Tag Archives: Apple

Historical Percentage Of S&P 500 Market Cap Held By Five Biggest Stocks

The below chart has been making the rounds on Twitter. It shows the percentage of the S&P 500 market cap which is held by the top 5 biggest stocks in the S&P 500. Currently the concentration in these five stocks is at 19%. This is not a record percentage as this percentage has been much higher in the past.

Historical percentage of S&P 500 market cap held by the five largest stocks 1990 - 2020
Historical percentage of S&P 500 market cap held by the five largest stocks 1990 – 2020

Currently these five stocks are: Microsoft, Apple, Amazon, Google & Facebook.

Top 10 S&P 500 stocks by market cap (Blackrock)
Top 10 S&P 500 stocks by market cap

If you zoom in on just the two biggest stocks by market cap (Microsoft and Apple) the percentage of these two in the S&P 500 is almost 10%.

Percentage of S&P 500 market cap held by top two stocks
Percentage of S&P 500 market cap held by top two stocks

However, this chart shows that this concentration in just five stocks has been much higher in the past. In the 1960’s concentration was above 25%.

Historical percentage of S&P 500 market cap held by the five largest stocks 1964 - 2018
Historical percentage of S&P 500 market cap held by the five largest stocks 1964 – 2018

Berkshire Hathaway’s Apple Stake

Berkshire Hathaway and Apple are currently the second and fifth company in the S&P 500 by weighting in the index. The market capitalisation for these companies are currently $ 980 billion for Apple and $525 for Berkshire Hathaway.

At this moment Warren Buffet’s Berkshire Hathaway holds a $ 50 billion stake in Apple. This position is 5% of the market capitalisation of Apple and more interestingly 10% of the market capitalisation of Berkshire Hathaway. The stake in Apple is 25% of Berkshire’s equity portfolio. Meanwhile Berkshire’s has hit the enormous amount of $ 122 billion in cash.

S&P 500 top 10 holdings
S&P 500 top 10 holdings as of September 12, 2019

Berkshire’s performance over the years has been stunning, as I’ve posted before. In euro’s though, the performance is even more stunning the last decade since the effect of the dollar gaining in value has added to performance.

Berkshire Hathaway B in Euro
Berkshire Hathaway B in Euro

The Problem With Apple’s Offshore Cash Hoard

Apple has a lot of cash as can be seen on the bar graph below. But the problem is that most of it is outside of the U.S. They can’t use this cash to pay out as a dividend or buy back stock because then they first have a to pay a U.S. profit tax on the amount of cash. Only cash and investments held domestically in the U.S. can be used for this. It is one of the reasons why Apple decided to issue new debt to buy back stock instead of paying a tax in the U.S. to move their money from the offshore accounts to the U.S.

Apple's Cash Q4

Apple’s Cash and Investments 2013 Q4

As you can easily see on this bar graph most of the cash and investment are held in offshore accounts.

Apple cash and investment held offshore Q1 2013

Apple cash and investment held offshore Q1 2013