Warren Buffett's "Economically Illiterate" IBM Case Study

Warren Buffett displayed his "economic illiteracy" when he bought/sold IBM stock.

Here is what Warren Buffett wrote about share buybacks in his 2023 Annual Report to Shareholders: ​​"When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue . . . characters that are not mutually exclusive! [bolding emphasis in this statement is Warren Buffett's not this authors.]."

It would be this author's contention that "anytime" a writer uses the words "all" or "every" or "always" that the reader should raise their level of distrust . . . just a bit . . . to catch a possible misleading generalization. Rarely is anyone always or in every way, one thing or another . . . be skeptical and inquisitive.

​No, all repurchases aren't harmful, but historically some have been, and Warren Buffett—at one time—bought into IBM's share buyback strategy, and then got out. He should have used IBM as an example to ensure we all are not . . . economically illiterate!

Peter E. Greulich, February 28, 2023

Select the image or the icon below to read an IBM Case Study: Do Share Buybacks Work?

An IBM Case Study: Do Share Buybacks Work?