The market is dominated nowadays by emerging technology companies, the market value of which cannot be determined by the good old Buffett/Benjamin Graham model.
Investors who ignore the transformation of our economy away from the industrial era and toward the computer age are investing in the past, not the future.
Bottom line: this new market would look like a crapshoot to an old market guy like Buffett. But investing in the future is a must (however dangerous).
The Buffett/Graham model still works because it minimizes the risk of investing in an emerging technology company that goes out of business. As Buffett himself once said: "If I'm not comfortable holding a stock for ten years, I don't want to own it for ten minutes." There's a lot of wisdom to that.
One of the smartest investors I know was an ardent believer in the future of e-commerce as far back as the late 1990s. And yet he never had any dot-com stocks in his private equity fund. I once asked him why this was the case, and his answer was a great one. He said: "I don't know which of these companies is going to thrive and which are going to be out of business in five years. So I invest in the companies that will do well in a growing e-commerce world regardless of what happens with the individual players."
His top picks for his "e-commerce portfolio" were FedEx and UPS.