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Renowned value investor Guy Spier doesn’t own Nvidia — and he isn’t planning to. “Price matters, and it’s not always the horse that is the fastest that is best for the person to bet on,” he told CNBC Pro Talks last week. Spier says Nvidia is too expensive right now, and he would avoid it. “In investing, we don’t want to be in the very, very best because there’s no room for growth in a certain way all the low-hanging fruit has been picked. In the case of Nvidia, we have a nosebleed valuation. And for me that says stay far away,” he said. Spier, who calls himself an “ardent disciple” of legendary investor Warren Buffett, manages the $350 million Aquamarine Fund. Spier closely follows Buffett’s investing principles, and the Aquamarine Fund is inspired by the original 1950s Buffett Partnership era . Shares of Nvidia have skyrocketed 190% this year on the optimism surrounding artificial intelligence. “Nvidia might be excellent, but at this price, I don’t think it’s excellent. And buyer beware,” Spier added. The only chip stock Spier owns Spier has only one chip stock in his portfolio: Micron , one of the world’s largest producers of memory chips. He says it’s a consolidating industry with “really just four competitors.” “[Capital expenditure] and technological development have slowed sufficiently that I think that the companies will find a way to have a stable if not growing profit pool from the increasing demand from chips,” Spier said. He added that it’s very likely that competition in memory chips will be reduced. “In memory chips, it’s going to be a stable profit pool, providing something very important for all computing, which is memory. And that profit pool will be shared by the existing players, which may still consolidate even farther,” Spier said. Spier’s fund, which was started in 1997, has logged an annualized return of 9% since then, according to Aquamarine. That’s higher than the S & P 500 ′s 8.2%, the MSCI World ‘s 6.9%, and the FTSE 100 ′s 3.6%.
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