Will Warren Buffett and Berkshire Hathaway Start Investing More in Tech?


By frank corva

Warren Buffett is known for being a value investor. Value investing means buying stocks or businesses that appear to be trading for less than their intrinsic value.

If you look at the portfolio of Buffett’s holding company, Berkshire Hathaway, you’ll see that in recent years he has found value in financial, consumer staple and energy stocks, as the portfolio is dominated by these types of equities.

However, there’s one stock that stands out from most in Berkshire’s portfolio: Apple (AAPL,

Apple now comprises over 46% Berkshire Hathaway’s Portfolio,

Although it may lead you to run out and Buy AAPL sharesKeep in mind that Berkshire bought stock first At approximately $23 per share in the first quarter of 2016. As of May 10, 2023, AAPL is trading at approximately $174 per share.

If you take a value investing approach to buying AAPL, you might consider buying the stock if its price drops significantly. It is currently trading near its all-time high and is potentially more valuable,

But back to Buffett and Berkshire.

Buffett believes Apple is Best company in Berkshire’s portfolio,

It’s a little strange to hear Buffett talk so highly of AAPL — a tech stock — because 1) it wasn’t him who bought AAPL back in 2016; it was one of his lieutenantsand 2) he has admitted that he has lost several tech stock boats in his career.

Buffett’s Big Mistake on Tech Stocks and Technology Plays

While Buffett — the “Oracle of Omaha” — certainly has an extensive track record of picking the right stocks at the right prices, very few of those stocks are tech stocks.

The following are some of Buffett’s biggest misses when it comes to tech plays:

Microsoft (msft, Despite being a close friend of Microsoft founder Bill Gates, Buffett never held any position in the company. he mainly attributes it to “stupidity” as he puts it. However, he also acknowledges that his friendship with Gates would have put Gates in a position where he could be accused of sharing insider information with Buffett, and Buffett did not want to create such a scenario.

Amazon (amzn, Berkshire Hathaway only Started buying Amazon stock in 2019 — 22 years after the company IPO’d — and it wasn’t Buffett who asked for the buyout; It was one of his deputy. Buffett calls himself an “idiot” (this guy sure is hard on himself, huh?) for not meeting up sooner.

Alphabet (Google, Google is another big tech play that Berkshire missed. Reflecting on the lapse, however, it was Buffett’s partner Charlie Munger who verbally chastised himself. “I feel like a horse’s ass for not recognizing Google,” Munger said back in 2020.

bitcoin (B T c, Buffett still doesn’t believe in bitcoin Despite the tremendous increase in its price in the last 13 years. he really refers to property as in “rat poison squared.” i guess he’ll just have to enjoy living Poor Rich investments in other assets.

Buffett’s change in tone on tech

At the most recent Berkshire Hathaway annual shareholder meeting, which took place late last week, Buffett referred to Tesla, SpaceX and Twitter CEOs Elon Musk as “the one.”wonderful, wonderful boy,

Does this mean Berkshire will take a position in Tesla (TSLA, Perhaps.

Musk pointed out on twitter that Berkshire would have been big on its TSLA holdings if it had had lunch with Musk and Munger in late 2008.

It could be that Buffett and the team at Berkshire are waiting for TSLA’s price to drop to take a position, although it would be surprising to see them take a position. kathy wood size status Company.

Buffett also commented on artificial intelligence (AI) at Berkshire’s annual shareholder event last weekend.

They said that AI can change the worldAnd he got a chance to try out Microsoft’s ChatGPT a few months back with his friend Bill Gates.

However, he is also skeptical of the technology, as he compares it to an atomic bomb that we can lose control of and that we do not have the power to invent.

And Munger said that he is “personally skeptical about some of the hype going into artificial intelligence” and that “old-fashioned intelligence works pretty well.”

So, while Berkshire’s taking a bet on TSLA doesn’t seem out of the question, it looks like the institution is still far from investing in AI companies.

Berkshire Beyond Buffett

While Buffett, 92, has no plans to retire, he has already appointed his successorGreg Abel.

Abel is the chairman of Berkshire Hathaway Energy and doesn’t seem to have much experience investing in technology outside of the technology used in alternative energy generation.

So, if Berkshire is to take some chances on finding value in technology companies, it may have to rely on voices within the firm recommending buying AAPL and AMZN.

Time will tell if this becomes part of Berkshire’s approach to value investing.

The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source link