Why Warren Buffett Avoids Tech Stocks — And When He Makes Exceptions

Group 1 - Warren Buffett's investment philosophy is centered around the principle of "Buy what you know," leading to his historical avoidance of technology stocks due to a lack of understanding [1][2] - Buffett's avoidance of tech was driven by a desire for predictability in business models, focusing on companies with durable competitive advantages and predictable cash flows [2][4] - Early tech companies lacked the stable characteristics Buffett preferred, as they faced rapid competition and frequent disruptions, making long-term earnings projections unreliable [3][4] Group 2 - Buffett's first significant investment in technology was in IBM in 2011, which he believed had a predictable business model due to its enterprise relationships [5][6] - The investment in IBM ultimately underperformed expectations, serving as a reminder that even established tech companies can encounter unpredictable competitive pressures [6] - Buffett's investment in Apple marked a pivotal change in his perspective on technology, indicating a shift in his investment strategy [7][8]