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Change Your Life! |
Billionaire Warren Buffett gains in market drop |
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News |
April 19, 2000
OMAHA, Nebraska, APR 18 (AP) - Billionaire investor Warren Buffett has been redeemed - at least for now.
The chairman of Berkshire Hathaway Inc., who shuns high technology companies because he says he cannot forecast their future, came under criticism last year when his holding company's stock tumbled 20 percent even as technology stocks claimed record gains.
But technology stocks have been losing favor: Last week, one of Wall Street's worst ever, Buffett was one of a few billionaires who made money on the market.
Billionaires like Microsoft chairman Bill Gates and Amazon.com chairman Jeffrey Bezos lost plenty last week, but Buffett gained $ 570 million on his 474,998 Berkshire shares at the end of trading Friday.
Buffett apologized in his company's 1999 annual report for its low returns that year, but said the company had not lost faith in its long-term investments in such low-tech businesses as furniture, candy, shoes, publishing and insurance.
"Our problem - which we can't solve by studying up - is that we have no insights into which participants in the tech field possess a truly durable competitive advantage," Buffett said in the report.
Berkshire Hathaway stock - which has holdings in companies including Coca Cola, Dairy Queen, auto insurer Geico, and the Washington Post - dropped from a high of $ 78,600 in May to a low of $ 40,800 in March, but has since recovered.
Buffett made few million dollars more Monday as the market rebounded, with both the Dow Jones industrial average and the Nasdaq composite index registering gains of more than 200 points.
Berkshire Hathaway Class A shares rose $ 700, or 1 percent, to finish at $ 58,700 in trading on the New York Stock Exchange.
Alex Paris Jr. with the Chicago-based investment broker Barrington Research - which, like Buffett, prefers to invest in brick-and-mortar companies - said that a market drop fueled by overvalued technology stocks has been a long time coming.
Investors like Buffett have been vindicated, Paris said.
"It feels good for a change," Paris said. "For so long, the attitude seems to have been that valuation doesn't matter. Well, yes, it does matter.
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