Warren Buffett’s Biggest Mistake: Google (GOOG, BRK.A)

Frank
July 12, 2017
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Even Oracles make mistakes. With a net worth of $74 billion, it’s hard to think Warren Buffett has ever made an investing mistake, especially one as significant as not investing in tech giant Google Inc (GOOG).

Speaking to shareholder’s at Berkshire Hathaway’s (BRK.A) annual meeting Saturday, the Oracle of Omaha admitted missing out on investing in Google may be his biggest mistake. “I had plenty of ways to ask questions or anything of the sort, and educate myself. But I blew it,” Buffett said.

Despite never being big on tech stocks (Buffett has said in the past tech stocks aren’t his forte as he doesn’t fully understand how to value them), Buffett made a recent splash with his investment in Apple Inc. (AAPL) – one that looks to be paying off. In May of 2016, regulatory filings showed Buffett made a $1 billion investment in Apple and has since pushed more chips in, tripling his stake in February. Apple’s stock price has been on a relentless march higher since mid-2016. (See also: Buffett and Icahn’s Take on Apple)

However, his oversight of Google still haunts him. “Just imagine having something every time to just hit a click, you know, a cash register rung somewhere out in California. So, it was and is an extraordinary business and it has some aspects of a natural monopoly. I mean, it’s very easy for me when I go to a computer,” Buffett told CNBC on Monday.

“I used to have to mail away to federal agencies or go down to the public library, and now I can get it in 10 seconds. So it’s a hugely valuable device, which the other guy pays for. The user of the computer doesn’t. The answer is we missed it.”

It turns out Google wasn’t Buffett’s only mistake, admitting he failed to realize the potential of Amazon Inc. (AMZN) and the brilliance of founder Jeff Bezos. “I was too dumb to realize. I did not think Bezos could succeed on the scale he has,” Buffett said.

Google, which was founded five days after Buffett’s 68th birthday made an all-time high on Monday, trading above $960 a share, as the tech rally of 2017 continues. (See also: FANG Short Interest Up 32% in 2016 So Far)

Frank read it here

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