In a recent interview, Warren Buffett said he was not interested in technology stocks. He said he was not interested in companies he didn’t understand. But in the last decade, he has invested in Apple and Amazon, two tech companies he believes are here to stay. These two companies are valuable and successful, but they are not the next Facebook or Google. So why does Buffett have no interest in technology stocks?
Why doesn’t Warren Buffett invest heavily in Technology Stocks in 2008? The company, Apple, lost more than US$350 billion in value since October, and it fell again Wednesday. While the stock price isn’t going down any time soon, Buffett has been investing heavily in technology companies for decades. In 2011, he put more than $10 billion into IBM. However, he exited his position just a year later and admitted that his analysis was wrong.
Final Thought
But why does Warren Buffett invest heavily in Technology Stocks today? There are two reasons. One is because he doesn’t understand technology. The second is that he prefers to buy a good business at a fair price. Apple is one example. In 2007, Apple had an IPO, and Buffett bought shares at that time. In addition, Apple was a subsidiary of Berkshire Hathaway, and Buffett missed the big tech rally. Whether it was the company’s valuation or its value proposition, he is not a tech expert, but he has an investment philosophy that doesn’t involve investing in companies with a short term competitive advantage.
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