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Well, the quote by Warren Buffet is IMHO great: >“Larry Ellison has done a fantastic job with Oracle,’’ Buffett said Monday in a CNBC interview. “I’ve followed

by jaclaz 8y ago

Well, the quote by Warren Buffet is IMHO great: >“Larry Ellison has done a fantastic job with Oracle,’’ Buffett said Monday in a CNBC interview. “I’ve followed from the standpoint of reading about it, but I felt like I didn’t understand the business. Particularly after my experience with IBM, I don’t think I understand exactly where the cloud is going.’’

ausbah 8y ago
“Never invest in a business you cannot understand.”
- mromanuk 8y ago
  or "never invest in a business you consider bs"
  - tabtab 8y ago
    Which ones are not BS? Something tells me a fully honest company would not survive, just like honest politicians don't survive.
- tabtab 8y ago
  Buffett is a numbers guy: he likes to see the numbers coming in and numbers going out. He follows the insurance market closely because insurance is about probabilities: numbers. Technology is more about standards, integration, trade-off balancing, and dealing with change; things that are hard to put numbers on. His firm got burned by IBM, so he's extra jittery dealing with "big tech" now. IBM created this program to better track and maximize revenue by cranking up revenue incentives for middle managers. It looked good on paper: fine-tune the reporting of and increase incentives. But their customers began to feel squeezed and milked. You can often gain short-term revenue by skimping on customer service, and eventually customers revolted, damaging IBM's cred.
  - basch 8y ago
    marketing, naming, bundling, network effects, sla's. theres a lot more to tech than tech.
- sizzzzlerz 8y ago
  Buffet used to be very averse to investing in technology companies because of that very reason. He has evidently educated himself since he is very heavy into both IBM and Apple, less so into Red Hat and Sirius. His investment into Oracle and subsequent dumping is very unique in the annals of BH since his other tenet has always been to buy something and then hold on to it. To sell such a large investment so quickly screams that he found something he was very uncomfortable with in Oracle.
sametmax 8y ago
When Buffet thinks "this is BS, I won't touch it", he says politely "I don't understand". He's been repeating it for 40 years. He doesn't want to fight. He doesn't care about being right in the eyes of others. I stole this line 10 years ago to decline the invitation "oh, you are a programmer, can you take a look at my computer ?". I don't understand Windows so I can't, because I use Linux. Declaring yourself incompetent is a fantastic social cheat code.
- travisjungroth 8y ago
  “I don’t understand” also carries extra weight when the first half of your nickname is “The Oracle”.
  - sametmax 8y ago
    That's the thing though. It only works in your favor if your popularity is not low in a group. Like a joke, people will laught depending on the delivery as well as the person delivering.
  - em3rgent0rdr 8y ago
    Well he is smart to know to maintain his high success rate by admitting when he doesn't understand something and knowing to avoid things he doesn't understand. Awareness of ignorance is wisdom.
- whatok 8y ago
  That idea really doesn't square with the initial investment made. What changed QoQ?
  - dharmon 8y ago
    He's been super interested in the future of "the cloud" for some time now[1]. He is also a voracious reader. Most likely after he purchased his shares he continued reading and thinking about the state of things and where they are headed. He read something that made him question his investment thesis and re-think things that he was previously confident in. Most people, if they continue reading or thinking at all, will just look for things that confirm their previous decision. It's a good lesson to look for things that disprove what you think you know. [1] I think he likes the cloud because as opposed to most tech, there are tangible assets involved and significant capital outlays. Combined with the nature of platform lock-in, this keeps out newcomers.

by jaclaz 8y ago

ausbah 8y ago

“Never invest in a business you cannot understand.”

mromanuk 8y ago
or "never invest in a business you consider bs"
- tabtab 8y ago
  Which ones are not BS? Something tells me a fully honest company would not survive, just like honest politicians don't survive.
tabtab 8y ago
Buffett is a numbers guy: he likes to see the numbers coming in and numbers going out. He follows the insurance market closely because insurance is about probabilities: numbers. Technology is more about standards, integration, trade-off balancing, and dealing with change; things that are hard to put numbers on. His firm got burned by IBM, so he's extra jittery dealing with "big tech" now. IBM created this program to better track and maximize revenue by cranking up revenue incentives for middle managers. It looked good on paper: fine-tune the reporting of and increase incentives. But their customers began to feel squeezed and milked. You can often gain short-term revenue by skimping on customer service, and eventually customers revolted, damaging IBM's cred.
- basch 8y ago
  marketing, naming, bundling, network effects, sla's. theres a lot more to tech than tech.
sizzzzlerz 8y ago
Buffet used to be very averse to investing in technology companies because of that very reason. He has evidently educated himself since he is very heavy into both IBM and Apple, less so into Red Hat and Sirius. His investment into Oracle and subsequent dumping is very unique in the annals of BH since his other tenet has always been to buy something and then hold on to it. To sell such a large investment so quickly screams that he found something he was very uncomfortable with in Oracle.

sametmax 8y ago

When Buffet thinks "this is BS, I won't touch it", he says politely "I don't understand". He's been repeating it for 40 years. He doesn't want to fight. He doesn't care about being right in the eyes of others. I stole this line 10 years ago to decline the invitation "oh, you are a programmer, can you take a look at my computer ?". I don't understand Windows so I can't, because I use Linux. Declaring yourself incompetent is a fantastic social cheat code.

travisjungroth 8y ago
“I don’t understand” also carries extra weight when the first half of your nickname is “The Oracle”.
- sametmax 8y ago
  That's the thing though. It only works in your favor if your popularity is not low in a group. Like a joke, people will laught depending on the delivery as well as the person delivering.
- em3rgent0rdr 8y ago
  Well he is smart to know to maintain his high success rate by admitting when he doesn't understand something and knowing to avoid things he doesn't understand. Awareness of ignorance is wisdom.
whatok 8y ago
That idea really doesn't square with the initial investment made. What changed QoQ?
- dharmon 8y ago
  He's been super interested in the future of "the cloud" for some time now[1]. He is also a voracious reader. Most likely after he purchased his shares he continued reading and thinking about the state of things and where they are headed. He read something that made him question his investment thesis and re-think things that he was previously confident in. Most people, if they continue reading or thinking at all, will just look for things that confirm their previous decision. It's a good lesson to look for things that disprove what you think you know. [1] I think he likes the cloud because as opposed to most tech, there are tangible assets involved and significant capital outlays. Combined with the nature of platform lock-in, this keeps out newcomers.