Has Warren Buffet just gone techie ?

Yup, the man who said he doesn't buy technology companies because he does not understand them has finallly given up and purchased a share of IBM. You can also read about it here and here.

The official claim for the change of mind is the change IBM has made from a large hardware company to a large services company.  

Even though we remember that Buffet has already stated that Berkshire can no longer get bargains,  considering IBM's recent stock price, Mr. Buffet is buying at a peak. Technology stocks in general appear to be forming a nice little bubble of their own, I fear (not all, but too many, especially those living in the smart gadgets niche) and as P/Es are very misleading in the technology field, one can only assume Mr. Buffet and his assistants have been doing a deep and thorough research on IBM's business, and have probably also taken into account the company's proven ability to reinvent itself again and again over decades, while keeping the status of a true blue chip.

And yet, I feel that more than Buffet buying IBM as a good  deal , this is actually a necessary act for the future change of generations in Berkshire's leadership.

One day, hopefully many years ahead, Berkshire will be headed by a different person than Buffet. In that time, technology will not be something  Berkshire will be able to keep staying away from, lest it becomes an obsolete dinosaur.

Breaking the psychological perception "berkshire does not do technology" is essential for that future management.

IBM, the most utility-like in the technology sector,seems like the best choice to assist the market in changing its perceptions of Berkshire Hathaway. Taking that in mind, the IBM deal seems a lot better in my eyes. 

תגובות

פוסטים פופולריים מהבלוג הזה

מה הופך צוותים לטובים?

כשקוראים למשהו גידור לפעמים הוא מתברר כספקולציה

Seems like Obama's administration didn't get the 20 billion fund after all