The Motley Fool

Warren Buffett is ditching this sector. Should ASX investors follow?

One of the hardest decisions any investor has to make is when to sell an investment. If that investment has been a success in the past, it can be even harder to cut the cord.

But sometimes, not selling an investment can be a mistake – and a costly one at that. If a company is on the wrong side of history, its profits can dry up before you can even ask ‘what happened’?

I’m sure there were a lot of people excited about Nokia stock when they looked at the world around them back in 2006 and saw how everyone had a brick in their pocket. But that was one year before the Apple iPhone was released, and one year before Nokia was consigned to the ‘has been’ bin. If one had ‘stayed the course’ with their Nokia shares, I’m sure it would still be a regret today.

Warren Buffett – one of the greatest investors of all time – has just given us an insight into where he sees the world going. According to our Foolish colleagues across the Pacific at Fool.com, Buffett has just said goodbye to one of his (formerly) favourite businesses – newspapers.

That’s right, Buffett’s company Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has reportedly sold the last of its newspaper businesses for US$140 million. Buffett loves newspapers and continues to read several daily. He also used to love investing in them, but no more it seems.

It’s no secret that newspapers have been one of the biggest victims of the internet age. The days when a newspaper could command a virtual monopoly on classified advertising are long-gone. Many have struggled or shut up shop in the face of the new world of online advertising. It appears Buffett has bowed to the inevitable and jumped from the sinking ship – leaving someone else to fight over any doors left on the ocean.

What does this mean for ASX investors?

The newspaper industry has already evolved significantly over the last decade or two. Former publishing giant Fairfax media is now a part of Nine Entertainment Co Holdings Ltd (ASX: NEC).

News Corp (ASX: NWS) is still going, but is worth less than half of what it was way back in 2000.  It also owns stakes in online advertisers like REA Group Limited (ASX: REA).

Seven West Media Ltd (ASX: SWM) is also in the newspaper game with its flagship masthead The West Australian. However, this company, again, also owns a variety of other assets including (of course) Channel 7.

Of all the media groups on the ASX, I think Nine offers the best deal. Its Stan streaming service has proved very successful, as has its 9Now platform.

Foolish takeaway

All major publicly traded newspaper companies in Australia have already percolated into other media groups. Thus, you won’t really have to worry about having too much sole exposure to this struggling industry.

It’s clear where the future of media lies – and it’s not with print. If the 89-year old Buffett is reading the writing on the wall, I think everyone else should pay attention.

For some blue-chips that we Fools don;t think are going anywhere, check out Our Top 3 Blue Chip Shares To Buy Now

You’re invited! For a limited time, The Motley Fool Australia is giving away a fantastic FREE report detailing our 3 TOP BLUE CHIP SHARES to buy and own for now and beyond!.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping grossed-up dividend of over 6%! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!

Simply CLICK HERE FOR YOUR FREE REPORT!

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short March 2020 $225 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares) and Nine Entertainment Co. Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!