Warren Buffett has never fallen in love with the tech sector and one of the reasons may be sheer speed. Buffett seems to distrust it, from the fly-by-night valuations of bubbly enterprises like eToys and–potentially–Snapchat to the flash trading that dominates Wall Street activity. Buffett’s value investing strategy thinks long term, and favors big markets and steady movers. Sure, that means Buffett can’t cash in on Facebook-like rockets, but he also doesn’t get burned by standing too close to those that fail to launch.
Buffett is famous for saying that it takes “20 years to build a reputation and five minutes to lose it.” But in the Internet age, it only takes “five nanoseconds” now to ruin a rep, with the speed of the Internet magnifying everything. Years ago, Buffett told his colleagues at Salomon Brothers, “Lose money for the firm and I will be understanding; lose a shred of reputation for the firm and I will be ruthless.” Buffett says never do anything you wouldn’t want to see on the front page. But is reputation what it used to be? There are 7 zillion front pages now–where every move is criticized–and Buffett’s advice about maintaining a reputation can, in the Internet age, paralyze.
