Warren Buffett and IBM Shares

Warren Buffett’s IBM dealings with IBM (International Business Machines) have come to a close. Berkshire Hathaway reported in that IBM stake had been cut 94% during the fourth investment quarter. Berkshire had in 2018, instead of increased their investment in Apple at $28 billion. A new holding in Teva Pharmaceutical Industries Ltd. was worth $365, the last quarter of 2017. People often wondered why Buffett had invested in IBM when technology is outside of his area of expertise despite putting more $10 billion in IBM, around 2011. In 2011, Buffett’s investment had been confident in IBM.

He had been wanting to sell IBM shares before last year’s end, as it would have been to his advantage to waiting until tax rates go higher. Berkshire’s stake was 2 million shares at the end of December, with a market value of $309 million. He realized he had not made a good decision with not investing in Google. He put in billions in Apple, in 2016, increasing Berkshire shares in iPhone to 165 million. Earlier in 2017, Buffett sold 33% of stake in IBM. He owned more than 81 million shares at year end 2016, owning instead in 2017, 37 million shares, a significant drop.

IBM had a somewhat good quarter in 2017. IBM spent $70 in fiscal years 2011-2014. IBM has a $135 billion company. Getting into IBM is betting against The Oracle of Omaha. The question is if the company is a value to invest in or a trap? IBM must be followed in order to decide if it is worth investing into or not. IBM has good years and bad years. In 2018, Buffett finally dumped IBM to go with Teva Pharmaceuticals, selling at least 35 million shares of IBM stock, leaving 2 million shares of IBM stock left.

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