Warren Buffet Joins Hands With Apple
The “Oracle of Omaha,” otherwise known as Warren Buffet has long time sworn off the tech industry. Word broke on May 16th of him buying a $1 billion stake in Apple Inc. Buffett is famously opposed to investing in tech companies, and four years ago Buffet specifically ruled out Apple as a possible investment. Buffet stated in a shareholder meeting that he wouldn’t invest in Google Inc. or Apple because he doesn’t know how to value them. He went on to say that that he “would rather be certain of a good result than hopeful for a great one.” He went on to tell the Associated Press, “It’s too hard to determine what tech companies will be worth in the future because their businesses evolve so quickly, but he’s certain Snickers candy bars and Coca-Cola will remain popular decades from now. Whenever you get a truly extraordinary business, they’re the hardest ones to value. It’s much easier for me to figure out what Coca-Cola is worth than Google or Facebook or you name it.” In the recent years, Buffet has added two guys to Berkshire’s investing team, Todd Combs and Ted Weschler. Buffet’s new guys have the enthusiasm to go into the corners of the market that Buffet will not, one of those being the tech sector. Buffet’s stance on investing in the tech industry shows how much rope he is willing to give these new protégés. It also shows what faith Buffet has in the tech industry. As much as Buffet says he will never invest in the tech sector, he wouldn’t let his investors drop money on something that is going to go south. Apple is the classic Berkshire stock. The tech industry is something that is always going to be around. You would be hard-pressed to find someone who doesn’t have a cell phone or a personal computer. Buffet has not come clean about which one of his guys made the investment in Apple, only that he was not consulted on it. Berkshire Hathaway’s shares were valued at around $1.07 billion as of March. Today, those shares are valued at $920 million. We will be keeping tabs on this purchase, stay tuned for transaction updates as they come along.