<<Microsoft, IMO, is not a Buffett stock because it has yet to show me it can evolve. It is very possible to me that a new operating system can evolve to destroy a lot of what Microsoft has worked for. Sure, they have some nice online properties, but those are losing money hand over fist. I think it can be argued that Intel, Apple, and Oracle and even Compaq have shown a resilience over time that Microsoft, Dell, and Cisco have not. I wonder if you can see where I'm coming from.>>
Interesting argument. Never thought of it like that, but you're probably right. The magic about true Buffett stocks is that THEY DON'T HAVE TO EVOLVE - what Buffett looks for are businesses where what is important does not change. Wrigley and Coke are the quintessential examples of that. Disney might be a little different, but one could argue that they've evolved too much and forgotten their core game. Washington Post is facing a new "operating system" and there is probably more risk there than there has been for 50 years. Philip Morris was once one until the big risk caught up with them. And this circles right back to the never resolved debate as to whether a tech stock can ever be as rock-solid as Coke or Wrigley. I don't think any can, but I can also only think of two non-tech stocks which are completely untouchable. (and before we get into the Coke has gone down debate - obviously you've got to buy them at the right price - neither is there yet and I own neither, but both are getting closer)
In the next bear market, Buffett will buy Wrigley - the whole thing if the family will sell - for $50 a share. Two weeks later the price of gum will go up a nickel and profits will double. Put that on your 2001 calendar. |
