Warren Buffett – usually regarded as one of the best investors of all time – hasn’t had a particularly good 2020.

Financially speaking, it’s been a difficult year for Buffett and his famous holding company Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B).

Not only has Berkshire not deployed a cent of its estimated US$137 billion cash pile (even on Berkshire stock buybacks), Buffett also sold Berkshire’s significant positions in 4 US airline companies at a hefty loss.

Adding to that, Berkshire shares have not recovered nearly as much as the broader US markets. For some context, since 23 March, the Dow Jones Industrial Average has risen by just under 35% – whilst Berkshire’s Class A shares have only recovered ~12.6%. The Berkshire Class B shares have fared even more poorly, banking only 11.23%.

According to the Australian Financial Review (AFR), Warren Buffett owns around 16% of Berkshire Hathaway, which means that his net worth has plunged around US$20 billion in 2020 to roughly US$69 billion.

The AFR also noted that Buffett is now worth considerably less than Facebook founder Mark Zuckerberg, whose 13% ownership of Facebook puts him at a net worth of US$86.5 billion.

Should Buffett fans be worried?

Not in my opinion. This is a man who has proved he knows how to take advantage of the share market over a very long period of time to build massive wealth.

In the past, such as during the dot-com bubble of the early 2000s, Buffett’s investing style has been out of favour for periods of time. Some new investors have dismissed him as ‘too old’ or ‘out of touch with technology’. Whilst it’s true Buffett hasn’t invested in some of the biggest US growth companies over the past decade, he has still generated meaningful returns for his shareholders at the same time as amassing one of the largest war chests on the market.

If I were a shareholder in Berkshire Hathaway, I would feel very comfortable knowing Buffett has over US$130 billion ready to go in these uncertain times.

Yes, Warren Buffett’s net worth (on paper) has fallen in 2020, but that doesn’t mean he’s a spent force or a ‘has been’. On the contrary, I think he’s one of the best investors to watch right now, and when he finally starts putting that US$137 billion to work, it’s a good hint to take!

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• Should ASX 200 investors want share buybacks or dividends?
• 3 top Warren Buffett quotes to start off your week
• Start your week off with these 3 top Warren Buffett quotes
• 3 takeaways from Warren Buffett’s Berkshire Hathaway meeting

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 June 2020 $205 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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.

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I think that having a little exposure to the small cap side of the market can be a good thing for a portfolio.

After all, if you unearth the next Afterpay Ltd (ASX: APT) when it is just starting out, you could generate significant returns.

With that in mind, I have picked out three small cap ASX tech shares which I think could be worth a closer look. They are as follows:

Audinate Group Limited (ASX: AD8)

Audinate is a digital audio-visual networking technologies provider. It was growing at a rapid rate prior to the pandemic thanks to the significant expansion of its Dante product offering and the increased adoption by Original Equipment Manufacturers. While the pandemic will put a dampener on its growth, given the benefits it offers end users, I expect demand to pick up once the crisis passes. In addition to this, the company has recently expanded its offering into the audio-video category and could soon revolutionise this market.

ELMO Software Ltd (ASX: ELO)

ELMO Software is a provider of cloud-based human resources and payroll software. Its increasingly popular unified platform allows users to streamline processes for everything from employee administration, recruitment, and payroll. It has been growing very strongly in the ANZ market and delivered a 42.8% increase in annualised recurring revenue (ARR) to $52 million during the first half. The good news is that the company has still only captured a small slice of the local market. I believe this provides it with a long runway for growth. In addition to this, as its platform is jurisdiction agnostic, I believe an international expansion is a real possibility in the future.

Serko Ltd (ASX: SKO)

Serko is a technology company with a focus on developing innovative solutions to address the challenges of corporate travel and expense management. It is a market leader in its category and has over 6,000 corporations and travel management companies using its platform. While Serko’s business has been negatively impacted by the pandemic, it is well-funded and appears to be positioned for a return to growth when travel markets normalise.

More reading

• Top broker says this ASX stock is a better buy than Afterpay
• After hitting $50, the Afterpay share price has pulled back. Is it good value?
• ASX 200 up 0.1%: Big four banks rocket, Afterpay sinks lower
• Why Afterpay, CSL, Fortescue, & Newcrest shares are dropping lower
• 3 easy rules for building a massive ASX share portfolio

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Elmo Software. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and Elmo Software. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Serko Ltd. 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.

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