Warren Buffett will stay away from Apple Inc. (NASDAQ: AAPL) bonds for the same reason many investors have shunned them. These fixed income instruments barely yield anything at all. The Apple debt issue demonstrates why money has streamed into the stock market this year and has, depending on the point of view, made equities a phenomenal or extremely dangerous investment.

Bloomberg covered the comments by Buffett, CEO of Berkshire Hathaway Inc. (NYSE: BRK-A):

“We’re not buying bonds of Apple — we’re not buying bonds of anybody,” Buffett said on May 4. “It has nothing to do with them being a tech company. The yields are too low.”

The news service made the following calculation:

Apple’s debt sale included $4 billion of 1 percent, 5-year notes that pay 40 basis points, or 0.4 percentage point, more than similar-maturity Treasuries (USGG10YR); $5.5 billion of 2.4 percent, 10-year securities with a relative yield of 75 basis points and $3 billion of 3.85 percent, 30-year bonds paying an extra 100 points.

This continues a trend whereby large successful American companies can borrow at super low prices, often to buy up shares and increase dividends. A number of analysts have pointed out that the strategy only works if the cash flow of these public companies can cover their borrowings year in and year out. A downturn in cash flow because of a recession, or a drop in earnings because of competition or rising expenses, could drive dividend payments back down.

The search for higher yields and increases in equity value have pushed many stocks higher. Buffett has elected to invest in equities and derivative instruments. It would be ironic if low yields that lead to borrowing to increase corporate dividends eventually overwhelms company treasuries and becomes a cause for pulling the stock market back down. At that point, Buffett might look back and decide those Apple bonds were a good deal.

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