Guest Dazel Posted April 3, 2013 Share Posted April 3, 2013 I have never owned it...very envious...Buffett will do well here...cloud helps them as it makes things cheaper for them...they are not a big products company they are services...so when products get cheaper they keep their margin or raise it...and their customer is happy. Dazel. Link to comment Share on other sites More sharing options...
racemize Posted April 3, 2013 Share Posted April 3, 2013 He states that IBM's *only* competitive advantage is its ability to integrate different products into a working solution, and that IBM is/was ahead of its competitors in that regard. Lou might have been right in 2003 when the book was published. Today I would say Microsoft is in the lead; at least when you look at the most common products bought by corporations of which SharePoint is one. Microsoft's marketing material has the answer ;) http://download.microsoft.com/download/0/5/F/05FF69ED-6F8F-4357-863B-12E27D6F1115/Comparing%20SharePoint%20and%20IBM%20in%20Enterprise%20Collaboration.pdf To match SharePoint, customers are forced to purchase and integrate a variety of IBM point-solutions. The vast range of options include WebSphere Portal, Lotus Notes and Domino, Quickr, WebSphere Dashboard Framework, Alphabox, IBM Workplace Forms, Content Manager, FileNet, Lotus WCM, Sametime, Connections, Omnifind, InfoSphere, and IBM Content Analyzer. Furthermore, even within many of these individual products there are multiple versions, editions and deployment alternatives. (e.g., Quickr’s Domino version and Websphere version; Omnifind’s Enterprise Edition, Enterprise Starter Edition, Discovery Edition, Yahoo! Edition, etc.) Many of these solutions have features that overlap (e.g., Connections, Quickr), implement different content repositories (e.g., Domino, Content Manager, FileNet), were killed or suffer from lack of long-term commitment from IBM (e.g., Domino Document Manager, Quickplace, Workplace) . IMO, IBM doesn't have a very good product portfolio, but this is not necessarily a bad thing for a company that sells other services… I have yet to talk to anyone that uses sharepoint that doesn't absolutely hate it. My wife's company has hired multiple >100k salaried people just to support sharepoint, and they don't even like it! It seems like some of the open source or web-based products will take it out eventually. Link to comment Share on other sites More sharing options...
Gopinath Posted April 3, 2013 Share Posted April 3, 2013 My company has been using SharePoint for years now, will be upgrading to 2013 next year or so. Although there are occasions users hate the platform, over all the users experience have been satisfactory. Link to comment Share on other sites More sharing options...
Guest hellsten Posted April 3, 2013 Share Posted April 3, 2013 I have yet to talk to anyone that uses sharepoint that doesn't absolutely hate it. My wife's company has hired multiple >100k salaried people just to support sharepoint, and they don't even like it! It seems like some of the open source or web-based products will take it out eventually. Most, if not all, enterprise products are incredibly bad when compared to consumer products or products built by smaller companies (e.g. open source). Most of the corporate customers IBM and MSFT target do not care that much about the quality or price of the product. Hell, most of them don't even know how to evaluate the quality of a product and much less figure out what it should cost. It's all magic to the buyer… I think Warren and Charlie have figured this out. It's mostly about human behavior… What corporate managers care about is that you don't get fired for hiring MSFT, IBM or other megacorporations. Here's one example: http://arstechnica.com/tech-policy/2013/02/why-a-one-room-west-virginia-library-runs-a-20000-cisco-router/ There are many other reasons why IBM, MSFT and ORCL are gold mines. One is FUD: http://en.wikipedia.org/wiki/Fear,_uncertainty_and_doubt Just my 2 cents… Link to comment Share on other sites More sharing options...
Liberty Posted April 19, 2013 Share Posted April 19, 2013 Down 6.5% after earnings http://www-03.ibm.com/press/us/en/pressrelease/40878.wss Link to comment Share on other sites More sharing options...
