The Answer To The Question Everyone's Asking -- How Much Did He Make Today On Apple? May 3, 2024

Locator: 47054BRK.

Annual meeting: now on CNBC. 

May 4, 2024: annual report -- link here. 

The company bought back $2.6 billion of stock in the first quarter, up from $2.2 billion in the fourth quarter.

Two days in May:

• Apple earnings, May 2, 2024
• BRK earnings, May 4, 2024

BRK 1Q24 earnings release: link here.

Updates

May 4, 2024: Andrew Bary will have to update his story (see below). BRK sold about 13% of his AAPL holdings in the first quarter -- and, of course, missed out on huge surge yesterday. The annual meeting will be underway shortly. It can be watched live on CNBC. 

• if they sold at $170, the delta is $13 x 115 million shares = $1,495 million = $1.5 billion
  

• crawlers:
• reduced Apple holdings by 13% in 1Q24; sold about 115 - 116 million shares in 1Q24 in 1Q24; holdings still valued about $144.8 billion
• 62% decrease in earnings y/y (1Q24 / 1Q23)
  

 Chart of the week:

Original Note

Link here. 

From the linked article:

Apple rose 6% Friday to $183.38 after reporting encouraging financial results late Thursday for the March quarter.

Berkshire’s Apple stake is now worth $165 billion, against a cost of around $30 billion.

The gain in Apple stock has lifted the value of Berkshire’s holding by $9 billion and boosted Berkshire’s book value, which remains a key valuation metric for the conglomerate.

Berkshire held 905 million Apple shares at year end 2023, the most recent reporting date.

Berkshire paid an average price of about $35 a share for Apple with most of the purchases coming from 2016 through 2018. Apple accounts for over 40% Berkshire’s equity portfolio of about $380 billion.

Lazy reporting. That's a meme -- "Apple accounts for over 40% Berkshire’s equity portfolio of about $380 billion." 

Technically that's accurate but the data hasn't been updated for quite some time. My hunch: Apple accounts for more than 50% of Berkshire's equity portfolio of $400 billion. [Written before the announcement that BRK had sold 13% of its Apple equity sometime during the first quarter.]

And this is partially incorrect: Berkshire held 905 million Apple shares at year end 2023, the most recent reporting date. Yes, 905 million Apple shares is correct but the most recent reporting date was a 13F in February, 2024.

EOR-XTO -- May 3, 2024

Locator: 47053EOR_XTO.

The wells:

• 32502, 1,086, XTO, Werre Trust Federal 14X-34AXD-S, Bear Creek, t5/18; cum 599 3/24; see production here;
  
• 32501, 1,884, XTO, Werre Trust Federal 14X-34EXJ2-S, Bear Creek, t5/18; cum 498 3/24;
• 32500, 2,717, XTO, Werre Trust Federal 14X-34AXD-N, Bear Creek, t5/18; cum 810 3/24; see production here;
  
• 32499, 1,071, XTO, Werre Trust Federal 14X-34EXH2-N, Bear Creek, t6/18; cum 246 3/24;
• 32481, 2,288, XTO, Werre Trust Federal 14X-34A, Bear Creek, t9/18; cum 500 3/24;
• 32480, 2,653, XTO, Werre Trust Federal 14X-34E, Bear Creek, t5/18; cum 164 3/24;
• 32479, 2,701, XTO, Werre Trust Federal 14X-34AXB, Bear Creek, t7/18; cum 585 3/24; see production here;
  

 

• 29673, 1,987, XTO, Werre Trust 44X-34G, Bear Creek, t6/15; cum 648K 3/24;
• 29672, 1,095, XTO, Werre Trust 44X-34C, Bear Creek, t6/15; cum 569K 3/24;
• 18294, 341, XTO, Werre Trust Federal 44X-34H, Bear Creek, t3/10; cum 690K 3/24;
• 29871, 1,529, XTO, Werre Trust Federal 44X-34D, Bear Creek, t7/15; cum 532K 3/24;
  

From the blog: 

• 30912, NDIC, XTO, wells in sections 27 / 34 - 148-96 to be used as injection wells for EOR, Dunn County;

From the NDIC hearing dockets:

Again, this is an NDIC case, and not a permit. But apparently, the permits have now been awarded.

From Geoff Simon's weekly top stories, Friday, May 3, 2024:

The maps:

Hess -- 1Q24

Locator: 47052HESS.

I'm consistently amazed and irritated how CNBC consistently fails to report some really amazing stuff.

