The buffettisms are to buy stocks that are:
- For a great price
- In an industry that you are capable of understanding
- Have a great competitive advantage
- Have great management
Buffett, for the past few decades, has made it publically known that he does not understand tech, and has little to no desire to do so. Goog and amzn don’t have the kinds of tangible products in which he is familiar with investing. If you take a look at BRK price in the dotcom bubble, you’ll see that they pretty much flatlined with the NDX was ballooning and popping.
Aapl on the other hand makes sense as a buffett play because:
- PE is down under 19. Even though the market cap is massive, they bring in equally huge profits
- Buffett understands consumer products, which is what he is buying into with an aapl stake. Iphones Ipads and Macs are tangible items that he can understand the user experience around.
- Aapls fanbase is ruthless in their support of buying their products, even when aapl does things that many would consider questionable. Additionally, by buying aapl service plans and getting entrenched in itunes, users get stuck in using their products indefinitely.
- Aapl has huge amounts of cash reserves and is not overleveraging themselves like many others this late in the bull run. I don’t know much about their management to further comment.
Disclaimer: Consult your financial professional before making any investment decision.