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Buffett says value drew him to tech holdings

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CIOL Bureau
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REDMOND: - Billionaire investor Warren Buffett, famed for spurning technology stocks during the boom of the 1990s, said on Wednesday he still does not understand tech companies enough to buy their shares but knows a cheap bond when he sees one.

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Buffett, who compared his computer skills to those of a chimpanzee, was speaking to investors at a conference for top business executives hosted by software titan Microsoft Corp. He was asked how tech holdings have entered his portfolio recently.

In a document filed with the Securities and Exchange Commission last week, Buffet's Berkshire Hathaway Inc. listed 1.6 million WilTel Communications shares and 879,000 Level 3 Communications shares among its $28 billion in stock investments.

Berkshire also invested profitably in the 10 per cent senior notes that online retail giant Amazon.com Inc. is redeeming this month.

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"Well, I try to stick with things I understand. Just take Amazon. I mean, I can understand a company that has made it in the consumer field," Buffett said. "I don't understand it well enough to evaluate it, but the bonds were extraordinarily cheap

a year, a year-and-a-half-ago, and it was very clear to me that they would not only survive, but thrive."

Berkshire's WilTel and Level 3 Communications stock holdings reflect the company's exercise of convertible bonds.

"So, in all cases, I have not felt confident enough about understanding the business to place a valuation on the equity. But I have felt confident enough to buy the bonds," Buffett said.

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