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Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
81–86 of 86 posts
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#82Earlier quoted context omitted.
... says the guy posting his comment via social media. (Yes, HN qualifies.)
It bothers me when people apply a new buzzword to an old concept. Calling things like HN and forums "Social Media" is no more descriptive than calling a garbage truck driver a "sanitation engineer." I can just imagine less scrupulous investors saying, "Hey, look! That thing you're doing? It fits in my overly-broad buzzword category! Give me money for my Social Media fund!"
It's more like telling that a truck driver works in transportation or logistics. The thing is, of course forums and IM were here since a long time. But different developments have made people aware of it around 2005, it's gotten a lot more pervasive in everyone's life, and so there is now a category for it. The classification of new phenomenons often take a few years until someone can "abstract" it together and explain it. The fact that people here discuss together, meet, share makes it social, no matter what other people tag with that word. Every trend can be subject to abuse, for sure.
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#83Earlier quoted context omitted.
On CNBC this morning, Buffet made it sound as if it was more about liking the value based on the annual report he saw in March. He's been reading IBM's annual report for over 25 years. He did some diligence, and then began establishing a position.
If 25 years is some diligence then I clearly have started off WAY too early.
Buffett is famous for doing exactly that, reading company reports (and other research) for a really long time before investing(I would imagine he must have read IBMs even earlier than 1986).
He would read company reports, even if he had no plans to invest. It is one of his hobbies (not only a job).
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#84Earlier quoted context omitted.
Earnings are strictly past performance. They are a fixed quantity that has no meaning other than "for X time period, the company had Y profit". Price is based on a combination of assets (not all of which have fixed values), future outlook (which can change at any moment and is based on subjective judgements and irrational consumer spending decisions), scarcity of the stock, and even second-to-second manipulations by…
Very helpful, thanks. And for what it's worth, this is what I (and xyzzyz above, I imagine) wished you would have said initially, two comments up, for a higher HN S/N.
Yes, helpful, but P/E is still important as a proxy measure for all of the things you mentioned. Current earnings are not a worse predictor of future earnings than many other more complex possible models. Under the assumption that future earnings will be at least reasonably predicted by current earnings, comparing the price as a multiple to that predictor is not a bad way to make a purchase decision relative to other assets. Of course book value is important, as are growth prospects, but book value (hopefully less so after IFRS4) is not really a great estimator of fire-sale value, and I would argue that growth is second order to earnings' first order and accordingly harder to estimate.
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#85IBM is a little bit weird. While it's true that they don't build product, they're still milking those old LotusNotes, FIM, WebSphere (enterprise version) installation. Those things will become more expensive to maintain through time. The recent IBM offerings are all based on Open Source being re-packaged: - IBM packaged Hadoop - WebSphere Community Edition is based on Tomcat - IBM HTTP Server is based on Apache By ut…
What I've noticed is Berkshire Hathaway public stock investments tend to fit two criteria - First, does it pay a dividend? Yep, IBM does. Second, is it integrated into the overall economy? I think of it as if imagining what would happen if the company just up and vanished over night. So railroads, power companies, this would result in a lot of other companies would have big problems. Then of course there are all the…
Has Warren Buffett made any mistakes in his big investmests thus far?
Re: Buffett Says Berkshire Has Bought About $10.7 Billion in IBM
#86Earlier quoted context omitted.
What I've noticed is Berkshire Hathaway public stock investments tend to fit two criteria - First, does it pay a dividend? Yep, IBM does. Second, is it integrated into the overall economy? I think of it as if imagining what would happen if the company just up and vanished over night. So railroads, power companies, this would result in a lot of other companies would have big problems. Then of course there are all the…
Has Warren Buffett made any mistakes in his big investmests thus far?
"Berkshire Hathaway" itself, the original company, was a textile manufacturer. Warren Buffet said this was a terrible business because what would be profit margins would just have to be re-invested in the company to upgrade the production capacity to keep up with competitors.
Solomon Brothers also comes to mind as one referred to by Warren as a "mistake."