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Buffett, Munger: We missed on Google + Video: Why Buffett sold IBM shares

May, 8 2017, 6:10 AM

OMAHA, Neb. - Listening to Warren Buffett never gets old to the thousands of Berkshire Hathaway shareholders who filled an arena Saturday to listen to the billionaire investor at the company's annual meeting.

But they did hear some doubts about Buffett's and partner Charlie Munger's wisdom on tech stocks.

More than 30,000 people came to Omaha to hear Buffett and Berkshire Vice Chairman Munger talk. The 86-year-old CEO and his 93-year-old partner have been leading the conglomerate for more than five decades, but the crowd is always listening for new tidbits of wisdom. Buffett is known for his candor and plain speaking.

The meeting came a day after Buffett told CNBC that he had sold one third of the firm's shares in IBM. The news sent IBM shares down more than 2 percent.

Berkshire's top two executives acknowledged Saturday that they missed out on investing in Google years ago, but they expressed pride in the company they built through acquisitions and said they believe it will thrive for decades to come.

"In retrospect, I think we were smart enough to figure out Google early, and we didn't," Munger said.

Buffett and Munger avoided technology investments for most of their careers because they said it was too hard to figure out which companies will win. Berkshire does now own 133 million Apple shares, but it just sold off one-third of its 81 million IBM shares because Buffett misjudged that firm.

In recent years, Buffett has ventured a bit into tech investing but with mixed results. He said Friday that Berkshire recently sold off one-third of its 81 million IBM shares because the investment hasn't performed as well as he expected.

Berkshire holds about 133 million Apple shares, but Buffett says he looks at that more as a consumer products company instead of a technology company.

Buffett also continues looking for major acquisitions for Berkshire Hathaway. Buffett told shareholders Saturday that Berkshire could do a very large deal because it has more than $90 billion cash on hand.

Buffett says he likes to keep at least $20 billion to $25 billion on hand for emergencies or any large insurance claims, but he's actively looking for a big deal.

Currently, Buffett believes he can find a good use for Berkshire's cash, so the company doesn't pay dividends and rarely repurchases its stock.

Buffett says the board would look at both options if it ever decided he could generate good returns by investing the money.





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