Warren Buffett says owning IBM shares could be a mistake

Warren Buffett and IBM Shares

Warren Buffett, chairman and chief executive of Berkshire Hathaway appeared on CNBC on Monday and said owning IBM shares could prove to be a costly mistake.

“We’ve owned stocks that we’ve lost money in,” said Buffett. “If I’m wrong, you sell them out and take a big loss. We’ve done that on a few occasions with stocks and bonds over the years.”

Berkshire held an 8.59% stake in IBM as of Dec. 31, 2015. In its annual shareholder letter on Saturday the company said it planned to keep that stake despite a $2.6-billion paper loss at the end of last year.

Buffett told CNBC that he didn’t believe he has been wrong for owning IBM shares so far, but said it “could be” a mistake.

The Oracle of Omaha has been wrong on occasion. In 2014 his company’s ownership in Tesco PLC was characterized as a ‘huge mistake.’

“I bought Tesco, it went down, and it kept going down, and I was wrong about the company,” Buffett said on Monday.

Buffett notes that business has been “softer in many places” than he anticipated five months ago. He is still convinced that stocks will advance over time.

“We have bought more stocks since the end of the year,” he said.

Buffett also weighed in on Apple’s fight with the FBI.

Buffett believes privacy should trump security in smaller cases, but security should trump privacy in major cases.

“If there is something major, something that the Attorney General or the head of the FBI would be willing to sign and go to a judge on and say, ‘we need this information and we need it now,’ I would be willing to trust that official,” he said.