of their businesses.\n2. Gross Property, Plant, and Equipment. These are the capitals required to actually conduct business and manufacture their products.\n3. Research and development expenses (an essential expense for a business like AAPL).\nBased on the above considerations, the ROCE of AAPL over the past decade are shown below. As seen, it was able to maintain a respectably high ROCE over the past decade: it used to be 450% early in the decade and still hovers around an average of 150% in recent years since 2016. To put things in perspective, as detailed in myprevious articleforVisa Inc., another autonomous grower that Buffett likes, Visa features a ROCE “only” around 105%.\n\nSource: author and Seeking Alpha.\nNow let’s see the reinvestment part. In recent years, the following is how AAPL has been allocating its operation cash (“OPC”). As seen, AAPL has been using on average ~33% of the OPC as maintenance CAPEx and dividend. So these two “mandatory” have been on average costing only 1/3 of AAPL’s operation cash in recent years. The quotation mark means even though dividend is usually considered an optional cost. But for a stock with AAPL’s status, management probably won’t cut it unless they really have to.\nFor the remaining 2/3, the company does have a choice. It can use it for a variety of things: reinvest to fuel further growth, retain it to strength the balance sheet, pay an extra special dividend, pay down debt, buyback shares, et al. It obviously makes total sense to reinvest all of it to fuel further growth given its 150% ROCE. At this ROCE, $1 reinvested would be fuel $1.5 of additional earning! But the problem is that for businesses at this scale, there are just not that many opportunities to reinvest the earnings. As a result, AAPL has been allocating a part of the remaining earning, on average 70% in recently years, to buy back shares. Such repurchases, besides reflecting the confidence of the management on their own business, again also signals the lack of good reinvestment opportunities.\nBut all things considered, with such spectacular ROCE, AAPL does not need that much reinvestment to grow, as elaborated below.\n\nSource: author and Seeking Alpha.\nWith a 150% ROCE, it means that even if AAPL only reinvests 5% of its earning to expand the capital employed, it could maintain a 7.5% PGR (PGR = ROCE * fraction of earning reinvested = 150% * 5% = 7.5%). As aforementioned, this is a reason that AAPL can afford to use pretty much all the OPC for dividend and share repurchase after covering its maintenance CAPEx.\nNow we have both pieces of the puzzle in place to estimate the long-term return. At its current price levels, the OEY is estimated to be ~3.6%, and the PGR is about 7.5%. So the total return in the long term at current valuation would be a double digit 11% as shown in the chart below. Also as seen, even when ROCE fluctuates somewhat, the fluctuations wouldn’t change the long-term return dramatically.\n\nSource: author.\nConclusion and final thought\nMany of Buffett's largest and best deals are purchased below or around 10x EBT, ranging from Coca-Cola, American Express, Wells Fargo, Walmart, Burlington Northern, and also the more recent AAPL purchase and his $25B repurchases of BRK.A shares.\nThis article analyzes AppleInc.under the context as the largest purchase and also largest holding in the Buffett portfolio. This analysis approaches the purchase under a framework that I call the Buffett’s 10x Pretax Rule. The analysis showed that When Buffett purchased AAPL in 2016 and 2017, it met all the requirements for the 10x pretax rule and represented another textbook illustration of his value driven success.\nThen this article also attempted to answer why he is holding it given the current relatively expensive valuation. He is definitely NOT holding AAPL as a technology stock, wishing for the next technology breakthrough to double the earning. He must be holding AAPL for its perpetual autonomous growth – a business that can almost “automatically” grow without the need of too much reinvestment. From this perspective, the result show that these shares still can offer double-digit return even under its current expensive valuation.\nAnd as a final note before ending this section, this might be the most valuable insight that I’ve learned by studying Warren Buffett’s investment philosophy. The insight really is that I do not need a business with double-digit growth to generate double-digit returns. A reliable business that can offer a stable growth at a boring rate of a few percent (like ~5%) can already provide double-digit returns with good certainty as long as A) they are purchased at a reasonable valuation, and B) they have ROCE sufficiently high so that the growth can be driven by reinvesting a small fraction of the income. In the long run, assuming a growth rate more than 5% percent probably is a dangerous assumption to start with anyway.","news_type":1,"symbols_score_info":{"AAPL":0.9}},"isVote":1,"tweetType":1,"viewCount":318,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":4,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/892191604"}