Buffett confronts search for next big thing

https://www.bloomberg.com/news/articles/2017-05-07/buffett-confronts-search-for-next-big-thing-after-missed-chances

Underlying the festivities at Warren Buffett’s annual bash for Berkshire Hathaway Inc. shareholders over the weekend was a sobering fact: Finding the next big thing is hard.

The Berkshire chief executive officer spoke at length Saturday about his failure to pounce on opportunities in tech stocks, the challenge of lining up large deals, and his frustration with a cash pile that’s approaching $100 billion.

“We shouldn’t use your money that way for long periods,” Buffett said of the cash during his meeting in Omaha, Nebraska. “The question is, ‘Are we going to be able to deploy it?’ I would say that history is on our side, but it’d be more fun if the phone would ring.”

It was a notably downbeat moment for the billionaire, who’s spent the past five decades snapping up businesses and stocks. His investments transformed Berkshire from a struggling textile maker into a conglomerate with insurance companies, manufacturers, retailers, utilities and a railroad, as well as an equity portfolio valued at $135 billion.

With thousands of adoring fans watching live (and many more streaming video online), Buffett and Vice Chairman Charles Munger took questions for five hours from the audience, analysts and journalists on topics from investing to public policy.

Buffett, 86, said the Republican health plan that cleared the House of Representatives was sure to help the wealthy, and the billionaire reiterated his view that society needs to do more to help people he called “roadkill” because they get left behind by capitalism. The Berkshire CEO also took another swing at hedge funds.

Most of all, the billionaire expounded on his company and investments. Buffett said Wells Fargo & Co. mishandled its response to a fake-account scandal. And he predicted that Berkshire could make “a fair amount” on its recent airline investments if carriers keep a stronger grip on fares, while acknowledging “it is no cinch.”

For years, Buffett and Munger have told investors that the company’s size would be an anchor dragging down performance, only to defy their own predictions. But some missteps are now underscoring their warning.

Buffett recently scaled back an investment in International Business Machines Corp. and said that he was too optimistic about the company’s prospects in 2011. Berkshire has been piling into Apple Inc. in its latest technology bet.

The moves prompted a broader discussion about whether Berkshire had dropped the ball in a sector that’s come to dominate the ranks of the world’s largest businesses. For most of his career, Buffett avoided technology stocks, saying the companies were outside his expertise. On Saturday, however, he issued a mea culpa for being too late to spot their potential.

Companies like Apple, Amazon.com Inc. and Google parent Alphabet Inc.don’t require the large sums of capital that were required to sustain the giant industrial firms of an earlier era, Buffett said.

In hindsight, he said he could have been quicker to spot Google’s potential. Berkshire’s auto insurer Geico was an early customer of the search-engine firm, and its founders consulted him around the time they were taking the company public.

“I had plenty of ways to ask questions, or anything of the sort, and educate myself,” Buffett said. “But I blew it.”

Buffett said his analysis on Apple differed from IBM, in part because the iPhone maker is more of a consumer-products company. Munger said the Apple investment was a good sign.

“Either you’ve gone crazy or you’re learning,” the vice chairman told Buffett. “I prefer the learning explanation.”

Steve Wallman, a money manager based in Middleton, Wisconsin, who’s been attending the meetings for more than three decades, said the remarks illustrated how Buffett and Munger are “fallible, thoughtful, and aware of how much the world has changed.”

They went through “a litany of trends they missed, mistakes they made,” Wallman said. “I’ve never seen them exhibit so much vulnerability.”

———-

“The Berkshire chief executive officer spoke at length Saturday about his failure to pounce on opportunities in tech stocks, the challenge of lining up large deals, and his frustration with a cash pile that’s approaching $100 billion.”

frustrated eh?..give me some of that frustration..

“discussion about whether Berkshire had dropped the ball in a sector that’s come to dominate the ranks of the world’s largest businesses. For most of his career, Buffett avoided technology stocks, saying the companies were outside his expertise. On Saturday, however, he issued a mea culpa for being too late to spot their potential.”

i am sure he will find the new bubble..like going to mars or something else within the green religion..

401

Advertisements

~ by seeker401 on May 11, 2017.

2 Responses to “Buffett confronts search for next big thing”

  1. Reblogged this on EbolaInfo and commented:
    “Buffett, 86, …the billionaire reiterated his view that society needs to do more to help people he called “roadkill” because they get left behind by capitalism. The Berkshire CEO also took another swing at hedge funds.”
    Let that sink in: ROADKILL!

  2. Reblogged this on World Peace Forum.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: