A decade-old conversation between Apple founder Steve Jobs and legendary investor Warren Buffett has resurfaced after Apple’s recent impressive third quarter earnings report. In a 2012 CNBC interview, Buffett recounted a phone call from Jobs seeking guidance on how to manage Apple’s burgeoning cash reserves.
“It was an interesting conversation because I hadn’t talked to him in a long time,” the Berkshire Hathaway chairperson said.Buffet added, “He said, ‘We’ve got all this cash. What should we do with it?’ So we went over the options.” The Oracle of Omaha outlined the typical options for corporate cash: stock buybacks, dividends, acquisitions, or holding onto it.
“I went through the logic of each thing. He told me they would not have the chance to make big acquisitions that would require lots of money,” Buffett said during the interview. When he suggested stock buybacks if Apple thought its stock was undervalued, Jobs replied, “I think my stock is very undervalued.”
What Steve Jobs said on not following Warren Buffet’s advise
But, eventually, Jobs reportedly decided not to follow Buffett’s advice. “He didn’t do anything, and of course, he didn’t want to do anything. He just liked having the cash,” Buffett said with a laugh. “It was very interesting to me because I later learned that he said I agreed with him to do nothing with the cash.”
It seems, Apple’s liking for cash reserves continues. As per the company’s earnings report, Apple cash on hand for the quarter ending March 31, 2024 was $67.150 billion, a 20.19% increase year-over-year.