Buffett's Berkshire Hathaway Cuts Stake in IBM by Third

Warren Buffett

In a painful admission, Buffett said he no longer valued IBM "the same way I did six years ago when I started buying".

Using historical price data for Berkshire Hathaway Class A shares from a retrospective analysis of Buffett's outsize returns and Yahoo Finance, we calculated how much $1,000 of Berkshire stock would be worth today if you had invested that money at the end of each year of Buffett's tenure.

During an interview on CNBC's Squawk Box on Thursday, Buffett explained that he cut his stake in IBM after "revising his view of the company's competitive prospects". That's down from $3.74 billion, or $1.52 per A share.

Berkshire started building its International Business Machines Corp. stake in 2011, eventually becoming the company's largest shareholder, with an investment valued at nearly $13 billion. The billionaire chairman and chief executive officer of Berkshire said he has since stopped selling, according to the broadcaster.

In November of the same year, Drukenmiller said he was shorting IBM shares because of the competitive threat of cloud computing to the company.

IBM (NYSE: IBM) recently reported a loss in revenue for the 20th consecutive quarter. The shares have lagged behind technology peers and the S&P 500 Index in 2017.

But Buffett says Berkshire Hathaway, which kicks off its annual meeting Saturday, could still buy.

That meeting is the centrepiece of a festive weekend of events throughout Omaha expected to draw more than 37,000 shareholders.

While Buffett is known for sticking with stocks like Coca-Cola Co. for decades, he's not wedded to old favorites when circumstances change. In last year's first quarter, Berkshire recorded a one-time gain of nearly $2 billion from a deal that involved exchanging Procter & Gamble Co. stock for the consumer company's Duracell battery business. He cited the competition facing Wal-Mart from online rivals like Amazon.com Inc., while pointing in 2012 to disappointing results at P&G.

Other topics on Saturday will probably include the state of the USA economy, investment fees, Trump and Wells Fargo & Co. This year its gain on investments and derivatives was $504 million.

"It is true that we own some stocks that I have no intention of selling for as far as the eye can see (and we're talking 20/20 vision)", Buffett wrote in the letter.

In his annual letter to shareholders released in February, Mr. Buffett said: "We have made no commitment that Berkshire will hold any of its marketable securities forever.We regard any marketable security as available for sale, however unlikely such a sale now seems".

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