Charlie Posted April 19, 2013 Share Posted April 19, 2013 I bought some IBM today. Some information from the earning call today: "Now we’ve got a lot of work to do, but we know how to get it done. By the end of 2013, taking into account our operational performance, benefits from workforce rebalancing activity and gains and charges, we expect to deliver at least $16.70 of operating EPS for the year. All of this is consistent with our objective to achieve at least $20 of operating EPS in 2015." I think it is pretty cheap and as Munger said: Buy the cannibals. :) Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted April 19, 2013 Author Share Posted April 19, 2013 Is Berkshire Hathaway cheaper though? Link to comment Share on other sites More sharing options...
Charlie Posted April 19, 2013 Share Posted April 19, 2013 Berkshire Hathaway is probably more safe, but I´m not sure if it is cheaper. Since my portfolio was 100% Berkshire Hathaway I have now the positive effects of diversification or diworsification. ;) Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted April 19, 2013 Author Share Posted April 19, 2013 Nevermind, I didn't realize that berkshire hathaway ran up in price this year. Link to comment Share on other sites More sharing options...
plato1976 Posted April 19, 2013 Share Posted April 19, 2013 What's the "operating EPS" mean here? Just net profit per share ? I bought some IBM today. Some information from the earning call today: "Now we’ve got a lot of work to do, but we know how to get it done. By the end of 2013, taking into account our operational performance, benefits from workforce rebalancing activity and gains and charges, we expect to deliver at least $16.70 of operating EPS for the year. All of this is consistent with our objective to achieve at least $20 of operating EPS in 2015." I think it is pretty cheap and as Munger said: Buy the cannibals. :) Link to comment Share on other sites More sharing options...
Charlie Posted April 20, 2013 Share Posted April 20, 2013 "What's the "operating EPS" mean here? Just net profit per share ?" Here should be the answer somewhere: http://finance.yahoo.com/news/international-business-machines-management-discusses-224404462.html Link to comment Share on other sites More sharing options...
Palantir Posted April 20, 2013 Share Posted April 20, 2013 Added to my watchlist. I just need for this to fall like 30%. You can do it! Link to comment Share on other sites More sharing options...
plato1976 Posted April 20, 2013 Share Posted April 20, 2013 30% from here ? wow, that means the sp500 index may be around or below 1000 Added to my watchlist. I just need for this to fall like 30%. You can do it! Link to comment Share on other sites More sharing options...
fareastwarriors Posted April 30, 2013 Share Posted April 30, 2013 http://www.bloomberg.com/news/2013-04-30/ibm-approves-5-billion-for-repurchases-raises-dividend-12-.html IBM Approves $5 Billion for Repurchases, Raises Dividend 12% Link to comment Share on other sites More sharing options...
JBird Posted June 19, 2013 Share Posted June 19, 2013 Has anyone spotted something in the annuals that mention their clients having high switching costs? Link to comment Share on other sites More sharing options...
no_free_lunch Posted June 20, 2013 Share Posted June 20, 2013 I don't know if it's in the official report or not but many of their products and some of their services do have high switching costs. I don't know if that answers you question or not. Link to comment Share on other sites More sharing options...
Palantir Posted June 20, 2013 Share Posted June 20, 2013 Has anyone spotted something in the annuals that mention their clients having high switching costs? Rhetorical question or actual one? If it's actual, I don't believe they say so, but I assume it's a rhetorical question. If so, what are you getting at? Link to comment Share on other sites More sharing options...
JBird Posted June 20, 2013 Share Posted June 20, 2013 Thanks no free lunch. Palantir, it was an actual question. I was reading the annuals looking for what Buffett spotted to prompt his further investigation, to speak with subsidary managers about their IT. Buffett said he reread "Who says elephants can't dance?", perhaps there was something in there. Link to comment Share on other sites More sharing options...
Palantir Posted June 20, 2013 Share Posted June 20, 2013 Have wondered that myself too...maybe I'll go read again and see if revelation strikes me. Link to comment Share on other sites More sharing options...
John Hjorth Posted June 20, 2013 Share Posted June 20, 2013 Has anyone spotted something in the annuals that mention their clients having high switching costs? My guess is that you will find nothing, based on the angle in general on the topic, ref. your "their clients" [iBM's]. The switching costs of the customers of a company is a sensitive topic. A company will only mention own moat in publicly accessible documents on the basis of their own virtues and own-brand products and services excellences, not customers pendency of the company's products in the form of opportunity costs by opting out of the company's products. It could by one or more customers be construed and interpreted as an arrogant attitude towards customers. You don't intentionally step on the toes of a customer, and you do your best to try to avoid to do so unintentionally, unless you have already decided for some reason to get rid of the customer, or unless you are in some kind of state of conflict with the customer for some reason, and you are prepared to loose the customer relationship. It is also my guess, that you might possibly find comments about consulting and assisting new IBM customers reducing costs switching to IBM systems and services, or consulting and assisting existing customers reducing costs switching to new IBM systems and services. Link to comment Share on other sites More sharing options...
fareastwarriors Posted August 6, 2013 Share Posted August 6, 2013 IBM Furloughs U.S. Hardware Employees to Reduce Costs http://www.bloomberg.com/news/2013-08-05/ibm-furloughs-u-s-hardware-employees-to-reduce-costs.html Link to comment Share on other sites More sharing options...
CanadianMunger Posted August 6, 2013 Share Posted August 6, 2013 Two sentence thesis for Berkshire's massive investment in IBM: In 2002 IBM had 1.7 billion shares outstanding. At year end 2012, they had 1.1 billion. Extrapolate that 10-20-30 years out. Who cares if the top line is flat, or if it declines somewhat? Looks like Buffett is getting his wish for IBM shares to languish. I don't mind either as its my second largest position behind Berkshire. -CM Link to comment Share on other sites More sharing options...
JBird Posted August 6, 2013 Share Posted August 6, 2013 CM, Strongly agree here. I think the only thing Buffett would add is an expectation of moderate earnings growth. "If IBM were to earn, say, $20 billion in the fifth year, our share of those earnings would be a full $100 million greater under the “disappointing” scenario of a lower stock price than they would have been at the higher price. At some later point our shares would be worth perhaps $1.5 billion more than if the “high-price” repurchase scenario had taken place." Berkshire AR 2011 Since Berkshire's initial investment, IBM's net income need only rise 4.5% compounded to reach $20 B in 5 years. And if the scenario plays out as he drew it up in this letter, their pre-tax gain would be 12.4% compounded annually. ($307/$170) Why $307? 20 billion divided by 910 million shares with a multiple of 14. Certainly the outcome is not set in stone but I'd never bet against it. Link to comment Share on other sites More sharing options...
fareastwarriors Posted August 7, 2013 Share Posted August 7, 2013 http://online.wsj.com/article/SB10001424127887323420604578650412719931232.html?mod=business_newsreel IBM Gets Allies to Chip Away at Intel Google, Others Join Effort to Break Big Blue's Power Designs Out of a Niche. International Business Machines Corp. IBM -2.31%has enlisted Google Inc. GOOG -0.93%and some other high-tech allies for a collective effort to catapult an IBM chip technology out of a shrinking niche. The alliance the companies plan to announce Tuesday would allow many companies to license IBM microprocessor designs—based on a technology dubbed Power—that are now only found in Big Blue's own server systems. Licensees could incorporate IBM-designed circuitry in their own chips, with members of the alliance working on related products such as servers, networking and storage devices, participants said. Other initial members of the group, called the OpenPower Consortium, include Silicon Valley chip maker Nvidia Corp., NVDA -1.48%the Israel-based networking-technology maker Mellanox Technologies Ltd. MLNX -0.92%and Taiwan-based Tyan Computer Corp., a server supplier that is a unit of MiTAC International Corp. 2315.TW -0.48% . The effort is the latest aimed at one of Intel Corp.'s INTC -0.54%key strongholds. The x86 chip design that Intel and rival Advanced Micro Devices Inc. AMD -2.62%popularized in personal computers thoroughly dominates servers—particularly machines sold for Web-based applications now being purchased in the greatest numbers. Research firm IDC estimates x86 servers in 2012 accounted for 98% of world-wide shipments and 70% of server revenue. .... Link to comment Share on other sites More sharing options...
Guest valueInv Posted August 7, 2013 Share Posted August 7, 2013 I have been holding IBM for 8 years. Bought it in the 70s. Not bad for a company that is not growing. Link to comment Share on other sites More sharing options...
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