1998: Will Berkshire consider investing in technology companies in the future?

AUDIENCE MEMBER: Good morning, Mr. Munger and Mr. Buffett. My name is Prakash Puram (PH) from Minneapolis.

There seem to be great values in the technology sector that meet most of your criteria and philosophy in investing, with the exception of the simplicity criterion. Names like IBM, Microsoft, HP, Intel.

Would you ever consider investing in companies in this sector in the future?

WARREN BUFFETT: Well, the answer is no, and it’s probably pretty unfortunate, because I’ve been an admirer of Andy Grove and Bill Gates and, you know, I wish I had translated that admiration into backing it up with money.

But the truth is, I don’t know where Microsoft or Intel — I don’t know what that world will look like in 10 years.

And I don’t want to play in a game where I think the other guys have got an advantage over me, and —

I could spend all my time thinking about technology for the next year and I wouldn’t be the hundredth or the thousandth or the 10,000th smartest guy in the country in looking at those businesses.

So that is a seven or eight foot bar that I can’t clear. There are people that can clear it, but I can’t clear it. And no matter how I train, I can’t clear it.

So, the fact that there will be a lot of money made by somebody doesn’t bother me, really. And I mean there may be a lot of money made by somebody in cocoa beans, but I don’t know anything about them.

And there are a whole lot of areas I don’t know anything about. So, you know, more power to them.

And I think it would be a very valid criticism if Charlie and I — if it were possible that Charlie and I, by spending a year working on it, could become well enough informed so that our judgment would be better than other people’s, but that wouldn’t happen. And it would be a waste of time.

It’s much better for us to swing at the easy pitches.

Charlie?

CHARLIE MUNGER: Whatever you think you know about technology, I think I know less. (Laughter)

WARREN BUFFETT: That’s probably about true, incidentally. Charlie has a little more of — he understands some things in the physical world a lot better than I do.