Whether it is something as futuristic as the metaverse, or something as mundane as ride-sharing, Warren Buffett is quick to point out that just because an industry is on the cutting-edge, and will be transformational to the world, doesn’t mean it will be a good investment. As Buffett famously said “If a capitalist had been present at Kitty Hawk back in the early 1900s, he should have shot Orville Wright. He would have saved his progeny money.”
“There’s a lot of difference between making money and spotting a wonderful industry. You know, the two most important industries in the first half of this century in the United States, in the world, probably were the auto industry and the airplane industry,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “Here you had these two discoveries, both in the first decade, essentially in the first decade of the century. And if you’d foreseen, in 1905 or thereabouts, what the auto would do to the world, let alone this country, or what the airplane would do, you might have thought that it was a great way to get rich. But very, very few people got rich by being, by riding the back of that auto industry. And probably even fewer got rich by participating in the airline industry over that time.”
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© 2023 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.