It took me awhile to get to Hess' earnings. Because I had seen no headlines, I thought the report would have been boring. Wow, it is amazing, this report was not given larger exposure especially considering the current Exxon - Chevron - Hess - Guyana story.

Link here.

Before you read further, remember that some major E&P oil companies not only missed earnings estimates but reported really poor results.

So, let's get started.

1Q24 earnings: $3.16

• beat the Zacks Consensus Estimate of $1.73
• are you kidding me. The Zacks estimate was a buckseventythree and EPS came in at $3.16
• the year-ago quarter was $1.13

Think about that. Last year, $1.13 and the estimate was $1.73 and EPS came in at $3.16.

Holy mackerel.

And then look at revenues:

• 1Q24: $3,341 million
• last year, 1Q23: $2,453 million
• Zacks estimate: $2,929 million

Think about that, revenues came in at $3,341 million when "expert" analysts forecast well less than $3,000 million.

But what bothered me even more, this was reported as $3,000 million ... hellooooo? It was $3.341 billion. Hardly chump change, but expressed in millions certainly is not as impressive as being expressed in billions.

Then this line:

Absolutely incorrect. The price of oil has been quite volatile but all the predictions of $100-oil and WTI has hardly gotten to $85. Currently, it broke below $79.

An gas -- meaning natural gas -- a disaster -- a lot of companies are reporting smaller earnings / revenue due to natural gas prices. In fact, natural gas has even negative -- and yet the writer said Hess earnings have improved due to better oil and gas prices.

Other data points:

E&P business:

• adjusted earnings of almost one-billion dollars ($997 million)
• a year ago, $405 million -- that's a [(997-405)/405] = 146% increase, year/year

Total hydrocarbon production:

• 1Q24: 476,000 boepd
• last year, 374,000 boepd
• that's a [(476-374)/374] = a 27% increase, year/year -- think about that -- production increased by 27% and yet the E&P business increased by 146%.

Crude oil production:

• 1Q24: 305,000
• last year, 216,000

Natural gas liquids production:

• 1Q24: 71 MBbls/day -- forecast: 65.3 MBbls/d
• last year: 62 MBbls/day

And there are more numbers. At the link.

Price, crude oil:

• this year: $80.06
• last year: $76.02

But look at this incredible increase in the price of natural gas which help explains Hess remarkable earnings:

• this year: $4.62 per Mcf
• last year: $4.39 per McF

Oh, give me a break

But even worse, the average global NGL selling price declined to $22.97 per bbl from $24.25 reported last year (and yet Hess reported stellar earnings).

And the numbers go on and on.

Long-term debt: $8.415 billion. It would have been nice had the writer put that $8 billion in context, otherwise it means nothing to me.

Intel -- INTC -- May 3, 2024

Locator: 47051TECH.

Link here.

Jobs -- May 3, 2024

Locator: 47050JOBS.

Spend some time on these government and non-government sites.

This is what "everyone" was watching so closely all day today.

This BLS site: I was unable to change the dates on my iPad but on the MacBook Air worked fine.

Monthly changes, 1984 - 2024:

 Monthly changes, 2023 - 2024:

Very same data, but easier to read, from Trading Economics, 10-year history:

From The Hill:

And then Drudge said this:

OMG. Hiring slowed in April.

Looks like what we saw in July, 2023, and October, 2023. 

Whatever.

Whatever it takes to make the Dow surge 500 points. 

***************************
The Movie Page

Writers.

 101 greatest screenplays.

Western Guild of America West.

Link here.

Announced 2006.

#1: Casablanca.

#4: Citizen Kane

#7: Sunset Blvd.

#9: Some Like It Hot.

#12: Dr Strangelove.

#14. Lawrence of Arabia.

#15. The Apartment.

#16. Pulp Fiction.

#21. North By Northwest.

#24. Eternal Sunshine of the Spotless Mind.

#32. Fargo.

#47. The Maltese Falcon.

#101. Notorious.

Week 18: April 29, 2024 -- May 5, 2024

Locator: 47049TOPSTORIES.

Top story:

• Israel gives Hamas one week to release the hostages
  
• AAPL, QCOM, AMGN
  
• Biden administration says oil is too expensive for government to refill SPR at this time.
  

Top international non-energy story:

• Ukraine
• France's Macron ready to send French troops into Ukraine

Top international energy story:

• Exxon - PXD acquisition deal closed; $60 billion deal;
  

Top national non-energy story: 

• Trump criminal trial continues; enters third week next week;
  
• 
  

Top national energy story:

• WTI drops below $79.
  

Focus on fracking: link here.

