Monday, June 13, 2011

Buffett on Microsoft

In this recent Reuters interview, Warren Buffett gave the following answer when asked about Microsoft (MSFT):

I regard myself as precluded from either personally or having Berkshire buy Microsoft because if something good happened the following week people would think Bill had told me. So I just see no way that we can ever buy Microsoft and be sure that we won't look like we had some kind of inside information or something. So it's off limits. It did look pretty cheap.

A somewhat surprising answer after years of just saying he avoids tech for the most part due to the nature of tech businesses themselves. Tech business that have an economic moat eventually have that moat threatened by some technology shift or new competition.

Suddenly, what seemed like a fantastic business is not. Buffett clearly has historically liked durable businesses residing in industry with little change going on. Obviously, that's rarely going to be found in technology.

The above seems practically like an endorsement of Microsoft's stock coming from him.


Long position in MSFT

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