Tags: Sosnoff | Buffett | IBM | tech

Money Manager Sosnoff: Buffett Has Lost His Touch

By    |   Thursday, 20 February 2014 01:53 PM

Warren Buffett, legendary CEO of Berkshire Hathaway, isn't what he used to be, says Martin Sosnoff, CEO of Atalanta Sosnoff Capital.

Buffett is a "lost tycoon" he writes in an article for Forbes. "I'm bothered by Buffett's final morphing into his staid money management construct, saddling himself with underperforming big capitalization properties like ExxonMobil, IBM and Wal-Mart."

ExxonMobil is having trouble keeping up its oil reserves and doing so costs twice as much as it did five years ago, Sosnoff explains.

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IBM is wise to exit hardware and focus on cloud computing and storage software, he contends. "But, it's late. Amazon now is No. 1, and even Microsoft is a distant second."

As for IBM's services business, it's difficult to achieve more than 5 percent annual growth, given the intense price competition for large, long-term contracts, Sosnoff argues.

He says he doesn't "buy" Buffett's explanation in the past that he avoids technology stocks because he doesn't understand them. "After all, he owns old technology as in IBM," Sosnoff writes.

"I can understand Buffett's reluctance to consider properties like Twitter . . . on a valuation basis, but not Facebook . . . probably selling under 20 times next year's EBITDA to enterprise value."

Dan Burrows of InvestorPlace sees Buffett's strategy somewhat differently.

"Whatever bumps and bruises certain blue chips might suffer in the shorter term, it's a huge vote of confidence when Warren Buffett holds on to them quarter after quarter, year after year," he writes.

Editor’s Note: Secret ‘250% Calendar’ Exposed — Free Video

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Warren Buffett, legendary CEO of Berkshire Hathaway, isn't what he used to be, says Martin Sosnoff, CEO of Atalanta Sosnoff Capital.
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2014-53-20
Thursday, 20 February 2014 01:53 PM
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