Warren Buffet, the self-made billionaire who focuses on long-term 'value' when investing in stocks and shares, and who has been dismissive over what he regards as over-valued technology companies, has admitted that he lost out by shunning investments in Amazon, Google and other technology companies - while investing in IBM instead.
However, in addition to IBM, Buffet also made a fortune investing in Apple. His Berkshire Hathaway investment vehicle now holds a stake in Apple that was valued at $19.2bn at the end of March.
Buffet was talking this weekend at the annual general meeting of his investment company, Berkshire Hathaway, in front of 40,000 shareholders.
"We avoided the tech stocks because we felt we had no advantage there, and other people did. And I think it's a good idea not to play where other people are better," said Buffet's business partner Munger.
He added: "But, you know, if you ask me in retrospect, ‘What was our worst mistake in the tech field?' I think we were smart enough to figure out Google."
Early on, Buffet has said, Berkshire Hathaway-owned insurance company Geico purchased advertising from Google and the amount that they were paying at the time - as much as $10 per click, according to reports - should have been a big pointer for Buffet and Munger. "I had plenty of ways to ask questions, or anything of the sort, and educate myself," Buffett said. "But I blew it."
And Google's business model, far from being complex, is actually very simple: it still makes the lion's share of its revenues and profits from dominating online advertising, alongside Facebook.
Apart from Apple, one of the biggest bets that Berkshire Hathaway has made in technology has been in IBM, a stake picked up in 2011 in the belief that it was a well-run company that would offer solid growth. Much of that investment, though, has since been divested as IBM has posted quarter-after-quarter of declining revenues.
Computing's IT Leaders Forum 2017 is coming on 24 May 2017. The theme this year is "Going Digital: Why your most difficult customer is your best friend".
Attendence is free, but strictly limited to IT Leaders. To find out more and to apply for your place, check out the IT Leaders Forum website.
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