Most people will never learn.
Sure, first of all it sounds nice because it's what a CEO is suppose to say and it's what investors want to hear.
"We're going to double our EPS in five years."
It's east to believe something that you want to hear. People will let their guard down and not question it.
It rewards you into believing that you are smarter than the rest and it provides emotional comfort.
Everyone's got their calculators out now doing a "happy dance" about how rich their gonna be.
Nevertheless let me remind you that there's thousands of people that were doing just that in 2000-01 when IBM was trading in the $130's and they have nothing to show for it - TEN years later. Nothing...
Regardless of how much EPS IBM generated over the last ten years that money went to the executives not you the shareholders. Don't fall into the trap of thinking that it's yours because you own the company or something - you really don't.
Just remember, especially over the last few years how many times did you hear the same so-called investment guru's and CEO's come out and tell you it was worse than expected?
How many of these fortune tellers were right on the money with their so-called expectations?
Secondly, IBM doesn't have enough USA workers left on the payrolls to layoff to double those revenues.
Thirdly, nothing was said about the expected inflation rate over the next five years. Should the USA have a Wiemar moment the actual doubling in dollars may not even keep pace with the inflation rate, so you are getting only half the story here maybe eh?
Sorry... this pie in the sky stuff is nice to dream about - but it's not reality. Ask any buy and hold IBM shareholder that bought in 2000 and held for ten years. Learn from their mistakes.
I'm betting that those numbers are VERY conservative ..
Sam is a button down guy , in the tradition of IBM leaders ..
always played close the vest .. no grandiose announcements
and plans .. just good hard work and the ability to adapt
and also lead in their field ...
anyone can pick a few time periods when the stock did not
perform well , but look at the history .. this company
has been a consistent winner and that's what actually
generates so much negative sentiments towards IBM ..
that and the sour grapes from workers would did not
achieve of receive wealth and glory commensurate with
their dreams ...
I worked at IBM for 32 years . Then drove through a snowstorm, 25 miles , to work one day , only to have my
mgr feel really bad about handing me the walking papers .
Very poor timing , I needed another 5 years , but by the
time I had driven back home(same snow storm) I was beginning to feel the cloud lift. By the next day , I
was over it and ready to move forward ...
I would still go over there and kiss the corner stone ...
they took me in just after I got fired from some rinky dink
outfit and it stuck ...
I got screwed a number of time , I also had a couple of
managers try to run me out the door(I was a little wilder
in my youth) . Took me five years to get my 1st promo,
others were nailing it 2 ... I was put in a dying operation
when hired, then moved to the new stuff , but I was the
new kid and kicked to curb a few times .
Some of my time there was miserable , BUT .. when I was
lying the beach in Bermuda, being paid double time, it
wasn't too bad. Neither was the time when I was collecting
double for lying on a beach in Florida .. had some other
good times too , met a few really decent folks , along
with a few subliminals ..
Just like life itself , IBM has good and bad .
I used to sign my notes:
"I complained that I had no shoes , until I met a man
who had no feet " ..
Life and your investments are what you make of them ...
blind yourself with emotion and you will continue doing
the same thing with expectations of a different result ..
later .... g
Well the Euro is now down to 1.2265 tonight so far - how do you like them apples?
What's is that about a little over 10 percent foreign exchange losses in just the last 15 days? I think so.
Japan's Nikkei is currently down 281 and China's Hang Seng is down 500.
Almost every single country is tightening spending because we have this global melt down caused by loss of ethics and morality in the corporate world.
We're out of ammo kiddo. No trillion dollar bailout silver bullet is gonna restore confidence.
So go right ahead and you stay emotionally attached to the memories of what was instead of realizing what will be.
sure and there's people that bought during the "trading glitch" too and made money.
However it had little to nothing to do with IBM.
High frequency trading bots that can drop the DOW over 1,000 points in the blink of an eye. Liquidity going to zero just like last Thursday.
This stock is not immune. No stock is. Wall Street has become a casino with no social redeeming value - no stop loss order is going to protect you either.
There's a lot of talking heads in the media that constantly tout that Wall Street ROI averages 10% over the long term - that you should buy and hold and not try to time the market because timing the market is for losers.
Nevertheless IBM traded in the $130's in 2000-01 and is not any better today. Hell a 7% ROI you're suppose to double your money in ten years.
You follow these stock analyst and CEO's advice, according to them IBM should be at $260. HA, that's not going to happen anytime soon. Not unless the cost of milk and bread goes to $30.00 and then what does it really mean?
IBM is in it's final throes to steal a Dick Cheney expression. It's last heyday was the y-2-k scare and they will NEVER top that again. I don't care how many patents they claim or how many USA workers that they have left to terminate.
"Secondly, IBM doesn't have enough USA workers left on the payrolls to layoff to double those revenues"
You dumbarse, who said anything about doubling revenues? IBM is going to make those nbrs by cost cutting and share buybacks. Yes, revenue will have to increase as well, but not that much.
What a tool you are.
"Nevertheless let me remind you that there's thousands of people that were doing just that in 2000-01 when IBM was trading in the $130's and they have nothing to show for it - TEN years later. Nothing..."
Well, jeez, that's because after Sept. 11 2001 those thousands sold their stock to go buy guns, ammo, and surgical masks and moved off the grid to be ready for the next wave of attacks.
The rest of us? We're doin' OK.
Here is my reason to believe what the CEO says. Back in 2007 he said IBM is going to buy-back shares (totaling in tens of billions) and will achieve an EPS of somewhere around $10 by 2010 - something he achieved much before time (it's now expected to be near $11) - and that too when the market had one of the worst hit since the last depression! Now that is what I would call a confidence and an strategy to be proud of. Of course nobody has seen the future - for all you know we may have an earthquake or a tsunami and the entire world economy may collapse tomorrow, let alone predicting what will happen five years from now. But given what we can humanly project based on current data, I can easily believe $20 EPS by 2015. Actually I believe it's easily achievable and they could easily beat it as well.
Now whether that translates into a doubling or tripling of the share price or not is anyone's guess. But it is sure to give something to investors - confidence, a commodity lately missing in most equities!
Also remember, when most companies of similar sizes (including among the giants) tanked almost near their graves, IBM had one of the best performances in this recession. Of course there are always better examples, but as far as IBM is concerned, I don't have a doubt what they say if they follow through their plans.
As for the number of US employees, well this is capitalism at its best. IBM, like any other company, has no responsibility to provide jobs to people it doesn't seem competitive enough. It, like most other corporations, hires people to make profit and if that profit can come better from outside the USA, or even outside the Solar System, so be it. Just as we buy the cheapest product on the shelf in market, corporations around the world go after employees who can do the same job at the least cost. This is how it has always been and this is how it will always be. The other option is a government job.
By the way look at the following competitors (of the similar sizes and in similar businesses) for their past 10 year performances (Jan-2000 to today):
Hope this convinces you why people invest in IBM. I do and am proud of it. I'm not a millionaire but have weathered the recession without much hassles thanks to investment in IBM.