Warren Buffett buys IBM stake with $10.7bn

Warren Buffett - one of the world\'s most closely watched investors - has disclosed building a 5.4% stake in IBM.Mr Buffett\'s Berkshire Hathaway fund started buying shares in the firm in March, eventually spending around $10.7bn (£6.7bn).The billionaire had steered away from technology firms in the past.However, he said that he had been impressed by IBM\'s road map for how it planned to attract IT firms outside the US to sign up to its services.\"If you\'re in some country around the world and you\'re developing your IT department you\'re probably going to feel more comfortable with IBM than with many companies,\" he told the US television station CNBC.He said he started buying the stock after he read IBM\'s 2010 annual report and spoke to technology professionals in the businesses his fund had already invested in.He said he realised there was a lot of \"continuity\" in the US-headquartered business.\"It is a big deal for a big company to change auditors, change law firms, or change IT support,\" he said.\"There\'s a fair amount of presumption in many places that if you\'re with IBM, you stay with them.\"Mr Buffett said he had not told IBM\'s chief executive, Sam Palmisano, about the investment before announcing it on TV. He added that he does not plan to increase his stake which was why he was comfortable talking about it.Until now the US bank, State Street, was the biggest known investor in IBM by a clear margin. A September filing revealed the lender owned 5.5% of of the firm.When asked about other investments Mr Buffett noted that he would never buy stock in Microsoft because of his friendship with the company\'s founder and chairman Bill Gates.Mr Buffett\'s actions are closely monitored by other investors because of his track record for spotting and buying undervalued stocks. However, IBM\'s shares only rose slightly after the broadcast.\"He is looking for a business that will have double digit bottom line growth and will be reasonably stable in good times and bad,\" Louis Miscioscia, managing director at financial advisors Collins Stewart, told the BBC.\"That is what IBM shares offer, bearing in mind their software and services business is very consistent.\"IBM said it is not commenting on the news at this time.