The Cash Conundrum: What Steve Jobs and Warren Buffett Really Discussed

A decade-old conversation between Apple founder Steve Jobs and legendary investor Warren Buffett has resurfaced after Apple’s recent impressive third quarter earnings report. In a 2012 CNBC interview, Buffett recounted a phone call from Jobs seeking guidance on how to manage Apple’s burgeoning cash reserves.

“It was an interesting conversation because I hadn’t talked to him in a long time,” the Berkshire Hathaway chairperson said. Buffett added, “He said, ‘We’ve got all this cash. What should we do with it?’ So we went over the options.”

The Oracle of Omaha outlined the typical options for corporate cash: stock buybacks, dividends, acquisitions, or holding onto it. Buffett suggested that if Apple thought its stock was undervalued, it could consider stock buybacks. However, Jobs had other plans.

Two of the greatest business minds of our time

The Advice That Wasn’t Taken

According to Buffett, Jobs didn’t take his advice. “He didn’t do anything, and of course, he didn’t want to do anything. He just liked having the cash,” Buffett said with a laugh. “It was very interesting to me because I later learned that he said I agreed with him to do nothing with the cash.”

Apple’s cash reserves continue to grow

The Legacy Lives On

It seems that Apple’s liking for cash reserves continues to this day. As per the company’s earnings report, Apple’s cash on hand for the quarter ending March 31, 2024 was $67.150 billion, a 20.19% increase year-over-year.

Apple’s earnings report shows a significant increase in cash reserves

The conversation between Jobs and Buffett serves as a reminder that even the greatest business minds can have differing opinions on how to manage a company’s finances. While Buffett’s advice may not have been taken, it’s clear that Apple’s cash reserves have continued to grow under the company’s current leadership.

The legacy of Steve Jobs lives on under Tim Cook’s leadership