Does Warren Buffett buy a stock because it’s a good investment, or is it a good investment because Warren Buffett buys it? Generations of Mr Buffett’s admirers have been wary of tech stocks because The Oracle was. But now Berkshire Hathaway has bought more than 5 per cent of IBM.

This turnabout makes sense at several levels. IBM has the financial and operational characteristics that Mr Buffett favours. IBM generates oceans of free cash flow ($80bn between 2005 and 2010) and allocates it in shareholder-friendly ways ($82bn in buy-backs and dividends over the same period).

IBM has achieved this, and grown net income by nearly 90 per cent, while hardly expanding its asset base at all. The move into services – now well over half of revenues and the chief legacy of departing boss Sam Palmisano – makes IBM relatively stable. As new business technologies emerge, IBM’s global network of consultants simply help their customers install and use them. And IBM’s cash generation means it also has a war chest for acquiring cutting-edge technologies.