Warren Buffet to Invest in IBM!
The legendary investor revealed the IBM (IBM) stock purchases during an interview on CNBC Monday. Buffett’s company, Berkshire Hathaway (BRK.A) will file a quarterly update on its U.S. stock portfolio Monday afternoon.
Buffett has long refused to invest in technology companies because he has said it’s too difficult to predict which tech applications or hardware will prosper in the long run.
But he said he recently changed his view of IBM based on what he read in the company’s annual reports. He said he should have realized years sooner that the heart of IBM’s business is providing service and equipment to information technology departments.
Buffett says he believes IBM has a sound plan for the future, and “there’s a fair amount of presumption in many places that if you’re with IBM, you stay with them,” he added.
Berkshire bought about 64 million shares since March, or about 5.6% of the company’s outstanding stock. IBM shares rose $1.39 to $188.77 in premarket trading after rising as high as $190.55 earlier.
Investors closely follow Berkshire’s investments because of Buffett’s successful record. Buffett has said that Berkshire has been buying aggressively during the recent market turmoil.
Buffett said Monday that Berkshire had been adding to its already sizeable stake in Wells Fargo(WFC), but he didn’t say how many more shares had been bought recently. At the end of June, Berkshire held 352.3 million Wells Fargo shares. That was up from 342.6 million shares Berkshire held at the end of March.
Monday afternoon’s filing with the Securities and Exchange Commission may not reveal a full picture of Berkshire’s investments because the Omaha-based company often delays reporting new investments for a time while building up a position.
Buffett said that the third-quarter report that will be filed Monday won’t show all of Berkshire’s new IBM stake because some of the shares were bought in the fourth quarter.
Besides investments, Berkshire owns roughly 80 subsidiaries including insurance, railroad and utility firms.