Investor Warren Buffett, the world’s third richest man ranked by Forbes, says his company Berkshire Hathaway has bought in $10.7 billion of IBM stock over the past 8 months, about a 5.6% stake, making him IBM’s biggest shareholder.
Warren Buffett with Bill Gates
The legendary investor revealed the IBM stock purchases during an interview on CNBC Monday. Buffett’s company, Berkshire Hathaway will file a quarterly update on its U.S. stock portfolio Monday afternoon. IBM is the world’s third largest technology company after Apple and Microsoft.
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.
Buffett said Monday that Berkshire had been adding to its already sizeable stake in Wells Fargo, 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. Wells Fargo is the fourth largest bank in America.
Buffett has been patiently buying IBM since March, totaled up $10.7 billion for 64 million IBM shares with an average cost-per-share at about $167. IBM shares now worth $189 - a nice $1.4 billion profits over 8 months or $5.83 million per day for Buffett in his IBM investment.
Apart from IBM and Berkshire Hathaway, Buffett is also the largest shareholder of Coca Cola, American Express, Kraft Food, Munich Re, Moody’s and Wells Fargo.
Buffett injected $5 billion into Bank of America in August, on which the bank will pay him an interest amounted to $820,000 everyday. In 2008, he infused $5 billion into Goldman Sachs, by which Goldman will pay him an interest of $1.37 million everyday. They are currently still paying him.