I think that this is a good time to recall one of Buffett's many shrewd observations: namely, that investors should work within their circle of competence. To paraphrase WB, the exact size and scope of the circle isn't crucial, but knowing its limits is crucial.
WB, for instance, understands retail, insurance, newspaper publishing, and a few other industries very, very well. He'd be crazy to venture into another industry which he doesn't "understand" (I use the quotation marks because WB's definition of understanding is quite rigid--for instance, his understanding of technology markets is actually quite high, compared to most investors).
People on this thread have chosen, for the most part, to focus on a few high tech industries: optics, wireless, storage chief among them. I can't speak for the rest of them, but I haven't the time, energy or ability to venture outside these industries (pretend that I don't own GMST... I often do).
Are there lots of great buys outside of tech? Sure. Retail must have some. Hell, BRK.A/B is pretty awesome. But in all honesty, if you're looking for healthy long-term returns, technology is a pretty great sector to focus on. And the people on this thread have been pretty good at finding the specific high-tech regions that should provide tremendous growth in the ensuing years.
WB also notes that investors should think of investing like a baseball game where no strikes are called. It's OK to let lots of hittable balls (excellent investments) go by untouched. What's important is that when you do swing, you swing at a gimme. This requires us to stay within our circle of competence.
prosperous investing,
ardethan@EVERYONE?HowAboutAmericanAirlines.com |
