Has Buffett Got This Wrong? - Why IBM Does Not Appear To Be A Good Fit In The Berkshire Hathaway Portfolio
by Dividend Pros
After reading the company's annual reports for 50 years and choosing not to invest, the legendary Warren Buffett "got a different slant" on IBM's (IBM) 2010 annual report and bought a stake worth more than $11 billion in 2011. Since then, Buffett has continued to add to what is now his portfolio's third largest position representing more than 17% of his portfolio, SEC filings show. Ever since the Berkshire Hathaway Inc. (BRK.B) CEO revealed that his company had bought IBM in November 2011, there have been tons of articles written- both on this site and elsewhere- on why the Oracle of Omaha has been loading up his portfolio with IBM stock and what qualities Buffett so loves about the company. However, I think that in some ways, IBM is quite unlike Buffett's other investments and some of its attributes even undermine Buffett's earlier stated investment principles. In this article, I will discuss how IBM differs from Warren Buffett's other major investments and then give my verdict on whether Buffett made a mistake buying IBM. read more »
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