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Buffett’s Not Buying It: Stocks That Wouldn’t Interest the Oracle

Dan Berman
Hot Stock Minute
Buffett’s Not Buying It: Stocks That Wouldn’t Interest the Oracle

Want to make mounds of money by taking cues from an investing genius? One way is to make sure you don't do anything he wouldn't. In the case of Warren Buffett and Berkshire Hathaway that includes staying away from many stocks that suddenly seem to be grabbing headlines. Buffett was wise enough to avoid the tech bubble. At the time he criticized dot.com companies describing them as "entities designed more with an eye to making money off investors, rather than for them." Even now his portfolio is largely Dow components and other blue chips with IBM being his only major tech holding.

The Motley Fool has compiled a list of companies which they believe would never get a second look from the man known as the Oracle of Omaha. Yahoo! Finance Senior Columnist Mike Santoli adds his own insight to the report saying, "Buffett wants to see very long term competition advantages that other companies can't come and attack very easily." Santoli also reminds us that Buffett owns only a handful of stocks and tries never to sell them.

1. Apple (AAPL): Despite its mountain of cash, Buffett probably wouldn't like the company's time horizon. The Motley Fool's columnist David Hanson says Buffett wants something that spans well beyond 20-years.

2.) Netflix (NFLX): Though Buffett would be likely to like CEO Reed Hastings, The Motley Fool believes Buffett searches for companies that are generating lots of cash. Prices for outside content are also likely to rise.

3.) Baidu (BIDU): The company has been referred to as China's Google. But even with the country's booming population, columnist David Hanson thinks there are too many uncertainties, particularly in the shift to mobile.

4.) Whole Foods Market (WFM): This company may be as expensive as its products. Shares have been trading at roughly 34-times earnings. Buffett tends to be more of a bargain hunter.

5.) Herbalife (HLF): The Motley Fool says Buffett doesn't like to mix it up with other gazillionaires. The very public battles over this company between activist investors Carl Icahn and Bill Ackman are enough to keep Buffett at arm's length.