You can’t teach a billionaire new tricks, one would think. Or, can you? Apparently, in the case of the frugal living investor slash philanthropist Warren Buffett, a company that has the uncanny ability to retain their corporate clientele is what the Oracle of Omaha is looking for these days, which happened to land an 11 billion stock investment into IBM from him, which calculates into a 5.5% stake for Berkshire Hathaway. And if 64 million shares aren’t enough to make potential high-profile tech stocks salivate, perhaps the fact that other value stocks from tech giants such as Siemens and Broadcom could see a little love from Buffett. Silicon Valley, here he comes!
Oracle (of Omaha) To The Rescue
Computer systems design companies has seen a rather good increase this year, all things considered; yet, with so many tech stocks with low value on the market due to decreased demand from consumers, this heavy investment could send the smaller companies around Silicon Valley reeling, widening the growth gap for the larger stocks on the playing field. Since the systems design field, with a plethora of companies within it, has plenty of room for growth, it seems imminent that concentration on retention of the large customers at a high rate is what will attract many more Buffett’s who want to follow suit with an investment into the future of our technology.
Not normally a tech-friendly investor due to the incrementally unstable trends of the tech stock genre, many believe that this latest warming yet confusing act of investing could signify that technology has finally come of age to the point infusing money into further development is a worthy move. Along with the International Business Machines stock shopping, Berkshire also picked up Intel, DirecTV, CVS as well as Visa. Sure, not all are tech-related, but looking at the technological ties between them, it is plain to see why one would choose such a portfolio to put their ducats into. However, there are some companies that may surprise you that Buffett will more than likely avoid permanently like a bad habit.
Buffet Says No Go
First, there are the Microsoft possibilities that could be endless. Sure, sounds like a great investment on the surface; however, that’s a no-go because of the friendship Gates and the Oracle have. Then, perhaps there would be an interest in Google or Yahoo. Nice, but still too new for the investment genius to consider. Companies that could possibly be a great buy would be, again, companies that retain a large corporate following, such as HP and Cisco, the king of routers. Not only do these companies have a history of clean financial stability, but they have a little time-tested age behind their business and have proven to remain near the top of the tech world through thick and thin (HP gobbling up Compaq in 2002). If I had the freedom to choose a stock and buy endless shares within the vortex of technology, the latter two would be my personal top choice.
But how about other massive players in the Silicon Valley area? You have the Symantec Corporation, a leading software company offering protection for your computer against unwanted friends. Then, perhaps NVidia, producers of excellent graphics cards. Will they and the other blooming warriors from the Bay Area suffer major setbacks without any funding? Probably not, considering the bigger entities are soon going to chomp the little guys up and add them to their slew of offerings, which will fortify their own stocks. The rest will be left to either form mergers and restructure their IPO’s (if they even went public yet) or simply pack up and cut their losses. Many more micro-Buffetts are willing to invest in stability, but never uncertainty from fledgling companies.