Investors should watch what Warren Buffett is buying, not what he has sold, billionaire value investor Mario Gabelli told CNBC on Friday.
Gabelli, chairman and CEO Gamco Investors, spoke a day after Buffett announced that his Berkshire Hathaway had unloaded about a third of its stake in IBM.
"What is Warren looking at? Where is he going hunting? Forget about what he sold, OK? That was done. Where is he going?" Gabelli said on "Squawk Box," a day before the Berkshire Hathaway annual shareholders meeting.
Gabelli, who has been attending Berkshire's annual meeting for years, started buying Berkshire's Class A shares some 30 years
Late Thursday, Buffett told CNBC about Berkshire's sale of about a third of its stake in IBM in the first and second quarters. Buffett said he doesn't "value IBM the same way" he did six years ago when he started buying it.
"I've revalued it somewhat downward," Buffett told CNBC. "When it got above $180 we actually sold a reasonable amount of stock."
Gabelli said Buffett could have made more money if he put his IBM stake in Amazon instead.
"There's always some portfolio adjustments," he said.