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- The 5 70,570 million bet on Berkshire Hathaway’s Snowflake shows that CEO Werner Buffett has full confidence in his two portfolio managers, Todd Kombs and Ted Wessler, a fund manager says.
- “Buffett has given his lieutenants full agency,” Jack Taylor, CEO of Farnam Street Investments and co-founder of the “Value: After Hours” podcast, told Business Insider.
- “A high-profile tech IPO is a sure confirmation that its actions match its words,” he added.
- Taylor’s comments elicit a reaction from Paul Lantizis, who said the Snowflake investment proved to Buffett “full confidence in Todd and Ted” in an interview this week.
- Visit Business Insider’s homepage for more stories.
Berkshire Hathaway’s plans to invest about 70 570 million in Snowflake’s IPO show that CEO Warren Buffett has full confidence in his deputies, Farnam Street Investments CEO and “Value: Our Time” Cost Jack Taylor told Inside this week.
“Buffett has given his lieutenants full agency,” Taylor said, referring to Berkshire’s portfolio managers, Todd Combs and Ted Wessler. “A high-profile tech IPO is a confirmation that his actions matched his words.”
He added, “Any suspicion that this guy gets to invest has been dispelled, but they want to.”
read more: A major fund manager explains the rationale behind Berkshire Hathaway’s 5 70,570 million investment in Snowflake’s IPO – and why it’s a good sign for shareholders.
Taylor’s comments echoed remarks made by Paul Lentzis, founder and chairman of Lentzis Asset Management, in an interview with Business Insider this week.
Snowflakeshire’s claim on Snowflake – despite Buffett’s public listing, loss-making tech companies and historical historical disregard for big valuations – shows that he “has full confidence in Todd and Ted,” Luntzis said.
Buffett has stressed in the past that Count Mbs and Wesler, who managed about $ 14 billion in the last count, are free to make their own investment decisions.
“They don’t need to check with me before they buy or sell anything,” he said in a 2017 Yahoo Finance interview. “This is entirely their decision.”
read more: ‘The worst crash of our lives’: A market expert says stocks are screaming towards a setup like a great recession in early 2021 – and warns that an 80% to 90% dip is not out of the question.
Finding the price
Snowflake wants a valuation of 24 billion, 78 times its revenue last year. However, Berkshire’s investment in the cloud-data platform does not betray Buffett’s signature value-for-money approach, Taylor said.
‘My personal opinion‘ value ’can come in many flavors, he said. “Just because something isn’t statistically cheap doesn’t mean it can’t be applied incorrectly.”
A similar argument was made by Paul’s son and vice president of his fund, Zachary Lontiz. “Growth is a component of value,” he said, adding that businesses could be downgraded if the market underestimated its future revenue growth.
read more: “Buy these 30 stocks that offer the best deals for strong sales and earnings growth in the precious market,” Credit Suisse said.
Buffett made a similar appearance at a Berkshire shareholder meeting last year.
“All investment is worth investing,” he said. “You’re making some money to get more money later.”
“Exactly the same calculation goes into it, whether you’re buying some bank at 70% of the book value, or you’re buying Amazon at a very high multiple of reported earnings.”
read more: Buy these 16 tech stocks that are crumbling due to the epidemic and are now targeted for explosive growth in the coming months, says Stafel.
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