Warren Buffett: Steve Jobs Didn’t Take My Advice to Buy Back Apple Stock

Found this on Yahoo Finance (I don’t watch CNBC unless I really need to).

Per Buffet:

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…
And then I asked him the question, I said .. ‘I would use it for
buybacks if I thought my stock was undervalued.’ And I said, ‘How do
you feel about that?’ The stock was 200-and-something. He said, ‘I
think my stock is very undervalued.’ I said, ‘Well, what better to do
with your money?’ And then we talked awhile. And, he didn’t do
anything, and of course, he didn’t want to do anything. He just liked
having the cash. It was very interesting to me because I later learned
that he said I agreed with him to do nothing with the cash. (Laughs.)
He didn’t want to repurchase stock although he absolutely felt his stock
was significantly underpriced at two-hundred and whatever it was then.

 This was my reaction…

During the period the stock was trading in that $200 range, it was constantly held down due to a variety of factors (external economic ones, ones regarding Jobs’ health issues, options pinning, HFT manipulation, etc).  Perfect for re-purchasing stock with the effect of reducing the float and increasing EPS.  A buyback executed under such circumstances is not equivalent to that cash burning a hole in ones wallet.  Jobs was great in many areas but looking out for the best interest of shareholders (when it made sense like in the above) was not one of them.

Even at current levels, AAPL in many ways is still not fairly valued and worthy of a buyback.  Hope Tim Cook does better in this area…