Well it appears I was quoted over at another major news publication, Canadian Business. To read the article click below.
I must apologize... I have been very busy with work lately and haven't been able to post. In short I am transitioning into a new role back at the parent company from a subsidiary. I have really enjoyed my time at the subsidiary as it was much smaller (than the parent) and working through the unique business challenges we faced has definitely helped me become a better investor.
One key point I have learned is how sticky business and business relations are. Things don't change drastically over time. In fact many companies resist change because of fear of the unknown. For example, if you changed suppliers how can you trust the new products, quality, or service? From this perspective you can see how Warren Buffett likes the stickiness of IBM. IBM's competitive advantage is the relationships they have built with hundreds of businesses around the world.
Speaking of IBM, shortly after Buffett announced his purchase of IBM stock he also mentioned one other detail. It was that he read the book, Who Says Elephants Can't Dance? Inside IBMs Historic Turnaround by Louis V. Gerstner Jr., not once but twice before buying the stock. That was I needed to hear so I quickly got my hands on the book.
The book is an account of some of the steps Mr. Gerstner took to save IBM. Back in 1992 IBM was on the brink of failure, bleeding cash, and left for dead by wall street. Kind of sounds like Blackberry, except Blackberry isn't even close to losing money yet. Basically, IBM became a victim of their own success and seemed unwilling to adapt to the changing computing world.
The most interesting fact in the book is Mr. Gerstner's background. It is definitely not what you'd expect for a CEO of a computing giant. He had worked for McKinsey & Company (consulting), American Express, and finally was the CEO of RJR Nabisco before coming to IBM. Although he was educated in engineering he went straight into Harvard for an MBA and had zero experience in computers, software or IT.
Despite his unusual background Mr. Gerstner did turned transform IBM into one of the most successful IT companies in the world prior to his retirement in 2002. He transformed not only their competitive position but radically transformed the culture to become customer centric and customer focused. These and many other good leadership principles are discussed in the book.
Anyway, I have been working on a few new posts and how to be back soon with some good new content and discuss some stocks for the year ahead.
Happy New Year!
Disclosure - I own shares in BRK.b, thus I indirectly own shares in IBM.