Berkshire Meeting: How Does Berkshire Feel About Tech and Its Apple Investment?
May 06 2017 - 12:02PM
Dow Jones News
This question on technology was widely expected. Berkshire
Hathaway long avoided tech stocks, because Messrs. Buffett and
Munger said they didn't understand them. Then Berkshire bought
International Business Machines Corp. in 2011 and Apple in 2016.
Since Berkshire recently changed its view on IBM and sold one-third
of its stake, how does Berkshire feel about tech and its Apple
investment?
"I was wrong" on IBM, Mr. Buffett says, a strong statement on a
company that he still holds a large stake in.
But IBM and Apple are very different companies, he says, and
Apple is more of a consumer products company.
"It's a different sort of analysis," he said. "Doesn't mean it's
correct, and we'll find out over time. But they are two different
types of decisions."
Then the two men talked about two missed opportunities in tech:
Google and Amazon, companies they admire greatly but didn't invest
in.
On Google, Mr. Buffett notes that Berkshire was a customer of
the search giant through Geico. He learned early on that Geico was
paying money to Google directly every time someone clicked through.
There was little capital needed in the transaction and tons of
scale.
But, for whatever reason, he passed.
And on Amazon, the two had immense praise for the business, and
specifically founder Jeff Bezos. Mr. Buffett was particularly
impressed by Mr. Bezos's stewardship of both Amazon and The
Washington Post.
That said, neither investor saw themselves in Mr. Bezos.
Mr. Munger notes that he's more like the Mellon family, whereas
Mr. Bezos is a different type of creature altogether.
Mr. Munger also noted that Berkshire made a mistake in its
Wal-Mart investment, most of which had been sold by the end of
2016. Mr. Buffett has said in the past that they didn't anticipate
how much Amazon would threaten the retail industry.
Click here to see the full live coverage of Warren Buffett at
Berkshire Hathaway's annual meeting:
http://www.wsj.com/livecoverage/berkshire-hathaway-2017-annual-meeting-analysis
Write to Nicole Friedman at nicole.friedman@wsj.com and Geoffrey
Rogow at geoffrey.rogow@wsj.com
(END) Dow Jones Newswires
May 06, 2017 11:47 ET (15:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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