IBM - Nears my 133 Downside Target

Written by MrStockFox. Posted in Trade Ideas

Back on September 7th I stated that it was very likely that IBM fall into the low to mid 130's.  My ultimate downside target is around 133.  Today we are very close to hitting my final downside target and with that I plan to really step up my purchases on IBM.  Today I added 3 shares and next week as we near my target I plan to buy an additional 10-15 shares.  There is no doubt about it, IBM is cheap.  Here are 2 great articles on IBM that I highly recommend. 

Munger on IBM: Thank God We Got A Good Price

Retirees: I Did Not Buy IBM To Sell; It's About The Dividend Income, Stupid

If you check out the comments section on Chuck's article above, its truly amazing to see how negative everyone is on IBM.  Yes IBM's topline is down over the last several years but IBM still mints money.  Here are some of my favorites:

  • So what makes 3% dividend income so attractive when the principle drops 20%? I'll take my stupid money elsewhere. Retirees shouldn't be enduring 20% drawdowns. Doesn't make for a happy retirement in my book.
  • Hey stupid, if you just want income and a safe (diversified) investment try a CEF. IBM is fat old tech and can't dance. It is surviving on buybacks/cost-cutting and headed to the basement.
  • I respect Chuck's opinion, but in this instance I have to disagree with his conclusion. IBM appears to me to be going the way of DEC, Lotus, and Kodak. Woops didn't IBM buy Lotus? Amazing how a company with 35 billion in debt and zero equity can have an AA- credit rating.
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