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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 conti

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.

chosenbreed37 8y ago
> 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. If that is the case then I take my hat off to him. I was also wondering why he would be pulling out of something he'd gone in the previous quarter.
whatok 8y ago
Is this speculation or is there a source for his thinking behind this? It's very unlike a good portion of his investments.
- dharmon 8y ago
  From reading his shareholder letters, watching a boatload of his talks and interviews on YouTube, and most importantly trying to re-create his thinking on most of his investments, from his early partnership days up until about IBM. (he is actually quite open about what he likes in a company, even though people think he's being cryptic) For example, he always cites figures such as return on _tangible_ assets in his interviews. He is also obsessed with moats. A large reason for the relative lack of moats in tech is that the barrier to entry is low, and has been dropping for decades. You could whip up a respectable competitor (technology-wise) to most of today's unicorns in well under a year or so with only a little bit of money, but given many years and billions of dollars you couldn't re-create Coca-Cola's distribution network. I am actually curious how you think this is not like his other investments? His investment style has changed for sure, but I would draw two lines, one that he talks about around See's Candy in the 70's. The other I would put about 10-15 years ago, where he started looking at more capital-intensive businesses (like BNSF). Both were gradual shifts, though.
  - whatok 8y ago
    Not talking about the specific investment; just the duration of it.
- dharmon 8y ago
  Haha, sorry. I mis-read your question and went waaaay too involved. :) As a Buffett-head, I can't immediately think of another time when he has turned around on a stock so fast. (not counting partnership days, where he would flip stocks pretty relatively quickly, but only after their full value was realized)

chosenbreed37 8y ago

> 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. If that is the case then I take my hat off to him. I was also wondering why he would be pulling out of something he'd gone in the previous quarter.

whatok 8y ago

Is this speculation or is there a source for his thinking behind this? It's very unlike a good portion of his investments.

dharmon 8y ago
From reading his shareholder letters, watching a boatload of his talks and interviews on YouTube, and most importantly trying to re-create his thinking on most of his investments, from his early partnership days up until about IBM. (he is actually quite open about what he likes in a company, even though people think he's being cryptic) For example, he always cites figures such as return on _tangible_ assets in his interviews. He is also obsessed with moats. A large reason for the relative lack of moats in tech is that the barrier to entry is low, and has been dropping for decades. You could whip up a respectable competitor (technology-wise) to most of today's unicorns in well under a year or so with only a little bit of money, but given many years and billions of dollars you couldn't re-create Coca-Cola's distribution network. I am actually curious how you think this is not like his other investments? His investment style has changed for sure, but I would draw two lines, one that he talks about around See's Candy in the 70's. The other I would put about 10-15 years ago, where he started looking at more capital-intensive businesses (like BNSF). Both were gradual shifts, though.
- whatok 8y ago
  Not talking about the specific investment; just the duration of it.
dharmon 8y ago
Haha, sorry. I mis-read your question and went waaaay too involved. :) As a Buffett-head, I can't immediately think of another time when he has turned around on a stock so fast. (not counting partnership days, where he would flip stocks pretty relatively quickly, but only after their full value was realized)