Warren Buffett is one of the most successful investors in the world. With a net worth of around $158 billion, he has a reputation for making smart investment choices. However, there are certain industries that Buffett tends to avoid investing in.
One area that Buffett is wary of is new technology. He has expressed skepticism about cryptocurrencies like Bitcoin, calling it “a mirage.” Despite this, his company, Berkshire Hathaway, did invest in a Brazilian digital bank that offers a cryptocurrency platform. Generally, however, Buffett prefers to invest in companies with greater certainty and lower risk.
Gold is another industry that doesn’t impress Buffett. He sees too much guesswork involved in predicting its future value compared to other commodities that can provide immediate income. “No one is an investor in gold: there are only speculators in the metal,” he wrote.
While Berkshire Hathaway briefly invested in gold mining in 2020, it was short-lived.
Buffett’s cautious investment strategy
The airline industry has also proven tricky for Buffett.
In the past, Berkshire purchased $10 billion in stocks of major airlines. However, they sold these stakes just four years later in 2020 due to the pandemic’s impact. Buffett’s wariness of airlines goes back to 1989, when a planned investment in US Airways didn’t pan out as expected due to the company’s high operational costs.
Energy is another sector where Buffett has stumbled. Six years ago, he invested in ConocoPhillips when crude oil prices were extremely high, believing they would continue to rise. Instead, prices dropped and Berkshire Hathaway lost billions.
This demonstrated the risks associated with timing energy investments incorrectly. As Buffett himself has said, “When investing, pessimism is your friend, euphoria the enemy.” While he doesn’t entirely avoid trendy industries, he prioritizes certainty over excitement in his investment choices. His experience shows the importance of caution and thorough evaluation when deciding where to put your money.
