Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
The 'Apple' of Buffett's Eye - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  
The Equitymaster Research Digest

The 'Apple' of Buffett's Eye
Aug 26, 2016

Warren Buffett famously said he wasn't comfortable investing in tech companies because he did not understand them. The idea was to stay within his circle of competence.

However, a look at Berkshire Hathaway's portfolio reveals that Buffett has changed his stance on tech companies. The addition of IBM and Apple are testimony to that.

But why was Buffett in the early days so averse to investing in tech companies? And why is he okay with investing in Apple now?

Buffett, as we know, likes stable companies with strong competitive advantages, consistent earnings, and predictable cash flows. In that sense, tech companies do not really fit the bill. These companies have to constantly innovate to stay ahead of the curve, and it is very hard to predict the next disruptive technology.

For every company that stands out (your Apples, Googles, Facebooks), there are more than enough duds. The dotcom bubble was a classic example of the crazy lengths investors are willing to go for tech companies.

To Read the Full Story, Subscribe or Sign In

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms