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IBM Tumbles To New 5 Year Lows After Buffett Admits Huge Loss
We're gonna need a bigger buyback... As if "old tech" IBM was not in enough trouble, the worrying admission from Buffett's Berkshire Hathaway's earnings of around $2 billion (though careful to note he is not about to sell) has seemingly prompted further weakness. IBM is down almost 2% to fresh May 2010 lows...
As Berkshire Hathaway detailked...
As of September 30, 2015 and December 31, 2014, we concluded that there were no unrealized losses that were other than temporary. Our conclusions were based on: (a) our ability and intent to hold the securities to recovery; (b) our assessment that the underlying business and financial condition of each of these issuers was favorable; (c) our opinion that the relative price declines were not significant; and (d) our belief that market prices will increase to and exceed our cost.
As of September 30, 2015 and December 31, 2014, unrealized losses on equity securities in a continuous unrealized loss position for more than twelve consecutive months were $204 million and $65 million, respectively. Unrealized losses at September 30, 2015 included approximately $2.0 billion related to our investment in IBM common stock, which represented 15% of our cost. IBM continues to be profitable and generate significant cash flows.
We currently have no intention of disposing of our investment in IBM common stock. We expect that the fair value of our investment in IBM common stock will recover and ultimately exceed our cost.
Fresh 5 year lows..
It seems someone is fishing fro Buffett's pain point.
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Thats a new one, Buffet confessing? Kind of goes against the wall street whores rules doesnt it?
He'll beg behind the scenes for a bailout from his Buddy in DC. Probably the Gubmint will buy $5 Billion in IBM stuff for Obamacare Management.
buffett not doing well with Rails or DE either.
his saying IBM will eventually recover is the theory behind mark to fantasy for the banks.
Couldn't happen to a nicer guy.
He's got another 5-10 years to buy and hold for profit right?
A fossil invests in a fossil. Sounds like a winning combination.
Good to see Buffet lose some change.
Supporting Obama's policies eventually comes back to bite ya.
Raise rates everything is awesome!!!!!!!!
I thought Buffett only bought stuff he understands. I get that he understands buybacks but clearly doesn't understand the peripheral business (core business is enriching shareholders).
That is an interesting point, he had an aversion to Microsoft, did he not?
IBM is dead. They are selling off units and products, SPSS the latest.
It is being cannibalized from the inside out.
It is not a company anymore, it is a dying blue whale being eaten by M.B.A. sharks.
they just bought weather.com from bain & blackstone - that was an interesting move...
IBM is a slow-motion train wreck. Cringely has been documenting their ongoing fail for years now.
http://www.cringely.com/?s=ibm
Did IBM sell off SPSS? News to me? Would be interested in a cite or background if you have any.
I run a large corporate IT spend and have never met a bigger bunch of scumbags than IBM (ok, maybe Oracle).
IBM did not. They sold off SPSS Data Collection, which is a survey application/workflow system under the SPSS umbrella. The application was never core to SPSS and lagged behind other competing products in the web-based survey world. SPSS Data Collection was sold to IBM partner that has purchased 8 other non-core IBM products.
See my reply below. IBM sold SPSS Data Collection, a non-core survey/workflow system, to an IBM partner.
I'm sure Warren's big investment in the white house will backstop any losses.
Part of the WB/White House trains not pipelines approach to moving oil.
at least buffett didn't call ibm a slow motion train wreck. ;)
".. We expect that the fair value of our investment in IBM common stock will recover and ultimately exceed our cost." - Thats what I've been saying about my Silver stocks for the past few years
Perhaps Buffet used a margin account at 0% interest.
"We currently have no intention of disposing of our investment in IBM common stock."
How long does currently last? Could be as short as the finishing of the sentence spoken.
IBM has been a zombie for ten years and more. I don't believe their revenue numbers or profit statements for the last five, I think the zombie corpse has been uniquely used by the Fed to manipulate market aggregates.
This is Buffett's grand mistake and the stock could sink to zero overnight at any time, if and when the truth gets out. Buffett must know about the Fed meddling, but how he could not know about the zombie status of the corpse is the question. Perhaps as part of the setup for the end of ZIRP Janet is letting IBM share prices settle a bit.
Buffet's got the connections to sell directly to the Fed if he wants.
"We currently have no intention of disposing of our investment in IBM common stock."
Sometimes you dispose of the stock, sometimes the stock disposes of you.
Uncle Warren: That nasty old cocksucker ALWAYS talks his book. And his book is ALWAYS the opposite of his talk. So translation: this POS is heading for the corporate elephant graveyard, the new CEO (who actually has a VAGINA!) is a fucking disaster, there's no money in the cloud (other than being a US government agent-which doesn't pay), and post-Snowden all of big blue's real growth markets for high margin old-schooly type stuff heve fled, shrieking. Seems they're not 'down' with have every single byte of data stolen and siphoned off for storage in Bluffdale Utah....
If it fucks you like a ponzi, if it farts like a ponzi and smells like a ponzi then you almost certainly bet it is a ponzi.
Ponzis alays have a tendency to fuck up.
Ask madeoff
Pro tip for Buffet don't invest in old guard companies now run by women.
It means the smart men have decided that leading company isn't worth fighting over any more
That means it's time to let the women preside over the companies death.
Does Buffy the Warren have dementia?
When it comes to smoke enemas, Ginni is a pro.
Tell me, does IBM actually produce anything these days other than FUD?
Standard Disclaimer: At least if I buy a new desktop/laptop from Dell, I get a free drone with my order (through one of those affiliate company programs)...