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November 16, 2011 at 08:44 AM
Although he normally shuns tech stocks, Warren Buffett, head of Berkshire Hathaway, veered from his usual policy and sank close to $11 billion into shares of IBM, picking up a stake of almost 5.5% that makes him potentially its biggest shareholder. Currently that position is held by State Street Global Advisors.
Citing IBM’s ability to keep corporate clients, which tends to indicate he values the company more for its services than its technology—something he has previously said he does not understand well enough to invest in—Buffett (left) admitted in a Reuters report that perhaps he should have bought in five years ago when the price was lower. However, technology analysts said that despite the fact he could have bought the stock for one-third less a year ago, it was still a good move for him.
Collins Stewart analyst Louis Miscioscia said in the report, “Maybe he could have gotten a better price … but if you look at Warren Buffett’s investment policy I would assume this is a long term investment. This is not your father’s IBM; the management has done a good job of cost control, returning cash to shareholders.”
