Ode to Big Blue.
Warren Buffett revealed on CNBC that Berkshire Hathaway (BRK.A) had purchased 64 million shares (~$10.7 billion worth) of IBM, or roughly 5.5% of the company. Buffett & Co. started building a position in March with a goal of taking a $10 billion stake. Berkshire now ranks among the largest shareholders in IBM.
"They have laid out a road map, and I should have paid attention to it earlier," Buffett said of IBM on CNBC. "If you’re in some country around the world and you’re developing your IT department, you’re probably going to feel more comfortable with IBM than with many companies," he said. "They’ve done a terrific job of developing that."
Buffett also said IBM did not know that Berkshire was building a position, and that the company was finding out about his investment for the first time through CNBC. IBM is Buffett's first major investment in the technology sector. Recall, during the tech stock boom of 1998, Buffett told Berkshire shareholders, "Technology is just something we don’t understand, so we don’t invest in it." In 2000, in Berkshire's annual letter to shareholders, Buffett said, "We have embraced the 21st century by entering such cutting-edge industries as brick, carpet, insulation and paint. Try to control your excitement."
Buffett also disclosed on CNBC that Berkshire added to its holdings in WFC. Buffett added there will be a few "surprises" among the revelations of his stock holdings.
Separately, The Wall Street Journal went on to highlight, "Warren Buffett, who is obsessive about stock research, as a passive Dow Jones Industrial Average stock index...Including Buffett’s just disclosed purchase of IBM stock, the Oracle of Omaha has an investment in one-third of the 30 components in the Dow...The Dow is up just about 4.8% so far this year. Berkshire’s Class B shares are down 4.7% in 2011."
On top of his announced purchased of IBM shares, Buffett disclosed another large stake in a tech company – 9.3 million shares of Intel (INTC), valued at just under $200 million. Other new investments for Berkshire in its most recent 13-F filing include: A 5.7-million-share stake in CVS Caremark (CVS), a 4.2-million-share stake in DirecTV (DTV), a 3.1-million-share stake in General Dynamics (GD) and a 2.3-million-share stake in Visa (V).
Among the company's current holdings, Berkshire tripled its stake in Dollar General (DG), raised its stake in Torchmark (TMK) while cutting its stake in Kraft Foods (KFT) and Johnson & Johnson (JNJ).
IBM (IBM : NYSE : US$187.35), Net Change: -0.03, % Change: -0.02%, Volume: 6,001,970
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