Munger on IBM: Thank God We Got A Good Price

In 1999, IBM sold $82.5 billion worth of tech stuff around the world. This year, it is going to sell $82.5 billion worth of tech stuff around the world. The revenue peaked to $101 billion in 2011, and has come down rapidly as cheap cloud storage solutions have found a place in the heart of corporate America over hardware with ongoing maintenance courtesy of IBM.

And yet, the profits generated over that time period has increased by quite a lot over this sixteen-year time period. IBM made $6 billion in net profits back in 1999, and it makes over $14 billion in net profit now. The earnings per share growth has been much better over the past sixteen years, climbing from $3.72 in 1999 to $14.25 now. It’s hard to ask for much more than an investment that quadruples earnings over a sixteen-year stretch.

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