Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The Critical Investing Workshop -- Ignore unavailable to you. Want to Upgrade?

To: jambo-bwana who wrote (34928)	3/21/2001 10:02:38 AM
From: thames_sider	Respond to of 35685

Actually I think Buffett might come at it from a different angle. He's valid to hold that he doesn't see fit to invest in technology companies per se, since he can't predict which will even be around ten years from now, still less which will be winners at the end of that period - this, as I understand it, is effectively the aim of G&K, to try and extrapolate to predict likely winners. But - Buffett could argue that the best tech. exposure for long-term comes not in holding the plumbers themselves, but those that make the best use of the plumbing... in other words, companies from the 'old economy' getting the most EVA from leveraging technology. And this would certainly have precluded him from investing in most tech-related plays, soft or hard. I'd say this might be a very useful approach in a low-inflation, slow-growth environment such as we're likely to have fo a few years. there may be genuine profit increments made by cutting costs, especially ones such as labour, energy, or transportation which rank highly and might be constrained or replaced by more advanced technology or better planning/organisation. Supply chain costs might come in - but remember, this means that suppliers must either lose profit or cut their own costs, which again requires measures such as I mentioned. And I don't look for SCM software companies to make huge profits, either... they have to charge measurably less for the total of package+install than the customer is saving!