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IBM!?
#25
Bought in today for €146,43 - will add if big blue declines further
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#26
Just re-read this thread and thought it would be fun to dust off. We were debating IBM's merits when the share price was "hurting" in the $160s and $170. Well, here we are in the high $130s!

As I've held my shares (my average price is about $151, and it is not a large position), I've gotten more comfortable with the stock and with the financial engineering. Even if they never turn things around, shareholders can be greatly rewarded for years to come. Of course that's not true if your capital is decimated, but I'm more positive about their future than some.

On that note, I recently read this very interesting article about IBM's moonshots. This is not the basis for my optimism, but it is nice to daydream.

I'm considering adding some more to average down my price further still.
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#27
I'm with you, Kerim, on both your BEN and your iBM. Big fan of both companies and the management style.

Even with the changing businesses, IBM still has an infrastructural quality that I would imagine help cross sell other functions of their business.

Very nice raise from BEN too. Good times.
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#28
I have a full position already (avg $180...ouch), but would like to add more if the div hits 4%.

Ronn
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#29
International Business Machines (NYSE:IBM): Q4 EPS of $4.84 beats by $0.03.
Revenue of $22.06B (-8.5% Y/Y) beats by $20M.
http://seekingalpha.com/news/3037946-ibm...-estimates

IBM issues soft 2016 EPS guidance
IBM has guided on its Q4 earnings call for 2016 EPS of "at least" $13.50. Consensus is at $15.00.
http://seekingalpha.com/news/3038436-ibm..._1-percent
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#30
(01-24-2016, 11:29 AM)divmenow Wrote:
(01-24-2016, 10:00 AM)Kerim Wrote:
(01-24-2016, 12:49 AM)divmenow Wrote:
(01-22-2016, 02:28 PM)Kerim Wrote: Just added a little bit of IBM. I still think they are going to be fine long-term, and couldn't resist improving my average price per share.

Curious as to why you bought IBM? PC sales will be soft for a long time and they have a lot of competition in the cloud space. I get it. It looks cheap. Haven't seen these levels since 2009.  Nice dividend of course but could get cheaper as the tech sector has been out of favor since early 2015.

It could indeed get cheaper, but my crystal ball is still broken, so I'm not going to try to time the bottom or turnaround moment. I liked it at $150 and $140, so I love it at $123 and yielding 4.2 percent. Yes, this company could be doomed, but I personally don't think so. They are still very profitable, even with revenues declining. And the "financial engineering" that everyone sneers at works for me. IBM is not a core holding for me, and I'll watch it much more carefully than my JNJ, and I understand that I could be wrong. But the best buys are when everyone else is negative.

Good answer and GL

And right on cue comes Tim McAleenan with some wisdom:

Quote:Now, it is almost certainly true that business performance at IBM–especially the 25% decline in revenues–has been worse than Buffett anticipated or desired. But, at a price of $122, it really does not take much to go right for IBM to work out as an investment. It makes $13.25 per share, for a P/E ratio of only 9.2. It still makes $13 billion in annual profits, putting it at one of the thirty most profitable firms in the entire world.

(Exchange copied from the "What did you buy today" thread.)
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#31
(01-25-2016, 10:19 AM)Kerim Wrote: And right on cue comes Tim McAleenan with some wisdom:

Quote:Now, it is almost certainly true that business performance at IBM–especially the 25% decline in revenues–has been worse than Buffett anticipated or desired. But, at a price of $122, it really does not take much to go right for IBM to work out as an investment. It makes $13.25 per share, for a P/E ratio of only 9.2. It still makes $13 billion in annual profits, putting it at one of the thirty most profitable firms in the entire world.

That's why I read Tim.
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#32
I work in the tech industry and I'm afraid the future doesn't look good for IBM.
The entire IT industry is changing rapidly and everyone in the enterprise IT space is getting hit hard. The competition is fierce and it's a race to the bottom due to the Cloud. IBM doesn't really have a moat beside mainframe. There are quite a lot of competitive players in analytic space like Watson as well. General consumer population doesn't hear about them because they aren't the marketing target for these products.

