IBM – A value buy or trap?

Sometime back my friend Hari and I presented a case study on IBM to my first batch students. You can view the presentation here. If you want to educate yourself on the business model of IBM then you should read this and this. While preparing for the presentation I came across an excellent video from Warren Buffet which is given below. If one of your stocks crashed by over 50 percent recently and you never knew why you bought the stock in the first place then Buffett has a solution for you. Read it a couple of times.

You really shouldn’t ask other people’s their opinion about stocks because lets say I give an opinion on the XYZ company I could change my mind a week from now on. You ought to have your own reasons for buying a stock. If you don’t then you are going to get shaken out by some event. The stock market is going to go down a lot or you are going to read some negative comment. You should make your own judgments in stocks. We always made our own judgments in stocks. You should make your own decisions. If you don’t feel capable making your own decisions which is fine then you should buy an index fund. It’s that simple. – Warren Buffett