Buffett, IBM And Picks For The Long-Term Investor

Warren Buffett heard the buzz about IBM before, so when last week's announcement of a loss of revenue resulted in a 5% decline in the stock price of technology giant, did what he faced Changes in the usual short-term value of their assets.

Probably nothing.

Some believe that Buffett's involvement in IBM is curious not only because of its overt cautious approach to technology over the years, but also by changing the world to cloud computing and the threat posed to by manufacturers of computing devices . But Buffett does not make investments without concrete reasons for doing so. 2011 In his letter to shareholders of Berkshire Hathaway, Buffett explained his foray into IBM, based on the belief that the company would offer benefits in the form of thousands of millions of dollars in dividends and share redemptions over time.

A recent article in Fortune said: "Buffett, who was seduced by IBM in part because of their dividends, did not see your bet on IBM's esperaba.Pero salary his foray into IBM did not flipido exactly, either , Adding that the non-profit corporation report showed that $ 2.6 billion returned to shareholders in the form of dividends and redemptions during the first quarter (ending March 31). The article pointed out that, given the dividends that IBM has been "consistent delivery is very likely the gamble [Buffett] in the business is still in the dark".

If only focuses on the price of IBM shares of Buffett's initial purchase in 2011, one wonders if the investor world legend had broken its famous first investment rule: "Never lose money. But in the Buffett rulebook, there is more than one way of hiding an action. Buffett's decision to invest in IBM has been characterized by a long-term vision, so you should not be surprised that his decision has not been shaken by the gradual decline in action (from the high February of $ 180 Per share).

This was not the first time he had seen a decline - in June 2011, shares traded at $ 174, but in September 2015, the stock price fell to $ 137, leaving Buffett about to break His own command. However, he continued to add to his position, even though stocks have plummeted. In fact, last year, the Oracle told investors that it had no intention of getting rid of the shares and the expected rebound. And although they did just that to reach the highest of February, this does not change the reasons for the initial investment for Buffett.

Sometimes it's hard not to think that Warren Buffett knows something that the rest of us. But the comments shared in countless interviews and letters to shareholders confirm that their decisions are so far from being a crystal ball that you can get. It invests on the basis of the underlying fundamentals, then take a long-term view and clings to this vision, impervious to market noise and excitement. This does not mean that there are no mistakes or lose money, or that IBM remain in the Berkshire portfolio forever. It is safe to say, however, that it will take more paper losses incurred IBM shares last week to send Buffett running.