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Warren Buffett favors Coca-Cola over Apple

Warren Buffett said he’ll most likely prolong his aversion to electronics makers such as Apple Inc. due to their business prospects being harder to predict than companies such as Coca-Cola Co. “We held very few in the past and...
 Warren Buffett favors Coca-Cola over Apple
 
 

Warren Buffett said he’ll most likely prolong his aversion to electronics makers such as Apple Inc. due to their business prospects being harder to predict than companies such as Coca-Cola Co.

“We held very few in the past and we’re likely to hold very few in the future,” said the billionaire chairman of Berkshire Hathaway Inc., referring to electronics makers. “[Coca-Cola] is very easy for me to come to a conclusion as to what it will look like economically in five or 10 years, and it’s not easy for me to come to a conclusion about Apple.”

These comments made by the world’s third-richest man come on the heels of the world’s fifth largest earthquake as electronics makers worldwide scramble to assess damages from the March 11 earthquake and tsunami in Japan that killed more than 18,000 people so far. Japanese companies such as Toshiba Corp., supply 20 percent of the world’s technology products, including 40 percent of components and 19 percent of chips, according to CLSA Ltd. estimates.

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“If I owned Japanese stocks, I would certainly not be selling them because of the events of the past 10 days or so,” Buffett said. “Something out of the blue like this, an extraordinary event, really creates a buying opportunity.”

According to regulatory data compiled by Bloomberg, Apple, the Cupertino, California-based maker of the iPhone and iPad, overtook Microsoft Corp. as the largest technology company by market value last year. The 8.6 percent stake in Coca-Cola is Omaha, Nebraska-based Berkshire Hathaway’s biggest equity holding, followed by Wells Fargo & Co. and American Express Co.

“Even though Apple may have the most wonderful future in the world, I’m not capable of bringing any drink to that particular party and evaluating that future,” Buffett said. “I simply look at businesses where I think I have some understanding of what they might look like in five or 10 years.”


 



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