Tuesday, November 15, 2011

Could Buffet be reading CCI ?????

Monday's news including this bit of info.

"Warren Buffett has broken the habit of a lifetime and disclosed that Berkshire Hathaway (BRK.A) has not only bought a 5.5% stake in IBM (IBM), it has also acquired 9.3M shares in Intel (INTC)" .

It is probably just one of those nasty Internet rumors,  but I'm "unbiasedly" willing to highlight that it seems like more than a coincidence that these are two of  CCI's  major positions as documented here and here.

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More seriously,  hopefully this news may drive some short-term demand for these stocks which would be great for our positions.  It is also probably somewhat of a
  • validation of the attractive valuation of these stocks
  • a recommendation for the role the business models of these two companies play in the infrastructure of the cloud.

This news also reminded me that I had not provided any q3 earnings update for IBM. Perhaps that was  because it was just another ho hum, make the number, and add to the recurring revenue backlog via long-term services contracts and software.  Their stated goal of $20/eps by 2015 seem to be more obtainable and even conservative.  A conservative multiple of 12 provides a  stock price of $240 and an aggressive multiple of 15 provides a stock price of $300.  Something like an 8-15% annual return over the next few years.   CCI will just do the good old fashion, buy-and hold on the IBM position unless it has a major breakout in which case some profit taking may be prudent.

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