In early 2016, Warren Buffett started buying Apple stock.
By the time Berkshire had accumulated its full position, Apple represented over 50% of the entire equity portfolio.
And from 2004 to 2023, Berkshire returned 542%… compared to the S&P 500 at 537%. A near-dead heat.
Strip out Apple? Berkshire returned 442% - so a meaningful underperformance of the index.
This has been circulating on X lately as a gotcha moment... but I think the argument is dumb.
Apple was Berkshire's single biggest driver over that period, full stop.
Without it… Buffett's last two decades look ordinary.
The same argument gets made about Bill Ackman…
Pershing Square has posted strong returns since inception, but peel back the layers and it was a handful of trades did the heavy lifting…
Mainly a 26x return buying into General Growth Properties during its 2009 bankruptcy, plus a couple macro bets that paid off big time.
Another post on X put it this way - if you strip out those trades then Ackman's annualised return since inception drops to around 10%.
So there it is…
Two of the most followed names in investing, exposed as... average.
Except… think about what this argument is actually doing.
It's asking you to remove someone's best decisions from their track record and then assess whether they're any good.
You could run this exercise on literally anyone and make them look worse…
Strip the iPhone from Steve Jobs's legacy at Apple and you've got a guy who got fired from his own company.
Strip the search algorithm from Google's early years and you've got two Stanford PhD students with a science project.
Strip Palantir, Micron and Meta from my recommendations and then my own track record looks mediocre.
But this is a MORONIC way of assessing someone’s ability
Because this entire game is finding the asymmetric bets.
The ones that return 26x, or that anchor an entire portfolio for a decade.
The ability to identify Apple in 2016 at a price that made it worth owning at scale IS the skill.
So the question isn't "what if you hadn't done that."
The question is… how many investors had the conviction to make the same bet (and hold it)?
Most didn't.
There's a version of this story where Buffett rotates into a diversified basket of financials and industrials in 2016 instead… while keeping Apple as a small position… and so Berkshire quietly underperforms for another decade. But that version produces no viral posts.
The argument also has a blatant flaw in that the criticism only works in reverse… because we're removing the wins.
Nobody runs the analysis the other way…
What if we strip out Ackman's Valeant disaster, or Buffett's Kraft Heinz write-down?
Do that and their record starts looking considerably better.
You get to cherry-pick the exclusions, or you don't. Pick one.
The reason this kind of analysis spreads is that it appeals to a particular instinct… the one that says great investors are mostly lucky… that skill is an illusion… that no one can possibly beat the index.
And maybe that's right for most people… I'm not arguing everyone should try to pick stocks.
But if your argument against someone's track record is that their best trades happened... you've already lost.
Oliver
P.S.