Berkshire Buys 5 Percent Of IBM, Other Issues

Warren Buffett said Monday that his company has spent $ 10.7 billion to buy more than 5 per cent of fish stock of IBM this year's surprise move by billionaire investor who has long avoided investing in companies with high technology.
Berkshire Buys 5 Percent Of IBM
Berkshire Hathaway also revealed a number of other new investments during the turmoil in the third quarter. In addition to new investments from IBM, Berkshire has added much smaller stakes in Intel Corp., DirecTV, General Dynamics Corp. and CVS Corp. Mark Care

Most of the details emerged from the quarterly update submitted to the authorities of Berkshire's equity portfolio U.S. 59000000000. Buffett revealed some details in interviews earlier in the day.

Monday's presentation does not provide a complete picture of Berkshire's assets, however, because the Securities and Exchange Commission allowed the Omaha-based company, keep some of their investments confidential.

Buffett has long refused to invest in high technology companies, said it's too hard to predict that technology companies succeed in the long term.

But he said he recently completed his vision of IBM was wrong based on what he had read in the annual reports of the company and what he learned by talking to affiliates of Berkshire services. He said he should have done years ago that the material is no longer the heart of IBM's business.

"Now I am very firm, and are very attached to their customers," said Buffett. And he said, IBM clients are reluctant to change when they start to work with IBM.

So Berkshire has purchased approximately 64 million shares in March, amounting to about 5.5 percent of IBM. Buffett says he believes IBM is a good plan for the future.

Andy Kilpatrick, the stockbroker-author of "permanent value the story of Warren Buffett," he said, it is surprising to see Buffett to invest in a high-tech company, but the investment seems to be an example Warren Buffett find something good in order that had been neglected previously.

"I do not think things are moving very far from what he has always done," said Kilpatrick.

IBM joins several other icons of American business in the portfolio shares of Berkshire. Warren Buffett's company already owns shares of Coca-Cola Co., American Express Co., Wells Fargo & Co., among others.Berkshire Buys 5 Percent Of IBM

IBM officials declined to comment Monday on investment from Warren Buffett.

International Business Machines Corp., which marked its 100th anniversary in June, held up well, even in a downturn because of the difficult decisions he made in the 1990s when he listens to an outsider as CEO to help a recovery.

At that time, IBM slides with the advent of inexpensive microprocessors and rapid changes in the industry. Although it has contributed to the personal computer a consumer product, he quickly found himself ousted in a market he helped create. PC also began to perform many functions of the IBM mainframe build a lucrative business in major disarray.

The company then decided to focus on areas of high-margin software and technologies of information and the transfer of computer hardware. This will enhance IBM's $ 3.5 billion purchase of PricewaterhouseCoopers Consulting Division 'in 2002, has sold its PC division to Lenovo for $ 1.75 billion in 2005. Today, IBM is the largest global provider of technology services.

The change is important because it allowed IBM to ride two regression. When times are tough, companies will pay IBM to help them find ways to cut costs and deal with matters that technology would be more expensive to do alone.

From IBM more than doubled since the depth of the recession in 2008. From IBM earned as much as $ 2.46 Monday to trade near its 52 weeks high of $ 190.53 before slipping to close at $ 187.35, down 3 cents.

Buffett said Berkshire paid an average of about $ 170 per share for IBM.

IBM executives insist the company's focus on long-term isolation from economic fluctuations. The company said it is ahead of its own aggressive forecasts. IBM has announced the goal of reaching $ 20 per share in adjusted earnings in 2015, a rare example of the long-term gains made by a public company. IBM, based in Armonk, New York, said he plans to continue growing software and invest about $ 20 billion of acquisitions from 2011 to 2015.

Third quarter report released Monday does not contain all of the new IBM Berkshire stake because Buffett has said that some of the purchase price was in the fourth quarter.

A couple of other new investments announced Monday is high-tech companies. In late September, Berkshire held 9300000 shares Intel, 4.2 million shares of DirecTV, 3.1 million shares of General Dynamics and 5.7 million shares of CVS Care Mark.

But other new investments outside of IBM, were less than $ 200 million in late September. This figure suggests that dollar investments have been made by new Berkshire investment manager Todd Combs, which runs from 1000 million and U.S. $ 3 billion.

It is not clear who chose investment because the filing does not differentiate between investments Berkshire makes, investments any of about 80 subsidiaries make, or investments Buffett himself.

In addition to new investments, Berkshire also reported changes in some of his possessions, including:

- Adding to its large stake in Wells Fargo 352300000 361400000 shares in June

- Reducing its stake in Kraft Foods to 89700000 shares of 99.5 million euros.

- Promote inclusiveness Dollar to 4.5 million shares of $ 1.5 million.

- Increasing its stake in the insurer Torchmark Corp. to 4.2 million shares of 2.8 million.

Berkshire's investments are closely watched in the market thanks to the success of Warren Buffett record. Buffett said Berkshire has bought aggressively in the recent market turmoil.

Berkshire sometimes receives permission from the SEC to delay the disclosure of certain stock purchases to prevent others from raising the price of the shares of Berkshire before completing the purchase. Berkshire will disclose purchases or sales of a series of questions following quarter and the reports of modification of the previous quarters.

Berkshire Buys 5 Percent Of IBM

SEC says that investments to maintain the confidentiality of the leaders only if they can demonstrate to suffer significantly with immediate publication.