Why This Bear On IBM Is Moving Toward A Bullish Posture


Background: It is in the nature of strong bull markets that market leaders become laggards for fundamental reasons, then play catch up due to P/E expansion. If corporate fundamentals then turn, the bears look silly and the faithful say they knew it all along. A prominent name that might be getting ready to play that role is International Business Machines (IBM). Maybe.

One of several reasons is contarianism. A well-known tech stock analyst, Fred Hickey, has joined a very non-prominent commentator (me) in bearishness on IBM as a participant in the recently-published Barron’s mid-year Roundtable. Mr. Hickey took his bearishness to such a level that he announced he was short IBM. I commented on this in a recent InstaBlog.

Not long before that, I wrote an article in Seeking Alpha, pointing out that a former media fan of IBM, Bloomberg News, was now running overtly negative

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