For self-coined Value Investors, there is a palpable stigma towards one particular business industry: technology. This was never more exemplified than during the tech boom of the new millennium, when the NASDAQ composite peaked at over 5,000 (today, the index slogs along at the low 2,000s, a mere 40% of what it used to be a decade ago). All the new million- and billionaires were affiliated with technology, be it entrepreneurs like Mark Cuban or stock pundits like Henry Blodget. And over there in the dunces corner, growing a paltry 0.5% in 1999 compared to the Nazz's 85%, was Warren E. Buffett, sitting on his $36 billion wealth comprised of boring country names like Coca-Cola, Washington Post, and Wells Fargo, while being sandwiched at #2 by Microsoft kids (Gates, #1, $90B; Allen, #3, $30B; Ballmer, #4, $20B) on the Forbes 400.
I promise, this is not yet another W.E.B. post. At least, not intentionally.
Despite being, by all accounts, best buds with Bill Gates, Buffett staunchly refused to invest one red cent of Berkshire's in technology stocks (although he has admitted buying 100 shares of MSFT in his personal account just to keep track of it). The rationale was from the same scripture: buy what you know, stay within your circle of competence. Buffett's humble spin on it was he did not understand technology, him being a dinosaur from the Depression era, and could not predict where the MSFTs and CSCOs and INTCs would be 10, 15, 20 years from now. The unspoken truth was, if Buffett, capitalism's foremost genius, couldn't figure it out, no one could.
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