Top North Dakota non-energy story:

• 
  

Top North Dakota energy story:

• 
  

Geoff Simon's quick connects: link here.

*************************************
Market

Market at the close:

For the archives -- what's going on that affected the market today:

• AAPL's March quarter earnings call surprises
• market surges; Apple announces largest equity share buyback by any corporation ever; 
• increases dividend by a penny;
  
• AAPL surges;
  
• Fed / JPow center of attention; gives dovish comments at May FOMC meeting May 2, 2024
• FPow says next rate change will be a cut, not an increase
  
• GDP estimate, GDPNow, for 2Q24, jumped from 1.6% actual 1Q24 to 3.9% estimate 2Q24
• relatively quiet in the Mideast; Israel gives Hamas one week to release hostages
  

The Bakken Is So Predictable; The Bakken Never Ceases To Amaze Me -- May 3, 2024

Locator: 47048B.

During the heydays of the Bakken boom, no one -- I don't think anyone -- expected this. And some folks still don't believe / accept it. A lot of folks don't understand it. I think this is the only ad-free, subscription fee Bakken blog that reports it.

The wells:

• 33330, 2,093, XTO, Dakota Federal 42X-36XHE, Bear Den, McKenzie County;
• 34942, SI/A, XTO, Dakota Federal 42X-36XCR, Bear Den, McKenzie County;
• 16319, 410, XTO, Bear Den State 2-36H, Bear Den, McKenzie County, t4/08; cum 265K 3/24;
  

Production:

• 34942:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2024	31	37965	37879	26348	64026	63857	169
BAKKEN	2-2024	25	45309	45068	35078	74267	73943	324
BAKKEN	1-2024	0	0	0	0	0	0	0
BAKKEN	12-2023	0	0	0	0	0	0	0
BAKKEN	11-2023	0	0	0	0	0	0	0
BAKKEN	10-2023	0	0	9	0	0	0	0
BAKKEN	9-2023	2	286	277	1449	735	0	735

• 16319:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2024	31	14336	14420	5937	22507	22057	162
BAKKEN	2-2024	29	12858	12810	7609	25973	17555	8150
BAKKEN	1-2024	31	8433	8436	14918	17035	11871	4875
BAKKEN	12-2023	26	5623	5672	11423	11359	7099	4049
BAKKEN	11-2023	30	10669	10794	14731	13031	12501	252
BAKKEN	10-2023	28	15286	15115	8953	17744	17500	0
BAKKEN	9-2023	24	20829	20497	13908	13619	8405	5082
BAKKEN	8-2023	4	272	366	7440	503	0	488
BAKKEN	7-2023	0	0	0	0	0	0	0
BAKKEN	6-2023	0	0	0	0	0	0	0
BAKKEN	5-2023	0	0	0	0	0	0	0
BAKKEN	4-2023	24	408	500	107	824	0	676
BAKKEN	3-2023	31	514	532	135	1037	0	748
BAKKEN	2-2023	28	473	463	269	955	0	694
BAKKEN	1-2023	31	672	707	77	1359	0	1070
BAKKEN	12-2022	31	628	611	60	1268	290	693
BAKKEN	11-2022	30	493	380	68	997	631	86

Original production, 16319:

BAKKEN	10-2008	31	2271	2592	214	3290	2836	0
BAKKEN	9-2008	25	2497	2891	294	2756	2364	0
BAKKEN	8-2008	25	2424	1754	724	2916	0	2511
BAKKEN	7-2008	8	651	1030	90	783	0	754
BAKKEN	6-2008	30	3419	2944	362	4113	0	3990
BAKKEN	5-2008	30	5133	5406	747	6175	0	5971
BAKKEN	4-2008	12	3394	2781	2001	4124	0	4016

The map:

One New Permit; Three Permits Renewed; Two DUCs Reported As Completed -- May 3, 2024

Locator: 47047ECONOMY.

I lost the bubble on the US equity market this week, but the tickers that caught my eye: AAPL, QCOM, and AMGN. 

Biggest story? Exxon completes $60 billion acquisition of Pioneer.

The dumbest thing I heard all week on CNBC: a panelist on "Fast Money" recommended  Peloton and recommended staying away from AAPL.

The most fascinating company: TSLA. Has Musk abruptly changed his strategic focus? We may not know for quite some time. 

Most hypocrticial: "High oil prices force Biden administration to halt SPR refill plans. The Biden administration has canceled plans to refill the SPR due to rising oil prices, halting solicitations for oil deliveries to the reserve's sites along the Gulf Coast." LOL. Did anyone really think that with gasoline prices rising at the pump, the Biden administration would take more oil off the market during the last few months of the presidential campaign? LOL. Link here, but the headline says it all.

*********************
Back to the Bakken

WTI: $78.11.

Active rigs: 38.

One new permit, #40717:

• Operator: Oasis
• Field: Eightmile (Williams)
• Comments:
• Oasis has a permit for another Aune Federal well, lot 3, section 30-153-102, 
• to be sited 2546 FNL and 439 FWL.

Three permits renewed:

• Foundation Energy: three Elkhorn Ranch Federal permits, Elkhorn Ranch, Billings County.

Two producing wells (DUCs) reported as completed:

• 33330, 2,093, XTO, Dakota Federal 42X-36XHE, McKenzie County;
• 33927, n/d, BR, Parrish 2C MBH, McKenzie County;

Global Economy -- Based On Unemployment Numbers -- Seems To Be Doing Just Fine -- May 3, 2024

Locator: 47047ECONOMY.

Global economy: in much better economic condition that most folks realize. Unemployment globally is not a major issue. Unemployment is one of three components of "stagflation."

US unemployment: link here to the Washington Post. Sets record of most consecutive months (27?) with unemployment below 4%.

This is the data point that was responsible for the surge in the market today, Friday, May 3, 2024, along with Apple's March quarter results and Amgen's weight medication announcement.

But, Europe, also is doing very, very well, link here.

Unemployment in the Eurozone remained at a record low of 6.5% in March, the same as February. 

The biggest economy of the bloc, Germany, appears to have a fairly static unemployment rate which remained at 3.2% for the first three months of the year.

Meanwhile the fourth largest economy, Spain, is battling the highest jobless rate in Europe, though it has been inching down each month, from 11.9% in January, to 11.7% in March.

The second biggest economy, France, has seen a similar pace of lowering its own rate, which was 7.3% in March, while Italy, the fourth largest contributor to the European GDP, reported an unexpected drop in its unemployment rate to 7.2%, the lowest in more than 15 years, from a downwardly revised 7.4% in the previous month.

Among the 27 countries in the European Union, the Czech Republic and Poland are the only two with the lowest rate, at just under 3%.

Buffett And Apple -- May 3, 2024

Locator: 47046BUFFETT.

Apple and Buffett without Munger. Link here to WSJ. 

Apple is Warren Buffett’s greatest investment. It has also become one of his riskiest.

In 2016, Buffett made perhaps the most surprising bet of his career. That year, Berkshire Hathaway, the company he runs, began buying up shares of Apple—the exact kind of stock Buffett and his longtime partner, Charlie Munger, had long avoided.

A few years earlier Buffett, in a conversation with executives of another firm, had suggested that Apple fit the profile of a stock one might short, rather than a company to buy, according to someone close to the matter. Buffett says he doesn’t recall the conversation and over the past 50 years, “I have never recommended any stock to be shorted and always advise people not to short stocks.”

In 2013, Munger told Reuters: “You could hardly think of another business that is more un-Berkshirelike than Apple.”

Yet working with protégés, Buffett soon transformed into an Apple bull in a remarkable about-face. After an initial purchase of nearly 10 million shares worth about $1 billion in 2016, Berkshire added to its holdings later that year and then stepped up its buying in 2017 and 2018, spending about $36 billion on the stock over those years. Berkshire later trimmed some of those holdings.

By the end of the third quarter of 2018, Berkshire’s Apple stake represented about a quarter of its entire investment portfolio. In dollar terms, it was twice as large an investment as Buffett had previously made.

The move has paid off, in a very big way. Today, Berkshire’s 5.9% stake in Apple is worth about $157 billion, even though Apple has fallen lately. Berkshire is sitting on about $120 billion in paper gains, likely the most money ever made by an investor or a firm from a single stock. Nothing in Buffett’s long career comes close. Apple stock represented nearly 50% of Berkshire’s stock portfolio at year-end.

My hunch: a lot of folks would argue whether Apple is now a risky stock. 

KO is considered one of Warren Buffett's best holdings ever. Hold that thought.

Apple has had an atrocious year. Six quarters of consecutive decreasing revenues. Needs to be fact checked. And yet this past year, AAPL has greatly outperformed KO in the stock market. Over five years, no comparison. Apple has returned 258%; KO has returned a paltry 25%. 

And yet I haven't heard anyone say KO is a risky stock. Whether or not KO is risky, it sure has been a lousy stock except for the dividends. 

KO's market cap after all these decades? $270 billion. Apple, much younger, $3 trillion.

