Apple Inc.

[weijian]

The Oracle of Omaha (and his team) is not always right in terms of decision making. An easy one was his favorable assessment of Wells Fargo and its people, before they were found to be hacking poor people's money.

But generally, he is overwhelmingly right after money-weighting all the decisions. If I half my biggest stake in my portfolio, it means something. So when Buffett and Co halves theirs, it surely means something. And my guess is that the official reason/s is just been his diplomatic self of "praise by name, criticise by category".

In recent years, due to a conflux of factors like protectionism or simply the "Innovator's Dilemma" at work, foreign champions of China in their categories of automotive, (overpriced) coffee drinks and probably now smartphones are finding that the "going is getting tough(er and tougher)".

Of course, China's market breadth is huge as much as it is deep. Once upon a time, Danone got scr*wed by its PRC gf Wahaha Group but came back wiser selling formula milk over drinks. Definitely more sticky as we (like middle class) prioritize what we put into our newborn babies' mouth over our own. However after many moons, it seems the tide is turning again. I also read that in recent times, certain US champions like Sam's Club (Walmart) and Costco are starting to strive in China.

Apple is definitely still going to be successful and have the best margins (and profit) of all handphone brands, but the days of gullible Chinese youths trading their kidney for an Iphone are probably over. And if history is any guide, the odds are against it in this part of the world.