And I just came away with a different view of the position that IBM holds within IT departments and why they hold it and the stickiness and a whole bunch of things. And also, I read very carefully what Sam Palmisano...said about where they're going to be and he's delivered big time."
Some of the above is vague -- indeed, many of Buffett's comments in the interview are -- but really what he's talking about is IBM's effective long-term planning, stability and consistency:
"[I]f you read their reports—if you read what they wrote five years ago they were going to do and the next five years, they've done it, you know, and now they tell you what they're going to do in the next five years, and as I say, they have this terrific reverence for the shareholder, which I think is very, very important."
Buffett essentially sidestepped questions about whether he intended to invest in other tech stocks, but I'll answer for him: No. Well, maybe Oracle at some point, but don't count on Berkshire buying large positions in, say, Microsoft, HP or Google any time soon.
He uses his friendship with Bill Gates as an excuse why he won't touch Microsoft shares, but you have to think that Redmond's slow-footed response to emerging technologies over the past few years, not to mention the gradual disintegration of its core business (computer software), are the real disincentives for Buffett to invest in the FUD kingdom's future.
(Also, could anyone possibly watch this video and say, "Hey, you know what? I want to invest $10 billion in the company run by that guy!")
And HP? Compared to IBM, HP is a train wreck. (In fact, compared to a train wreck, HP is a train wreck.) The company is on its fourth CEO since 2005 and lurches from one strategy to another (and sometimes back again).
As for Google, who can predict with any certainty where Google will be 10 years from now. It could be the next Yahoo. Or Myspace. That can happen to an Internet company because, as Buffett would say, there's no "moat" to ward off competition. Allegiances to websites and services can be fleeting, and the cost of conversion low to non-existent. Try to build an enduring business in that environment.
That he's already seen a 12% gain in his investment in IBM probably means little to Buffett because he's in this for the long haul. And he sees Big Blue as the tech firm best-positioned for long-term success, regardless of its current stock price. It's hard to argue against him.