Don't get me wrong, I think IBM will be fine and be around for a long time but it can never get back to its former glory days. The main problem is due to industry shift and there isn't much IBM can do about it. IBM is kind of like Intel in personal computer space except IBM has tons more competitors and less moat. The industry shifting has just started accelerating and it's definitely not over yet. Personally, I would wait until things bottom out no matter how cheap the stock is because it can always go cheaper.

I don't understand why 15 consecutive quarters of lower revenue doesn't cause a red flag. It's like KMI all over again.
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#33
I appreciate hearing the counterpoint. My feeling has been that IBM can leverage its existing relationships to bring the added services that it admittedly has a lot of competition for. For instance its recent ten year contract for Etihad airways. It can add AI and weather prediction to make flight patterns more effectively.
Also the blockchain. It already has deep relationships with banks. So it will now head the blockchain for bank data. So it is already in bed with them, and now it will further monetize the relationship with added services.
It has serious corporate partnerships with JNJ, MDT, and AAPL that AMZN may not really be able to get. It currently does the mainframe for the Post Office, CVS,
Warren Buffett was quoted as saying that the cloud isn't a winner takes all game, IBM could have a serious corporate part of the cloud that might be construed as more secure and still be pretty profitable.

Take a look at all IBM mainframe customers. Pretty serious list! I'd imagine they are already trying to cross-sell them all sorts of crap.
http://mainframes.wikidot.com/

Banks, insurance companies, airlines, even world governments...This is an infrastructure play.

Also AI, Watson, cognitive computing etc.
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#34
I've been remiss in withholding this video from the board: Go to minute 50 for the fun part. Keep in mind BRK owns chunks of WFC and BAC...Those pre-existing relationships will probably come in handy when everyone gets robots for customer service. Nice revenue streams for IBM.

https://www.youtube.com/watch?v=VEq-W-4iLYU
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#35
(02-03-2016, 03:14 PM)Dividendsrule Wrote: I've been remiss in withholding this video from the board: Go to minute 50 for the fun part. Keep in mind BRK owns chunks of WFC and BAC...Those pre-existing relationships will probably come in handy when everyone gets robots for customer service. Nice revenue streams for IBM.

https://www.youtube.com/watch?v=VEq-W-4iLYU

Thanks for the video -- entertaining. I'm not sure how impressed to be with "Pepper," as it is tough to discern how much of that was programmed and how much was really AI. For example, how did Pepper know when the conversation was finished and to say goodbye? Am I to believe that it read the cues of the discussion and intuited when to leave the stage? Or more likely that was pre-set? In any case, you make a great point about customer service bots and pre-existing relationships.

I'm still happy and comfortable with my IBM shares. I would not make it a huge or central position, but I believe that those shares will pull their weight in my portfolio over the next decade.
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#36
(02-04-2016, 01:52 PM)Kerim Wrote:
(02-03-2016, 03:14 PM)Dividendsrule Wrote: I've been remiss in withholding this video from the board: Go to minute 50 for the fun part. Keep in mind BRK owns chunks of WFC and BAC...Those pre-existing relationships will probably come in handy when everyone gets robots for customer service. Nice revenue streams for IBM.

https://www.youtube.com/watch?v=VEq-W-4iLYU

Thanks for the video -- entertaining. I'm not sure how impressed to be with "Pepper," as it is tough to discern how much of that was programmed and how much was really AI. For example, how did Pepper know when the conversation was finished and to say goodbye? Am I to believe that it read the cues of the discussion and intuited when to leave the stage? Or more likely that was pre-set? In any case, you make a great point about customer service bots and pre-existing relationships.

I'm still happy and comfortable with my IBM shares. I would not make it a huge or central position, but I believe that those shares will pull their weight in my portfolio over the next decade.

Valid questions, but I don't believe they would lie about Nestle increasing coffee sales via robot engagement. If a robot could win jeopardy, I'm sure it could interact pretty well with others. I know they have Watson in some children's toys where it adapts to the child's personality.
I'm optimistic too!Smile
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