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Warren Buffett's ZDNet screenshot taken from CNBC's Squark Box interview
Warren Buffett has just published his annual letter to shareholders (PDF) and Berkshire Hathaway's 13F, offering market watchers a glimpse into his vision of the technology markets. It turns out that he had a brief flirtation with Oracle, but that he kept all his Apple stock, despite "another member" of Berkshire Hathaway who sold a few million.
Buffett's widely publicized investment strategy is to buy stocks of companies that he understands and keep them for the long term. It turns out that he broke both rules with a $ 2.1 billion stake in Oracle, which mysteriously appeared in the third quarter report and had disappeared by the time the numbers of the fourth quarter were unveiled.
The topic was covered in a two-hour television interview with CNBC's Becky Quick. Buffett explained that "after starting to buy [Oracle]I felt that I still did not understand the job. In fact, I changed my mind to understand, not to evaluate. Oracle is a great company, but I do not think, especially after my experience with IBM, that I do not understand exactly where the cloud is going. "
Buffett also confirmed that he was selling no Apple stock and that he would have bought more if they had been cheaper. However, "another board member" has sold about three million of his seven million. It's the investment manager who started buying Apple shares for Berkshire Hathaway before Buffett joined the group.
Buffett explained that this employee "is working with a limited amount of money – about $ 13 billion – so if he wants to buy something, he has to sell something." If I want to buy something, j & # Have money to do it ".
Apple is Berkshire's biggest stake. Buffett currently owns more than $ 44 billion worth of Apple stock. It therefore holds 5.4% of the company. Buffett said he expects this figure to increase as Apple buys back its own shares, which will give Berkshire a larger share of the company. However, he said that he would avoid having more than 10%.
Buffett bought Apple stock at a wide price range, but the average was about $ 141. He does not find them particularly attractive at $ 175.
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Although Berkshire Hathaway is famous for avoiding tech stocks (this is one of the reasons why sales or major purchases are making headlines), the company has also bought four million shares of Red Hat worth $ 733 million at the end of the quarter. It will be a profitable investment if IBM's takeover of Red Hat goes as planned.
The $ 34 billion takeover is a big bet for IBM: it will have to borrow up to $ 20 billion to supplement it. Berkshire, on the other hand, has about $ 100 billion in cash and could easily make a larger acquisition. Buffett says his problem is that he finds nothing to buy.
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