IBM shares affects Berkshire Hathaway portfolio value

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One of the cornerstone investments that Warren Buffett's Berkshire Hathaway is in International Business Machines or IBM. The rapid decline of the share values of IBM, a high of 8.3% last Friday or a share value of US$190 per share has hit hard and hit home for the private equity icon.

The reason for the decline is the disappointing first quarter revenue report of the blue chip company. As of the latest portfolio filing, Berkshire Hathaway has owned 68.1 million IBM shares as of December 2012. The decline in the share values, assuming the share stake remains the same has declined to US$12.94 billion or a net loss of US$1.168 billion.

This though is a paper projection of share values, as there is no real money lost until the shares actually sold in the market. The large value lost is about half of Berkshire's profits on paper on the IBM stock when it started purchasing the shares in 2011.

This though does not faze Buffett at all, since he is well-known to utilize a buy and hold strategy regardless of the market winds buffetting the share values.

Tags
IBM, Berkshire Hathaway, Warren Buffett

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