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Warren Buffett: High-Tech Especially Hard to Predict



(p. 1D) Turns out that Warren Buffett spoke out in IBM's favor, sort of, 37 years ago when the government accused "Big Blue" of illegal
anti-competitive practices.


. . .


But Buffett was one of 87 witnesses who testified on behalf of the International Business Machines Corp. during the federal government's antitrust trial.


. . .


In his testimony, Buffett said he asked the Price, Waterhouse accounting firm to calculate the debt levels of 104 other computer-oriented companies that, according to federal prosecutors, were harmed by IBM's low prices and other alleged anti-competitive actions.

Buffett said his hypothesis was that the competing companies had trouble raising money to finance their growth because they had too much debt. The accounting analy-(p. 2D)sis, Buffett said in court, "bore that hypothesis out in a very conclusive manner."

So why didn't he buy IBM stock in 1980?

Because, he told the court, with high-tech companies it's "particularly difficult to have a clear view of a long-term future. ... High-technology companies are ones where both the product and the customer's use of it are (areas in which) I don't feel I have a full understanding."



For the full commentary, see:

Steve Jordon. "WARREN WATCH; What Buffett said in court about IBM in 1980." Omaha World-Herald (Sun., Jan 22, 2017): 1D-2D.

(Note: ellipses added.)

(Note: the online version of the commentary has the title "WARREN WATCH; What Warren Buffett said in court about IBM in 1980.")






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