IBM GIVING BUFFET ANOTHER CASE OF BIG BLUES

ORACLE NO MORE

Warren Buffett, one of the world’s richest men with an estimated net worth of $73 billion, has been called the “Wizard of Omaha” or “Oracle of Omaha”, or the “Sage of Omaha” because of his supposed investment infallibility. Wall Street and Madison Avenue, which nicknamed his as such, may want to rethink these lofty epithets in view of his recent investment failures.

Buffet had a couple of billion-dollar loser days in October, and so far January isn’t going much better for him either. In each case, two of America’s iconic corporate darlings let him down – IBM and Coke. 

IBM’s 3.6 percent drop in early trading Wednesday cost the “Oracle of Omaha” some $397 million, based on his 70,478,012 shares as of September 30, the CNBC reported today (His end-of-year holdings won’t be public until mid-February).

On Oct 20, IBM stock drop cost him about $1 billion on paper. The next day, Coca-Cola‘s tepid results cost him another $1 billion.

What’s a billion here, a billion there… if your net worth is $73 billion, right?

Well, it’s not just the billions. It’s the punctured “oracle” aura that hurts more.

Oracle of Omaha? No more. At least not on Wall Street. Maybe Buffet should stick to corn?

IBM’s Feet of Clay Led to Death by Thousand Cuts

Meanwhile, I would not have been aware of any of that had an old friend of mine, a former fellow-IBMer, not alerted me this morning about the IBM news.

“I’m sure you saw the stock price hit on IBM today….” he wrote.

I replied:

“Actually, no, I had not seen the latest IBM price drop until you brought it up just now. I don’t follow the markets closely anymore. 

I gave Ginni’s (Rometty) IBM the first warning with this story –  Big Blue Feet of Clay, Apr 2012.  And then gave it its last rights and put the nail in its coffin with this one: IBM in Troubled Waters Again (Historical analysis of IBM ebbs and flows; long term outlook and recommendations for change).

Ginni responded to my Feet of Clay piece with a personal note agreeing with me and saying how she would be working hard on getting IBM to grow again. Well, three years later… 

RIP, as I said.”