Warren Buffett’s foray into IBM, acquiring a 5.5 per cent stake in the company, seems to defy his longstanding antipathy to investing in technology companies. But it depends on what the meaning of “technology company” is.
Mr Buffett’s main objection to technology has always been its unpredictability, as he explained in this discussion with Bill Gates in 1998, which was published by Fortune magazine:
“I look for businesses in which I think I can predict what they’re going to look like in 10 or 15 or 20 years. That means businesses that will look more or less as they do today, except that they’ll be larger and doing more business internationally.”
“So I focus on an absence of change. When I look at the internet, for example, I try and figure out how an industry or a company can be hurt or changed by it, and then I avoid it. That doesn’t mean I don’t think there’s a lot of money to be made from that change, I just don’t think I’m the one to make a lot of money out of it.”