Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have a peculiar history with this company, so let us put our cards on the table. Warren bought IBM for Berkshire in 2011, attracted by an entrenched customer base, a shareholder-friendly buyback machine, and a management roadmap full of confident five-year EPS targets. We revalued our thesis around 2017 and exited at roughly breakeven while the rest of our portfolio compounded. The lesson we paid tuition for then is the same lesson on offer today at a 25% discount: an entrenched legacy franchise is not the same thing as a durable competitive advantage, and a cheap-looking multiple on a slow-growth, debt-carrying, acquisition-dependent business is not the same thing as a margin of safety. Six weeks ago the market briefly priced IBM at $329 per share — nearly 22 times free cash flow for a business whose organic engine grows in the low single digits.
Recent filings analysed: 8-K (2026-08-14), FWP (2026-08-10), 10-Q (2026-07-23), 8-K (2026-07-22).
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