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Technology Stocks : Investing in Exponential Growth

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From: Paul H. Christiansen5/13/2017 3:49:20 AM
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Buffett: Bonds ‘Terrible’ In Comparison to Stocks

Warren Buffett heaped praise on Amazon.com (ticker: AMZN) CEO Jeff Bezos and bashed Treasury bonds as an investment while Charlie Munger advocated a single-payer health-care system for the U.S in an appearance with Microsoft co-founder Bill Gates on CNBC this morning.

The 86-year-old Buffett, fresh off a long performance at Berkshire Hathaway’s ( BRK.A) (BRK.B) annual meeting Saturday, said Bezos is the rare corporate leader who has succeeded in a big way in two businesses: online retailing and cloud computing. “I was impressed early with Jeff but I didn’t think he could pull off what he did.”

Asked about why he didn’t invest in Amazon.com given his admiration for Bezos, the Berkshire Hathaway CEO replied - “stupidity.” He then mentioned something about the stock’s high valuation, which had kept many smart investors from buying Amazon over the years.

Picking up on a long-running theme, Buffett said that stocks are a much better investment for the long term than Treasury bonds. “Bonds are a terrible choice against stocks and it’s dictated by the mathematics,” he said. 30-year T- bonds yield 3% now while stocks now trade for an average of about 18 times forward earnings. Stocks, as Buffett has said, offer growth, while bonds offer fixed interest rates.

barrons.com

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