[mxschumacher]

Apple pays its employees, utilities, insurance, taxes, bondholders, suppliers etc, their margin is not 100%, more like 25%. Profits ultimately drive company valuations. The cash does not just flow through to Berkshire, the dividend yield is relatively low.

I don't understand what you are trying to say about MacBooks being 11% more expensive?

[soheil]

Sure it may not flow directly to Berkshire, but let's take employee compensation for example. If the business value of Apple is 10% higher because it had retained the value it created instead of Berkshire owning it then wouldn't Apple's stock in turn be 10% higher in theory? If so then if I'm an employee at Apple I would be happy with 10% less stock as part of my compensation package and that's money Apple would have had to pay me if that were not the case. So wouldn't this affect the price of Macbook?

[intev]

It never works out like that in theory or practice. A company cannot retain it's value all by itself. Value is assigned to the company by 3rd parties. If you started a company and claimed that your stock is worth $100 per share, and there are no buyers, are you really worth $100? However, if you claim to be worth $100, and I offer you $120, you would sell to me because you think you're worth less than what I'm paying for it. The moment I bought it I actually created value for your company because I just demonstrated to the entire market that you are worth more than you think. Then everyone else will start pricing you higher. It has huge knock on implications. Buffet buying Apple was basically a huge buy signal for many investors, and that action itself increased its value.