Why Warren Buffett isn't biting on Apple

Warren E. Buffett probably will hang on to his aversion to electronics makers such as Apple Inc. Ticker:(AAPL) because its business prospects are harder to predict than companies such as Coca-Cola Co. Ticker:(KO). “We held very few in the past and we're likely to hold very few in the future,” the billionaire chairman of Berkshire Hathaway Inc. said last week in Daegu, South Korea, referring to electronics makers. Coca-Cola is “very easy for me to come to a conclusion as to what it will look like economically in five or 10 years, and it's not easy for me to come to a conclusion about Apple,” Mr. Buffett said. The comments by the world's third-richest person came as electronics makers worldwide scrambled to assess the damage from the March 11 earthquake and tsunami in Japan that at press time police officials estimated killed more than 18,000 people. Japanese companies, including Toshiba Corp. Ticker:(TOSBF), supply 20% of the world's technology products, including 40% of components and 19% of chips, according to CLSA Ltd. estimates. Mr. Buffett, 80, arrived in Daegu to attend a ceremony for a new factory being built by TaeguTec Ltd., a South Korean company partly owned by his Iscar Metalworking Cos. unit that makes cutting tools. He canceled his scheduled trip to Japan last week after the earthquake. Still, Mr. Buffett said that the drop in Japanese stocks following the earthquake presents a buying opportunity.

BUY, DON'T SELL, IN JAPAN

“If I owned Japanese stocks, I would certainly not be selling them because of the events of the past 10 days or so,” he said. “Something out of the blue like this, an extraordinary event, really creates a buying opportunity.” Apple, the maker of the iPhone and iPad, last year overtook Micro-soft Corp. Ticker:(MSFT) as the largest tech company by market value. The 8.6% stake in Coca-Cola is Berkshire Hathaway's biggest equity holding, followed by Wells Fargo & Co. Ticker:(WFC) and American Express Co. Ticker:(AXP), according to regulatory data compiled by Bloomberg. “Even though Apple may have the most wonderful future in the world, I'm not capable of bringing any drink to that particular party and evaluating that future,” Mr. Buffett said. “I simply look at businesses where I think I have some understanding of what they might look like in five or 10 years.”