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Buffett to Extend Aversion Toward Apple, Electronics Makers

Berkshire Hathaway Inc. CEO Warren Buffett
Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. Photographer: SeongJoon Cho/Bloomberg

March 21 (Bloomberg) -- Warren Buffett said he’ll probably prolong his aversion to electronics makers such as Apple Inc. because their business prospects are harder to predict than companies such as Coca-Cola Co.

“We held very few in the past and we’re likely to hold very few in the future,” the billionaire chairman of Berkshire Hathaway Inc. said in Daegu, South Korea, today, referring to electronics makers. Coca-Cola, based in Atlanta, is “very easy for me to come to a conclusion as to what it will look like economically in five or 10 years, and it’s not easy for me to come to a conclusion about Apple,” he said.

The comments by the world’s third-richest man come as electronics makers worldwide scramble to assess damages from the March 11 earthquake and tsunami in Japan that killed more than 8,000 people. Japanese companies, including Toshiba Corp., supply 20 percent of the world’s technology products, including 40 percent of components and 19 percent of chips, according to CLSA Ltd. estimates.

Buffett, 80, arrived in Daegu yesterday to attend a ceremony for a new factory being built by TaeguTec Ltd., a South Korean company partly owned by his Iscar Metalworking Cos. unit that makes cutting tools. He canceled his scheduled trip to Japan this week after the earthquake.

Still, Buffett said the drop in Japanese stocks following the earthquake presents a buying opportunity.

Buying Opportunity

“If I owned Japanese stocks, I would certainly not be selling them because of the events of the past 10 days or so,” Buffett said. “Something out of the blue like this, an extraordinary event, really creates a buying opportunity.”

Apple, the Cupertino, California-based maker of the iPhone and iPad, last year overtook Microsoft Corp. as the largest technology company by market value. The 8.6 percent stake in Coca-Cola is Omaha, Nebraska-based Berkshire Hathaway’s biggest equity holding, followed by Wells Fargo & Co. and American Express Co., according to regulatory data compiled by Bloomberg.

“Even though Apple may have the most wonderful future in the world, I’m not capable of bringing any drink to that particular party and evaluating that future,” Buffett said. “I simply look at businesses where I think I have some understanding of what they might look like in five or 10 years.”

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net; Brett Miller at bmiller30@bloomberg.net

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