06-29-2015, 11:26 AM
Too often people take what WB does or says as religious mantra.
If one lived by his exact mantra, you would never invest in AAPL. But the reason Buffett was against tech stocks was bc it was not in his circle of competence. He freely admits that. Just as I am not going to invest in foreign insurance companies bc I simply don't understand them as well as say NKE or HSY.
I'm very comfortable for example investing in QCOM, which I think is a good value right now, b/c I'm a programmer/tech oriented. On the other hand, another fairly valued company, AFL, is a business that I am not strong at evaluating, which means I have less confidence in my purchase decision, which can lead to making rash moves.
It's really about psychology. You are more likely to buy a stock you can understand when it's the right time to buy, and bc you are confident in it, you will weather the rough patches.
If one lived by his exact mantra, you would never invest in AAPL. But the reason Buffett was against tech stocks was bc it was not in his circle of competence. He freely admits that. Just as I am not going to invest in foreign insurance companies bc I simply don't understand them as well as say NKE or HSY.
I'm very comfortable for example investing in QCOM, which I think is a good value right now, b/c I'm a programmer/tech oriented. On the other hand, another fairly valued company, AFL, is a business that I am not strong at evaluating, which means I have less confidence in my purchase decision, which can lead to making rash moves.
It's really about psychology. You are more likely to buy a stock you can understand when it's the right time to buy, and bc you are confident in it, you will weather the rough patches.