∞ Warren Buffett wary of Apple

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Billionaire Warren Buffett said he has an aversion to technology companies like Apple, instead favoring companies like Coca-Cola.

[ad#Google Adsense 300x250 in story]Buffet said of Coca-Cola that it’s “very easy for me to come to a conclusion as to what it will look like economically in five or 10 years, and it’s not easy for me to come to a conclusion about Apple,” according to Bloomberg.

Buffet’s largest holdings besides Coke are Wells Fargo and American Express.

In the past decade, Apple has released some of the most sought after products in the consumer electronics market. The iPod, iPhone, iPad, several Mac models and a variety of software applications that have changed the way consumers look at computing. However, Apple’s past success still doesn’t change Buffet’s mind.

“Even though Apple may have the most wonderful future in the world, I’m not capable of bringing any drink to that particular party and evaluating that future,” said Buffett. “I simply look at businesses where I think I have some understanding of what they might look like in five or 10 years.”


  • http://www.gamerant.com/ alex_sebenski

    Headline: “Old man doesn’t understand technology.”

    • Steven Fisher

      Yeah. But what’s the problem with that? He’s not cutting into them, criticizing them. He’s just investing his money elsewhere, in markets he DOES understand.

      Not sure what the story is here, other than Bloomberg trying to stir up controversy.

  • http://mangochut.net/ mangochutney

    That’s the point Mr. Buffett.

    Apple doesn’t want you to get them, Apple doesn’t want anybody to understand their strategy.
    Their being unpredictable is what keeps them where they are and what allows them to outgrow and outpace all their compeittors.

    If I were anybody on Apple’s C-level, I’d have a big grin on my face for the rest of the week and throw my entire department a round of free drinks after work. Warren Buffett admitted defeat.

  • Martyn

    So unlike John Sculley, his preference is to sell sugar water for the rest of his life instead of changing the world.

  • Andrew

    He can’t see his data because Bill Gates’ head is in the way.

  • Player_16

    Kinda strange. He breaks one of his own rules by investing into something he knows very little about: BYD Co. Ltd. But, there could be a reason IF you look carefully…
    http://www.autonews.com/apps/pbcs.dll/article?AID=/20110313/GLOBAL/110319964/1131

  • http://twitter.com/Stevehammond Steve Hammond

    He said the same about google a few years ago. So it is following his state of mind.

    But the guy in billionaire, I’m not, he may understand a few things I don’t.

    • Steven Fisher

      Yeah, I’d trade him my set of ignorance for his any day of the week.

  • http://twitter.com/Moeskido Moeskido

    Don’t write off Buffett with such a simplistic dismissal, folks. The man has a damn long track record. He’s smart about the things he understands, and even smarter in staying away from things he doesn’t.

    Buffet’s success is built on business models he can learn about and relate to his own experience. Notice he’s not criticizing Apple; he’s explaining his own shortcomings, which is something he and his partner Charlie Munger publicly talk about a lot. Even Steve Jobs has echoed that point of view on occasion, describing businesses that Apple doesn’t know well enough to want to get into.

    How many of us are willing to be that publicly candid about ourselves?

    • http://mangochut.net/ mangochutney

      SSteve said something similar.
      Those are good points and something I clearly didn’t think of while commenting.

      I admit, cautiousness is no sign of indecisiveness or a weakness — especially in the case of the dot-com bubble burst and probably Apple, too — but I believe it is really a compliment to Apple and companies like it:
      Limiting this to Apple, as we’re at The Loop, it shows that Apple’s strategists are top-notch and that Buffett isn’t comfortable with quickly evolving markets like the ones Apple moves in — navigating the Great River of the Material Continuum ;)

      Buffett and Apple really aren’t that different: Both are great at analysing markets and act only when they believe they’re going to be successful.

  • Ian

    He’s keeping true to what works for him. His clients can’t ask for more than that and his track record speaks for itself.

  • Peter Cohen

    I haven’t been able to take Warren Buffet seriously since he made that “Cheeseburger In Paradise” song.

    • http://www.theuniversalsteve.com Anonymous

      No, you’ve got the wrong guy. Warren Buffet wrote “Warewolves of London.”

  • http://ComicsPundit.com/ Shawn L.

    Big investing lesson to take away from this is : If you don’t understand it. Don’t invest in it.

  • http://www.theuniversalsteve.com Anonymous

    Don’t forget that during the dot-com bubble, Buffet said the same thing about all dot-com companies. He didn’t see why they were being valued so high so he stayed out of that segment. And look who was unscathed when the bubble burst.

    If you read his annual shareholder letters, you’ll see that he often admits he’s not very smart. But he’s smart enough to stay out of stocks that don’t fit his investment strategy. I was pretty happy about that back when I owned Berkshire Hathaway shares. It’s an approach that has worked well for him for a long time. He likes to be able to map out companies’ futures. Apple is very much against anyone mapping out their future. So they are incompatible. No worries–there are plenty of other people to buy Apple stock.

    Very few people make money betting against Buffet. But buying AAPL isn’t betting against him–it’s just playing on a different table.

  • Ankit_soni

    Doesn’t he own microsoft though? And he said he doesn’t like derivatives bt he buys Goldman Sachs?

    • HooHaw

      No Buffett does not own Microsoft stocks or Intel stocks or Cisco stocks or Oracle stocks or IBM stocks. As for Goldman Sachs, part of the deal was a $5 billion investment in non-voting preferred stock that pays out 10% annually.

  • Larry

    If everybody only invested in things they understand, many millions of people would have avoided buying overpriced Technology Stocks in 2000 and overpriced Real Estate in 2008. Now who do you think is out of touch?

  • Larry

    Warren’s partner, Charlie Munger claims that he has only had 3 good ideas in his whole life. Thing is that those ideas made him billions of dollars. You can make as much by not doing anything stupid as you can by doing things right. Valuable lesson here.

  • Player_16

    Kinda strange. He says he has an aversion to technology (“I do not invest in to anything I do not understand”) but he invested in a electric car company, BYD Co. Ltd., in China and at the moment, with rumours of it not doing too well. But it is early days yet.