Warren Buffett turns 91, prepares Berkshire Hathaway for a new

Before turning 91 on Monday, Warren Buffett has been taking steps to make sure that Berkshire Hathaway — and his eventual successor — will be better positioned to benefit from a technology-driven economy.

The conglomerate’s operating business is a patchwork of companies focused on the traditional backbone of the economy, from railroads, to batteries, insurance, home furnishing and retail. Because of the old economy orientation, Berkshire has missed out on the explosive growth seen in the Amazons of the world over the years. But the “Oracle of Omaha” is showing his openness to investments that stray from Berkshire’s old economy core to adapt to the new world.

Berkshire’s exposure to technology stocks has grown to 45% of its portfolio thanks to its massive stake in Apple, according to InsiderScore.com. Its Apple investment, first bought in 2016, has ballooned to over $120 billion to become its biggest equity holding by far. Ten years ago, Berkshire’s top equity holdings showed very little tech exposure other than IBM.

To bet on growth, Berkshire has dipped into initial public offerings and pre-IPO investments, something the legendary investor once mocked. It’s widely speculated that Buffett’s investment lieutenants Todd Combs and Ted Weschler orchestrated these bets that break with Berkshire tradition.

“There has been a pretty significant shift in the investment portfolio. Now it’s really geared towards the new economy,” said James Shanahan, Berkshire analyst at Edward Jones. “He has given Todd Combs and Ted Weschler a lot more flexibility and opportunity to get their fingerprints on the business.”

Berkshire invested in Brazilian fintech StoneCo within days of its IPO in 2018, and the stake has grown to more than $700 million thanks to a doubling in share price since the market debut. During that year, Berkshire also bought a stake in India’s largest digital payments start-up, Paytm, which has filed for an IPO.

In the third quarter of 2020, the conglomerate bought $250 million worth of Snowflake stock at the IPO price and an additional 4.04 million shares from another stockholder at the debut price. In June 2021, Berkshire made a $500 million pre-IPO investment in the parent company of Nubank, a digital bank based in Brazil.

Buffett, the man who pioneered buy-and-hold investing, had been vocal about his distaste for buying companies around their market debut. Buffett previously compared buying hyped-up IPOs with trying to win lotteries, arguing they are not a sound basis for an investment. The last major IPO that Buffett bought before the recent spree was the Ford debut back in 1956.

“The equity portfolio today is more dynamic than it was 10 or 15 years ago with the Todds at the helm,”…