Buffett sold $900.0 million worth of Walmart stock lately, but that doesn’t mean he’s gone soft on retail. He has shown great respect for Amazon.com, Inc. (NASDAQ:AMZN), which raises the question…
It’s an open secret that Buffet thinks highly of Amazon CEO Jeff Bezos. Unlike AMZN stock bears, many of whom think Amazon stock is a bubble waiting to burst, Buffett understands the company’s endgame. He sees what makes Amazon so special.
While it would be strange to see Buffett embrace a tech stock, it wouldn’t be unprecedented. He famously invested in International Business Machines Corp. (NYSE:IBM), arguing that it was more of a service company than a tech one. That was his way of justifying the investment.
This aversion to tech stocks comes from Buffett’s self awareness. He doesn’t invest in things he can’t understand. You won’t find him investing in semiconductor or solar stocks because those are too far out of his wheelhouse. He simply doesn’t know how to sort the wheat from the chaff in those sectors, so there’s no point in him trying.
To be clear, Walmart’s revenue is still inching upward. The problem is that consumers are spending more of their money online, not in physical stores. This puts WMT stock on the wrong end of history.
I don’t know whether he has evolved, or if tech stocks have matured. But the fact is that Warren Buffett—the Warren Buffett—is expressing strong bullish sentiments about Amazon stock.
He has dumped $900.0 million worth of WMT stock, and for good reason. There’s no sense in betting on a lame horse. Walmart stock is going to be hampered by industry trends going forward, so pulling out now was a smart move for the “Oracle of Omaha.” If only he had gotten out sooner, he could have saved a little more money.
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