Warren Buffett saying he sold Apple Inc. (AAPL) too early should, in theory, be a bullish signal. It's the classic "I was wrong, this thing is great" admission. But the other half of his message is more telling: he's not buying it back right now. That's the billionaire's way of saying that even after the recent dip, the market's most important stock might still be too expensive.
This isn't just a Berkshire Hathaway Inc (BRK) problem. For the millions of investors parked in ETFs, Buffett's pause button is a spotlight on a fundamental flaw in passive investing: you don't get to choose when to step away from a single stock, even when its price looks questionable.
You Don't Own 'Tech'—You Own a Whole Lot of Apple
Apple's dominance in the ETF world is staggering, and it's often much larger than investors realize. It's not just the big, broad funds like the SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust (QQQ) that have meaningful stakes. The real eye-opener is in the sector ETFs that people buy specifically for diversification within tech.
Take a look at funds like the Global X PureCap MSCI Information Technology ETF (GXPT), Fidelity MSCI Information Technology Index ETF (FTEC), Vanguard Information Technology ETF (VGT), iShares U.S. Technology ETF (IYW), and the VanEck Technology TruSector ETF (TRUT). Each of them currently allocates roughly 15% to 20% of their portfolio to Apple alone. If you own a couple of these, thinking you're spreading your bets, you're mostly just multiplying the same one.
Buffett's Real Message: Price Matters, Even for Great Companies
To be clear, Buffett is still extremely bullish on Apple the business. His latest comments reaffirm that. But his conviction about waiting for a better price underscores a critical investing truth: a great company does not always make for a great investment at any given moment.
For ETF investors, that nuance disappears. You don't have the choice to wait. Your options are binary: sell the entire ETF (and potentially miss gains from all the other holdings) or keep holding and accept the high concentration risk. In essence, passive investors are forced into two uncomfortable positions: they must own Apple at high weights, and they are unable to sell Apple even if they think the price is too high. So when Buffett steps back, ETF investors are still all-in.
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