But today, Apple's shares are no longer $35 (split-adjusted). They have rocketed past $120. Because of that massive share price increase, Apple's valuation has ballooned as high as 38 times earnings. That is almost four times Apple's valuation when Buffett was buying big. And that makes this great company much less attractive as an investment. Buffett Has Made a Mistake Here Before Buffett's big win on Apple reminds me of another incredible investment he made three decades ago. In the late '80s, Warren Buffett also believed he had found an opportunity that offered a powerful competitive moat at an attractive valuation... Buffett invested $1 billion of his portfolio in Coca-Cola (NYSE: KO). At that point, $1 billion was a huge amount of money, even for Buffett. It was more than one-third of his entire portfolio. But Buffett was certain that Coca-Cola was going to experience huge earnings growth in the coming years. The company had just begun to tap into emerging markets. Billions of people living across the world were desperate for a Coke. Within the decade, Coca-Cola shares had gone up 13 times and Buffett had made $12 billion on his $1 billion investment. But then he made a mistake... He didn't sell. By 1998, when Buffett was sitting on a $12 billion profit on Coca-Cola, the company had gotten very expensive. Buffett originally purchased his shares around 10 to 14 times earnings. A great company at a great price - sounds familiar, doesn't it? By 1999, Coke's valuation had exploded to near 50 times earnings. But Buffett didn't sell. And he regretted it... Coke shares hit a high of $43 in 1998, then drifted downward for years, falling to $19 in 2005. Buffett did not see his Coca-Cola shares exceed $43 by a significant amount again until 2019. That was more than two decades after Buffett could (should) have sold in 1998 and cashed out with $13 billion. If Buffett had cashed out of Coke in 1998, he could have reinvested that $13 billion elsewhere and made who knows how much more than he did by sitting on his shares of Coca-Cola. Certainly billions - likely tens of billions... Not selling Coca-Cola in 1998 at 50 times earnings was a rare mistake. Buffett has admitted as much. There are times when a buy-and-hold strategy fails. Buffett learned this the hard way. But today's investors shouldn't have to... Chief Income Strategist Marc Lichtenfeld is unveiling a new way to trade the volatile biotech sector. Based on events he calls "Lightning Strikes," his strategy depends on finding great companies at great prices - and then getting out at just the right time. Using this strategy, Marc expects to show his readers the chance to double their money every 30 days on average. Click here to learn more. Now, with Buffett's Apple investment worth $120 billion and trading for almost 40 times earnings, this looks eerily like his Coca-Cola investment in 1998. I can't wait to see whether he cashes out this time or risks a repeat of what happened with Coca-Cola. Good investing, Jody | 
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