“Investors might question Warren Buffett’s long-standing aversion to tech stocks after his Berkshire Hathaway bought 9.8 million shares of Apple,” Josh Funk reports for The Associated Press. “Buffett has always avoided technology companies because he said it was too hard to pick which ones would prevail long term, although he made an exception to that rule to buy a major IBM stake in 2011.”
“Shares, down 15 percent over the past month, jumped 3 percent Monday,” Funk reports. “Buffett is known for investing in comparatively boring companies when he understands the industry well, such as Geico insurance, Wells Fargo, Coca-Cola, American Express and See’s Candy. Buffett avoids investing in areas outside his expertise. Whenever Buffett is asked about technology investments, he usually explains his position in terms of candy and soda. Buffett says he thinks 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.”
“Berkshire revealed the new Apple investment Monday in a filing with the Securities and Exchange Commission,” Funk reports. “But the filing didn’t disclose who made the Apple investment. Besides Buffett, Berkshire has two other investment managers, who each handle about $9 billion. Buffett has said that his investments tend to be the larger ones in the portfolio. He says investments of less than $1 billion are likely to be the work of Ted Weschler or Todd Combs.”
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MacDailyNews Take: A more important vote of confidence is difficult to imagine.
Warren Buffett’s Berkshire Hathaway takes new $1 billion stake in Apple – May 16, 2016