Subject: Re: Fortune magazine article
Investing
Warren Buffett
Warren Buffett’s blind spot: Did the digital economy leave him behind?
By Adam Seessel
December 30, 2025, 7:30 AM ET"


It's a long article.

" The data lead to an obvious conclusion. For most of the 21st century, Buffett’s record was mediocre—Salieriesque, one might say.
How could this happen? How could a practitioner as driven and imaginative as Warren Buffett produce such genius, then become slightly below average?
These questions are worth pursuing. To understand why Buffett excelled in the 20th century but hasn’t in the 21st will help us understand two things. First, what once made his style of value investing so good. Second, why he faltered, and how value investors must change if we want to excel in the digital age.
I realize that by calling attention to these facts I am violating one of value investing’s cardinal commandments: Thou shalt have no other gods beside Warren Buffett. To those deeply immersed in it, value investing, invented by Ben Graham more than a century ago and passed directly to Buffett, resembles a religious order in many ways. It has many principles and precepts and a long list of dos and don’ts. Our discipline, we believe, distinguishes us from growth investors and momentum investors, whom we look down on as heathens. Unlike them, we think, we aren’t stock jockeys or herd followers. We have rules. We trust that these rules will lead us to outperform. And when we do outperform, we believe it is not a matter of luck, but of patiently applied skill.
This fixity of purpose can lead to stilted and dogmatic thinking. To suggest that Buffett was Mozart in the first three-quarters of his investing career and then Salieri in his last quarter represents a kind of heresy to many in the value church. Fortunately, one of the many salutary things about value investing is that recourse to hard facts is another of its cardinal principles. Value investing has had one major reformation in its 100-year history, a reformation driven by Buffett himself. As Buffett’s two disparate records suggest, if we are to succeed in the digital age, value investors must again evolve.
From ‘cigar butts’ to mass brands
Like Buffett’s overall record, his magisterial performance in the late 20th century is in fact composed of two discrete periods. The first comes from what Chris Begg at East Coast Asset Management calls Buffett’s Value 1.0 days, when he invested in Ben Graham-like “cigar butts,” companies that were cheap not on the merits of their business quality but on their asset liquidation value. Early on, Buffett scored big with such fire-sale investments as Dempster Mill Manufacturing and National American Fire Insurance. His purchase of Berkshire Hathaway, a dying New England textile mill he bought because it was worth more dead than alive, was the very distillation of Ben Graham’s quantitative, defensive style. "
The road not taken
This is all standard, brilliant Buffett stuff—but why, aside from Apple, did he never pull the trigger on these stocks? Over the last twenty years he has been consistently underweight technology stocks, and he forewent hundreds of billions of dollars of value creation in doing so. Having evolved so well from Value 1.0 to 2.0, why did he fail to evolve to Value 3.0? And if he had, would it have made his record better?
The second question is easier to settle than the first. The answer to it is unquestionably yes—Berkshire Hathaway’s stock performance would have been materially better had he followed through on his observations about the superiority of tech’s business models and invested in more of them. When Buffett started buying Apple nearly a decade ago, if he had deployed excess cash (the cash he didn’t need for potential insurance claims) into each of the three mega-tech stocks besides Apple that he knew best—Alphabet, Amazon, and Microsoft—I estimate that Berkshire Hathaway’s market cap would not be the $1 trillion it is now, but at least $1.6 trillion. It’s important to note that this calculation incorporates only the market appreciation of these three stocks. If the market had capitalized Buffett’s “getting tech” and given Berkshire Hathaway’s stock a greater premium as a result, then Berkshire’s gain would have been greater. (Berkshire did buy $6.5 billion worth of Alphabet’s stock earlier this year, though it’s not clear whether it was Buffett or his lieutenants who pulled the trigger on the purchase).
While rough, my estimates are not crazy. Buffett understood all three stocks well. He was close friends with Bill Gates, Microsoft’s founder, who explained the company’s competitive advantages to Buffett many times. At his 2017 annual meeting, Buffett admitted that he “blew it” by not investing in Amazon and Alphabet. Investing a big slug of his cash in these liquid, mega-cap stocks would have solved the “problem of large numbers” that some who seek to rationalize Buffett’s average latter-day record point to. And my estimate assumes that Buffett bought only a single slug of each.
To those who say, “Buffett didn’t miss tech—he had Apple,” I would say two things. First, thank goodness Buffett invested in Apple—can you imagine what his recent record would look like if he hadn’t? Second, I would argue that by the time he invested in Apple the company was acting more like one of his mature, moated consumer products companies than it was a company we would recognize as a “tech company:” ambitious and forward-looking in its investment and R&D spending. When Buffett first bought Apple shares in 2016, it had transformed into a business that had much more in common with Coke and Gillette than it did Amazon or Alphabet.
People forget that two important things happened in the years immediately before Berkshire began to buy Apple. First, Steve Jobs became terminally ill and was replaced in 2011 by Tim Cook. Suddenly, the design visionary was out, and the man whose main achievement was perfecting the company’s supply chain was in. While Jobs brought us the iPod and the iPhone, he also was responsible for the Lisa and the Newton, and he once almost bought Universal Music, a purchase that would have meant handing over cash or stock worth nearly Apple’s entire market capitalization at the time. That wasn’t going to happen under Cook. The quartermaster had replaced the field marshal. Salieri replaced Mozart, and this suited Buffett fine."