Warren Buffett: People Have This Misconception That When We Buy A Stock, We Like It To Go Up

Warren Buffett recently completed 50 years at the helm of Berkshire Hathaway Inc. (NYSE: BRK-B). After all these years, the oracle of Omaha hasn't lost his knack of surprising market participants with his picks, something he demonstrated yet again when he increased his stake in International Business Machines Corp. IBM.

Buffett was on CNBC Monday to explain what led him to increase his holding in IBM.

IBM

When asked why he is buying more IBM shares, Buffett replied, "Because I like it."

He elaborated further, "It's a company that's been doing exactly what I like ever since we first started buying it. There were a billion, 160 or 170 million shares outstanding when we started buying and there were fair number of options out there, maybe 40 million shares or something like that. That overhang has been reduced significantly and the number of shares is now 990 million."

Related Link: 11 Key Quotes From Warren Buffett's New Shareholder Letter

Buffett reminded that when he started buying IBM shares, he had written to shareholders "that the best thing that could happen would be if the stock did nothing for five years because they were going to buy in a lot of stock and the cheaper they bought it, the more shares they bought."

Unhappy If The Stock Goes Up

Buffett also highlighted that, "People have this misconception that when we buy a stock, we like it to go up -- that's the last thing we want it to do. We are going to buy billion of dollars worth of stock in companies we like and if we buy $100 million worth of stock or $200 million and it goes up, I am very unhappy."