Buffet backs Big Blue

 

WarrenBuffett1IBM might have had a bad year, but its attempts to improve itself have been given the thumbs up by contrarian investor Warren Buffet.

Buffett, who is the CEO and chairman of Berkshire Hathaway has been buying IBM shares, because they are pretty cheap at the moment.  That said the amount of money he invested in the first quarter took a hammering.  IT has been estimated that Buffet lost $700 million on IBM so far.

Buffett’s Berkshire owned a more than eight percent stake in IBM as of June 30. IBM shares have slumped nearly 12 percent so far in the third quarter.  He has also been buying shares in Phillips.

He made a mistake when he alluded to buying more IBM.  He thought he had bought shares in the second quarter but it appears he forgot.

Still it means that Buffett will be part of IBM’s life for a while.  He famously said that you have to buy shares when they are cheap and play a ten year game with them.

Buffett also said that the US economy was not growing at a “booming” rate but remained on the path it has been on for six years of growing at a rate of two percent or a little better annually. He said he would “be a little careful” about getting too excited about quarterly statistics.