Warren Buffett is right to bet big on 5G: former Cisco CEO

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There really is only way to read it: Warren Buffett is clearly bullish on the long-term impact of 5G in America.

The seventh wealthiest person in the world started new positions in Verizon, Chevron, Marsh & McLennan and EW Scripps in the fourth quarter of 2020, according to a new 13-F filing with the SEC on Tuesday evening. And of the latest positions added to Berkshire's portfolio, Verizon is one of the larger bets. Buffett scooped up 147 million Verizon shares for $8.62 billion. (Verizon is the parent company of Yahoo Finance.)

The new investment in Verizon is in addition to Buffett upping his stake in rival T-Mobile. Buffett now owns 5.2 million shares of T-Mobile valued at $706 million. The Oracle of Omaha initiated his position in T-Mobile in the third quarter of 2020, disclosing 2.4 million shares valued at $276 million.

Both recent positions come as the two telecom giants continue to duke it out for high-speed 5G positioning among smartphone subscribers. While Buffett cut his long-time holding in Apple by 6% in the fourth quarter, he still owns a whopping 887 million shares just as the tech king ramps up distribution of its first 5G iPhones.

Former Cisco CEO John Chambers — who has had a keen eye through the years for spotting money-making tech — says Buffett is on the mark with the likely bet on the future impact of 5G technology.

"5G is part of the bigger movement of the internet of things and digitization as everything moves to edge [computing]," Chambers, who now leads his VC firm JC2 Ventures, explained on Yahoo Finance Live.

5G global network connection. Polygon connect dot and line shaped of network business. Vector Illustration
5G global network connection. Polygon connect dot and line shaped of network business. Vector Illustration Credit: Getty (royyimzy via Getty Images)

Chambers added, "I think the market is underestimating where the true growth is going to come from. When I look at the market transitions, they are around 5G, internet of everything, 500 million devices getting connected, access occurring at the edge, even energy at the edge in a sustainable and environmentally friendly way. Those are the big bets that I would make."

Buffett seem to be doing just that, with good reason.

"Fast, intelligent internet connectivity enabled by 5G technology is expected to create approximately $3.6 trillion in economic output and 22.3 million jobs by 2035 in the global 5G value chain alone,"wrote researchers at the World Economic Forum. "This will translate into global economic value across industries of $13.2 trillion, with manufacturing representing over a third of that output; information and communications, wholesale and retail, public services and construction will account for another third combined."

Get more insight on Buffett’s investing do’s and don’ts here.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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