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Earlier quoted context omitted.
Valuations dropped enough for it to be a sensible buy. Buffet stated before that he does not understand why tech valuations are so high based on the fundamentals.
And he's quite right. Apple might be the exception because of their extensive cash reserves. But if you look at Facebook or Twitter, it is hard to tell why they're selling for that amount. I myself avoid index funds which over-invest in tech because I believe we're in a bubble.
Earlier quoted context omitted.
Valuations dropped enough for it to be a sensible buy. Buffet stated before that he does not understand why tech valuations are so high based on the fundamentals.
And he's quite right. Apple might be the exception because of their extensive cash reserves. But if you look at Facebook or Twitter, it is hard to tell why they're selling for that amount. I myself avoid index funds which over-invest in tech because I believe we're in a bubble.
Also interestingly: Bain Capital is in the running. In the past, Yahoo has used Bain Capital as consultants to reorg, restructure, etc. It would almost seem like a conflict of interest, since they are acutely familiar with the innards of Yahoo.
Edit: as /u/mcmoose75 mentions below, "Bain Capital" and "Bain Consulting" (the one I was thinking of) are two separate entities.
Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
Probably valuations dropped low enough that yahoo can be valued as a classic media company instead of a tech company. What generally scares Buffet from tech is that the price of tech stocks is greatly inflated to reflect expectations of future growth. Buffet is very skeptical of inflated expectations of future growth. But I do not think there is any great expectations of future growth in yahoo. In fact many analysts…
If the value implied by the stock price is zero or negative, then even buying the company and selling off the office furniture nets you a tidy profit.
More realistically, it's very likely that if a company has negative value -- ie, that someone would pay you to take it off their hands -- then it is severely undervalued.
Wonder if he'll bring a chunk of Yahoo to Detroit?
Earlier quoted context omitted.
Probably valuations dropped low enough that yahoo can be valued as a classic media company instead of a tech company. What generally scares Buffet from tech is that the price of tech stocks is greatly inflated to reflect expectations of future growth. Buffet is very skeptical of inflated expectations of future growth. But I do not think there is any great expectations of future growth in yahoo. In fact many analysts…
> In fact many analysts say that if you strip out the valuable asian assets, the value implied by the market for Yahoo's US business is about zero or even negative. If the value implied by the stock price is zero or negative, then even buying the company and selling off the office furniture nets you a tidy profit. More realistically, it's very likely that if a company has negative value -- ie, that someone would pay…
Earlier quoted context omitted.
And he's quite right. Apple might be the exception because of their extensive cash reserves. But if you look at Facebook or Twitter, it is hard to tell why they're selling for that amount. I myself avoid index funds which over-invest in tech because I believe we're in a bubble.
How you could compare Facebook to Twitter is beyond me.
As a shareholder, I welcome the competition. :) Also interestingly: Bain Capital is in the running. In the past, Yahoo has used Bain Capital as consultants to reorg, restructure, etc. It would almost seem like a conflict of interest, since they are acutely familiar with the innards of Yahoo. Edit: as /u/mcmoose75 mentions below, "Bain Capital" and "Bain Consulting" (the one I was thinking of) are two separate entitie…
Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.