Warren Buffett just bought $11b IBM stocks, his first ever try on "Hi-Tech". Are you going to buy Facebook and GroupOn?

IBM decided then to focus on the high-margin areas of software and technology services and move away from computer hardware from 2002 to 2005. The shift is important because it has allowed IBM to ride two recessions. When times are tough, businesses pay IBM to help them find ways to cut costs and handle technology chores that would be more expensive to perform in-house.

"Now they're very much a services company, and they're very intertwined with their customers," Buffett said. And he said IBM's customers are reluctant to change once they start working with IBM.

Once time Buffett said: "I'll tell you why I like the cigarette business. It cost a penny to make. Sell it for a dollar. It's addictive. And there's a fantastic brand loyalty."

IBM is making itself like a cigarette business today ...