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Buffet finally gives up on Big Blue

by on05 May 2017

Sells a third of his shares

After years of justifying a big investment in IBM, Warren Buffet has finally flogged off a third of his shares.

Buffett’s investment surprised many and has yet to prove successful. Buffett owned about 81 million shares of IBM at the end of 2016 and sold about a third in the first and second quarters of 2017.

Buffett admitted that he didn’t rate IBM the same way that he did six years ago when he started buying and he revalued it somewhat downward.

The IBM investment was viewed as a surprise, given Berkshire's longstanding underweighting in the technology sector and Buffett's resistance to investing in businesses he considered more difficult to understand.

Biggish Blue grew to be one of Berkshire's largest stock investments, along with Apple which suggests that Buffet is losing his touch.

Buffett has long been willing to sell stock investments, as opposed to entire businesses, when they do not pan out or he finds something better.

"IBM is a big strong company, but they've got big strong competitors, too," he said.

Berkshire Hathaway still owns over 50 million shares of IBM and Buffett said he has stopped selling. In April, IBM reported a bigger than expected decline in revenue for the first time in five quarters due to weak demand in its IT services business.

Last modified on 05 May 2017
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