FWIW, IBM is more expensive on a PE basis, trading at trailing PE of 14 compared to Microsoft's PE of 9.8.
Yes, still IBM have been much better stock results than MSFT. Indeed, over this one year, the IBM stock has been doing better than AAPL.
Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
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Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#12From what I undersand, Buffet has always avoided technology companies because he believe he didn't understand them well enough in order to invest. Someone at IBM must have changed his mind?
Revealing my ignorance on this topic: Why would IBM care who owns their stocks, assuming the specific shareholder doesn't try to take influence on the development/direction of the company?
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#13FWIW, IBM is more expensive on a PE basis, trading at trailing PE of 14 compared to Microsoft's PE of 9.8.
From not a very good trader:
I think, even if you include dividends, any money in MSFT has been completely stagnant for 10 years (and may have actually lost value). IBM stock paid dividends and nearly doubled in the same time period.
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#14From what I undersand, Buffet has always avoided technology companies because he believe he didn't understand them well enough in order to invest. Someone at IBM must have changed his mind?
IBM's business model is approximately
"We will solve your problems for piles and piles of money. Usually not problems that require technical breakthroughs or research level computer science knowledge, but ill-defined problems that involve many stakeholders, much politics, and complex business logic."
They make their money as a professional services company (a model Buffett has no trouble understanding) that uses technology.
That, at least, would be my take on it.
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#15Invest in companies that are actually producing something valuable. That's the way to restart the economy. Can we all move on from the social media bubble and get back to real work now ?
"Social Media" is just a buzzword for communications. I promise you that communicating over the internet is valuable and won't be going away anytime soon.
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#16From what I undersand, Buffet has always avoided technology companies because he believe he didn't understand them well enough in order to invest. Someone at IBM must have changed his mind?
IBM's business model is approximately "We will solve your problems for piles and piles of money. Usually not problems that require technical breakthroughs or research level computer science knowledge, but ill-defined problems that involve many stakeholders, much politics, and complex business logic." They make their money as a professional services company (a model Buffett has no trouble understanding) that uses tech…
That is IBM Global Services, which is basically the same as Accenture, Cap Gemini, Wipro etc, IT outsourcing/offshoring. It's about half of IBM, by revenue.
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#17From what I undersand, Buffet has always avoided technology companies because he believe he didn't understand them well enough in order to invest. Someone at IBM must have changed his mind?
Revealing my ignorance on this topic: Why would IBM care who owns their stocks, assuming the specific shareholder doesn't try to take influence on the development/direction of the company?
Buffett only owns companies at a level where he can influence. Usually, what he wants is profit paid as a dividend, but it depends on his level of investment. He usually does not invest for growth -- he thinks IBM is under-valued, so he's taking a position.
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#18Earlier quoted context omitted.
IBM's business model is approximately "We will solve your problems for piles and piles of money. Usually not problems that require technical breakthroughs or research level computer science knowledge, but ill-defined problems that involve many stakeholders, much politics, and complex business logic." They make their money as a professional services company (a model Buffett has no trouble understanding) that uses tech…
That is IBM Global Services, which is basically the same as Accenture, Cap Gemini, Wipro etc, IT outsourcing/offshoring. It's about half of IBM, by revenue.
I sit corrected.
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#19From what I undersand, Buffet has always avoided technology companies because he believe he didn't understand them well enough in order to invest. Someone at IBM must have changed his mind?
Revealing my ignorance on this topic: Why would IBM care who owns their stocks, assuming the specific shareholder doesn't try to take influence on the development/direction of the company?
They don't. The parent is wrong in suggesting someone 'convinced' Buffet.
Because of the herd mentality around investing who invests in you does matter, but not for this discussion.
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#20Invest in companies that are actually producing something valuable. That's the way to restart the economy. Can we all move on from the social media bubble and get back to real work now ?
I don't think Buffett actually cares about that. Also, Facebook produces attention to sell to advertisers, and that's been valuable for a while -- the social part is just a good idea we have right now for attention, which in the past was newspapers, radio, TV, web portals, search engines, etc.