WORLDVIEW: Having a New Look at one of our SA portfolio’s cornerstones

By Alec Hogg

I just love stocks that reward patience. Because there seems to be so little of it in this speeded up world. My favourite are companies taking strategic bets, the long-term decisions Mr Market just hates. These investments often require conviction and the occasional dose of stamina. But the reward is often handsome.

Photo credit: Kansir / Foter / CC BY

A recent example is IBM which we bought in December 2014 when launching the Biznews Global Share portfolio. I loved it that the world’s dominant computer hardware business was boldly refocusing into new growth areas. At our purchase price of $162.50, the shares delivered a good margin of safety (my intrinsic value is over $200) – plus we were paying way less than $170.50 at which Warren Buffett had invested $13bn. IBM is one of Berkshire’s Big Four holdings.

It hasn’t all been plain sailing. A year ago, IBM’s share price bottomed at $121. That brought newspaper headlines shouting about Buffett’s investment “losin...

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