Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)'s chairman Warren Buffet offered a sagacious advice to Apple Inc. (NASDAQ:AAPL) during his 3-hour appearance on CNBC's "Squawk Box" today. When asked about his opinion on the current decline in Apple stock and shareholder pressure to raise dividends, Buffett said if he were Tim Cook, he would be buying back Apple shares.
Buffett advised Apple Inc. (NASDAQ:AAPL) to repurchase its owns shares at low prices and start building value instead of worrying about pushing Apple share prices on a daily basis. The Berkshire CEO also told "Squawk Box" that he once had a conversation with Steve Jobs about what Apple should do with its $137 billion-plus-growing cash pile. Buffett said he told him to buy back shares at reduced prices.
He is giving the same advice to Tim Cook: buy dollar bills at 80 cents if you get the opportunity. Warren Buffett also said if Cook can continue to run the company well, its shares will respond accordingly. When asked about the pressure from the hedge fund manager David Einhorn to raise dividends and offer preferred shares, Buffett said the best thing Apple Inc. (NASDAQ:AAPL) can do is simply ignore him.
Citing an example, the Oracle of Omaha said Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)'s share prices have tumbled more than 50 percent four times in its history. In those time, Buffett said, there were hundreds of people asking to distribute dividends, do this, do that, etc. But the only thing he did was to buy more Berkshire shares at low prices, and keep working on improving the company's value.
The world's richest investor added that Apple Inc. (NASDAQ:AAPL) might be sitting on "too much" cash because the iPhone maker hasn't yet been taxed on two-third of its cash that is kept overseas.
Though Warren Buffett doesn't own Apple Inc. (NASDAQ:AAPL) shares, he is positive about the company's outlook. He once said he wouldn't be surprised at all if Apple Inc. (NASDAQ:AAPL) is worth a lot more in a decade. But it is too risky for Berkshire. Buffett said he simply doesn't know about where the technology is heading, about tech companies and their potential competitors. Buffett recently invested $13.1 billion in International Business Machines Corp. (NYSE:IBM), a tech company, apparently he considers IBM a much safer investment.