Legendary Investor Warren Buffett Prepares Berkshire For New Economy

Legendary Investor Warren Buffett Prepares Berkshire For New Economy

As Warren Buffett turns 91, he’s taking steps to ensure that Berkshire Hathaway will be well positioned to thrive in a technology-driven economy, lays out an article on CNBC. The “Oracle of Omaha” has traditionally stuck to companies such as railroads, insurance, and retail, missing out on the explosive growth in the Amazons of the world. But now Buffett is signaling that he’s open to straying from that tradition in order to a new, tech-driven economy.

Thanks to its massive stake in Apple, Berkshire’s exposure to technology stocks has grown to 45% of its equity portfolio. And though Buffett once mocked initial public offerings and pre-IPO investments, Berkshire has dipped into both, making a significant shift of its investment portfolio towards the new economy.

Buffett still maintains a disciplined value approach, which many analysts see as groundwork for his eventual successor. “He doesn’t want to hamstring the next guy running the show by acquiring something that maybe isn’t going to help him,” says Greggory Warren, Berkshire analyst at Morningstar. And instead of deal-making, Berkshire’s focus has been returning capital to its shareholders. The company bought $24.7 billion of its own stock last year, which allowed its class B stock to quickly rebound. The article concludes with another quote from Warren: “He understands his legacy is going to be appraised not only on what he did the first 50 years but what he did the last five he’s in charge.”