From The Daily Beast:
Warren Buffett's Tarnished Halo
by Charlie Gasparino
As reputations go, Warren Buffett’s was Teflon. Charlie Gasparino on how his deputy’s strange trading profits reveal the Oracle of Omaha as—gasp!—another overambitious businessman.
The Securities and Exchange Commission is now “kicking the tires” on the bizarre news that David Sokol, Warren Buffett’s heir apparent to run Berkshire Hathaway—a guy who manages two large companies for Buffett, among many other duties—has a little job on the side in trading large blocks of stock, including shares in one company he helped convince Buffett to buy....
But I can tell you that this entire episode shows why investors and the media should stop portraying Warren Buffett as a saint, who never lies, cheats or equivocates and surrounds himself with similar heavenly characters. Instead, Buffett should be seem for what he is: A great investor and businessman motivated by greed and ambition and like his unheavenly deputy.
If this weren’t Warren Buffett, the immediate fallout would be greater. Consider the following: Sokol bought 2,300 shares of a stock in a company called Lubrizol in mid-December 2010, sold it a week later, then made a massive bet by snapping up close to 100,000 shares in early January when the company was trading around $110 a pop. That’s an $11 million position, which is huge even for the most sophisticated individual investor.
Like I said, Sokol also runs two companies for Buffett, MidAmerican Energy Holdings and NetJets Inc., so you have to wonder where he has all the time to moonlight as a day trader...
Buffett’s halo has been dimming for some time. He tried to downplay the role that rating agencies played in missing the financial crisis while he owned a chunk of one of the biggest raters, Moody’s Investors Service. He stood behind Goldman Sachs CEO Lloyd Blankfein despite general sleaze at the firm, while he boasted that he was earning $15 a minute, on his ownership stake in Goldman...
http://www.thedailybeast.com/blogs-and-stories/2011-03-31/warren-buffetts-halo-tarnished-by-david-sokol/
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.