Warren Buffett knows some social networking stock will see their values skyrocket in the years and decades to come. And even though he has his own account on Twitter (TWTR), there's one simple reason why he won't put a single dollar of Berkshire Hathaway's (BRK.A 0.82%) (BRK.B 0.84%) money into it, Facebook (META -1.25%), or their peers.

Is this because he's bitter he missed out on some of the greatest gains over the years by not investing in the hot growth stocks of years past? Or does it have to do with the fact Buffett has long been a fan of stocks that are "on sale," which certainly would not describe the incredibly lofty valuations seen at Facebook and Twitter at the moment?

Actually, neither. The reason is that Buffett has no real way to gauge the actual value of these social media stocks.

Consider what he said the 2001 letter to Berkshire Hathaway shareholders as the market began to watch the dot-com bubble burst: "At Berkshire, we make no attempt to pick the few winners that will emerge from an ocean of unproven enterprises. We're not smart enough to do that, and we know it."

More recently, as shown in the video below, Buffett noted that he has been successful because he sticks to industries and companies he's most comfortable with. These are also the sectors he understands and for which he can determine a true value.

For some, this means sticking to the sectors they know and can grasp, whether it's banking, technology, or energy. Some of those stocks will make for great investments. For others, it means trusting in the broader power of the stock market, and diligently saving and investing into index funds.

Put simply, Buffett said Twitter and Facebook aren't "on the list" of companies he understands and feels comfortable pegging a value to. As a result, he'd never buy them, but he'd never short them, either.

Like Buffett, whenever we're buying stocks, we must always ensure we truly grasp not only the business of the company, but its true value.