It’s no secret that Warren Buffet makes the investment decisions for Berkshire Hathaway (NYSE: BRK.B). Although, he has said that the company will be in good hands after he’s gone – which is good for shareholders to know, since he’s getting on a bit in years – Buffet is still the one guiding investment strategy. Since he’s done such a great job, obviously no one is complaining.
Still, the man does have blind spots, and one of them is the technology sector. Buffet has made it perfectly clear, on more than one occasion, that he will not invest in businesses whose technology is beyond his comprehension. And that means pretty much all of them.
Okay, there are notable exceptions. Berkshire Hathaway bought shares in IBM several years ago, though it had been a blue chip stock for literally decades, and took a chance on Apple last year. But that’s it.
Although Berkshire Hathaway shareholders have profited wildly from their leader’s undisputed acumen, they have also missed out on amazing runs by Microsoft, Intel, Google, Facebook, Amazon and more. However, Buffet has just decided to brave the risk of one of the most unproven niches of the tech industry: wearables.
So what, exactly, made Buffet take the plunge? Apparently, he understands the tech.
Richline Group, owned by Berkshire Hathaway, has a focus on jewelry. The company will be launching a line in the spring called Elegant Lifestyle Accessories (ELA). ELA will feature smart jewelry which wearers can set to notify them with custom vibration and color alerts when they get texts or calls from certain people.
Buffet considers the line more of a jewelry product than a tech product, and says,
“Jewelry is a centuries-old business that isn’t going anywhere, so it’s a safe bet. With the addition of technology, we’re simply updating something everyone knows and loves to better fit our modern age.”
So, there you have it. Buffett has spoken. Now it’s just a matter of seeing whether or not he was right…again.