Did IBM Watson Ask Warren Buffet about Value?

May 19, 2017

I read “$4 Billion Stock Sale Suggests Warren Buffett’s Love Affair with IBM Is Over.” The subtitle caught my eye. What would Watson think about this statement:

Berkshire Hathaway’s founder Warren Buffett has admitted that buying IBM shares was a mistake. He has sold 30 percent of his 81 million shares because the company failed to live up to the expectations it held in 2011.

If I had access to a fully functioning (already trained) IBM Watson, I would ask Watson that question directly.

Last night I was watching the NBA playoff game between the technically adept Houston team and the programming-crazed San Antonio team. There in the middle of a start and stop game was an IBM Watson commercial.

Let me tell you that the IBM Watson message nestled comfortably amidst the tats, the hysterical announcers, and the computer-literature crowd.

IBM has a knack for getting its message out to buyers with cash in their hands for a confection of open source, home brew, and acquired technology.

Why doesn’t Warren Buffet get the message?

According the the write up, Mr. Buffet explains what message he received about IBM:

… IBM “hasn’t done what, five or six years ago, I expected would happen – or what the management expected would happen, if you look back at what they were projecting, and how they thought the business would develop. “The earnings have been obviously disappointing. I mean, five or six years ago, I think they were earning $20+ billion pre-tax and maybe it’s $13 billion now, and I don’t think the quality of the earnings has improved. “It’s been a period when it’s been tougher than they thought and it’s been tougher than I thought. But I was wrong. I don’t blame them. I get paid to make my own decisions, and sometimes they’re right and sometimes they’re wrong.

Interesting but not quite as remarkable as smart software being advertised to NBA fans. Air ball.

Stephen E Arnold, May 19, 2017

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