Warren Buffett recollects when Steve Jobs called him for investment advice and then 'didn't do anything'

Recollecting the incident Warren Buffett said in a 2012 interview: 'It was very interesting to me because I later learned that he said I agreed with him to do nothing with the cash.' (Image credit: AFP. Reuters)

Following the release of Apple's Q3 earnings report which exceeded expectations, one of the stories doing rounds on the internet is one from 2012 when Steve Jobs asked legendary American investor Warren Buffett for some advice on where to invest Apple's cash reserves.

During a 2012 interview with CNBC, Buffett recalled the memorable phone call he had with Jobs just two years ago.

"It was an interesting conversation because I hadn't talked to him in a long time," the Berkshire Hathaway chairperson said. Jobs had called to get advice on what to do with Apple's huge cash pile. "He said, ‘We've got all this cash. What should we do with it?' So we went over the options."

Buffett said that companies usually have four choices for using cash: stock buybacks, dividends, acquisitions, or holding onto it. Steve Jobs made it clear that Apple wouldn't go for big acquisitions that required a lot of cash.

"I went through the logic of each thing. He told me they would not have the chance to make big acquisitions that would require lots of money," Buffett said during the interview. When he suggested stock buybacks if Apple thought its stock was undervalued, Jobs replied, "I think my stock is very undervalued."

But, eventually, Jobs chose not to follow Buffett's 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."