 

Why is Apple so risky for Buffett? Because his portfolio is no longer diversified. Close to 60% of his equity portfolio is now due to AAPL. [By the way, "diversification" is a whole 'nother issue. If you know what you are doing and have great "faith" in your decisions, why is "diversification "the end all and be all" for so many investors.]

So, how does Buffett mitigate that risk? Forget about AAPL; let it run on auto-pilot. Let his shareholders know with no uncertainty that AAPL is a long term holding and he will hold it regardless of what the stock does over the next several years. 

Forget about AAPL and concentrate on growing the rest of his porftolio so that someday, perhaps in five years, his Japanese holdings will be equal to the value of his Apple holdings.

QQQ -- History

Locator: 47045QQQ.

May 3, 2024: link here. 

April 29, 2024: link here.

April 29, 2024: link here.

A Trifecta — May 3, 2024

Locator: 47044ECONOMY. 

The trifecta:

• JPow’s incredibly dovish and clear comments earlier this week
• AAPL’s results; market reaction
• jobs report this morning

Perfect day for tax-loss harvesting.

Great day to check top ten components in Invesco’s QQQ. I’ve never discussed this before on the blog; maybe time to share my thoughts.

Link here. 

Sell in May, go away? A July cut looks very possible. Maybe not likely but certainly on the table.

If the jobs report one month from now (the May data) gives JPow comfort, look for a rate cut in July. 

Other trifectas.

Apple trifecta:

• services earnings hits record
• China’s iPhone sales not as bad as feared
• massive, record-setting buyback

By the way: Apple’s buybacks are not new, simply part of their business. Six years ago Apple announced a $100-billion buyback and the company had a market cap of under a trillion dollars. Now a similar buyback and folks think the buyback is massive. Hellooo? This is now a three-trillion-dollar market cap company. The buyback was trivial in the big scheme of things.

110 billion / 3 trillion = 3.7%.

Is Apple a bank that happens to sell smart phones?

Big Tech buybacks are huge; not just AAPL. Another buyback trifecta:

• GOOG
• META
• MSFT

And, finally, this trifecta:

• Cinco de Mayo 
• The Kentucky Derby
• first summer weekend for many colleges 

*******************************
The Book Page

A History of the Jew in America, Howard M. Sacher, c. 1993.

I picked up this book at a discount / used book store in Nashville many months ago. I started reading it some time ago, and then moved on to something else.

Am starting over. It's simply an incredible book. A must-read for a college-bound student majoring in geopolitics.

I post my notes on this book at this blog.

Market Surges! 8:36 A.M. CDT -- Friday, May 3, 2024

Locator: 47043SCHWAB.

Temporarily unable to get to Schwab accounts -- back up in less than 90 seconds. May have been an issue with my app. No evidence any problem. [Later: clearly there are intermittent issues with Schwab today, both at the site directly and on the app.]

Market surges. 

• Dow up 450 points
• S&P 500: up 53 points
• NASDAQ: up 282 points

BRK: AAPL now accounts for more than 52% of the BRK equity portfolio.

• market cap: $870 billion -- trending toward $1 trillion
  

AMGN: AMGN adds 200+ points to the Dow.

 
Cocoa:

California Rail Update -- May 3, 2024

Locator: 47042B.

California high-speed train update: two train projects.

TGIF -- Gasoline Demand, WTI -- May 3, 2024

Locator: 47042B.

VIX:  under 14.

NBA playoffs: no surprises yet.

Gasoline demand, link here:

BLS: link here. 

******************************
Back to the Bakken

WTI: $78.87.

Sunday, May 5, 2024: 6 for the month; 70 for the quarter, 269 for the year
40277, conf, BR, Carlsbad 1B UTFH,

Saturday, May 4, 2024: 5 for the month; 69 for the quarter, 268 for the year
39465, conf, Hess, EN-Bakke-157-93-1522H-6,

Friday, May 3, 2024: 4 for the month; 68 for the quarter, 267 for the year
None.

RBN Energy: Nigeria's Dangote refinery likely facing a long, slow ramp-up. Archived.

The new 650-Mb/d Dangote refinery in Nigeria instantly became Africa’s largest and the world’s seventh-largest by capacity when it finally began processing crude into diesel and aviation fuels in January after years of delays and cost overruns. Long touted as Nigeria’s ticket to ending refined fuels imports by supplying its own markets — with plenty to spare for exports — the Dangote facility could substantially impact trade flows and global supply if it lives up to years of homegrown ballyhoo. In today’s RBN blog, we will examine Dangote’s long road to production, and why we see a slow ramp-up to full capacity through 2026.