Berkshire
UPDATE: The Berkshire Hathaway annual was live when we published the post below, and the Wall Street Journal really was the best source for live coverage during the day. In fact, not only because of the content, but also because of the mobile/smartphone-friendly page. We hope this source was useful for our readers, and expect to post here links to the best post-meeting coverage and analysis.
The Berkshire Hathaway annual meeting is still under way and so far the best source for live-blogging coverage is the Wall Street Journal. Enjoy!
http://blogs.wsj.com/deals/2011/04/30/live-blog-the-berkshire-hathaway-annual-meeting/
The Audit Committee of Berkshire Hathaway has just concluded its report regarding Dave Sokol’s trading in Lubrizol shares. They found that “Mr. Sokol’s conversations with Mr. Buffett and others at Berkshire Hathaway were ‘intended to deceive’ and ‘its effect was to mislead.’ ” Now that the “hype” is unprecedented in terms of a Berkshire “conflict”, and that the noise levels are bound to get even higher, it’s important to try and separate what’s relevant.
Two updates to our posts: ONE – Carl Icahn really didn’t like at least one sentence in the NYT story we posted a few days ago – and wrote an “instant classic” of a letter to the editor. TWO – Stanford CG professors organize the Dave Sokol resignation issues and ask relevant questions in an 11-page PDF.
Much has been said and written in the days since the Dave Sokol story broke – most of it noise, speculation, personal attacks and so on. But there are some valid criticisms, questions and at least one new piece of relevant information in Andrew Ross Sorkin’s story today in NYT’s Dealbook. The new info seems serious: apparently Mr. Sokol bought shares one day “after he told Citigroup to indicate Berkshire’s interest in buying the company”.
Dave Sokol, CEO of MidAmerican and Netjets (both Berkshire Hathaway businesses) and heir apparent to Buffett’s CEO role, has left Berkshire and one of the reasons doesn’t smell too good. Reading the letter from Buffett discussing the resignation, it’s clear that he had to go: the mere appearance of a Berkshire “luminary” practically “front-running” Buffett and Berkshire would be unacceptable (we don’t like it but can’t call it, and we’d discount any strong opinion emanating from anyone other than Buffett or Sokol).
The WSJ published a story about the possible tactics that Buffett used in the Lubrizol acquisition. This part sounded like music to our ears: “(…) Buffett undoubtedly told Lubrizol that he would refuse to participate in an auction. And here is where you see Buffett’s cleverness at work. He puts his targets in a dilemma that really only has one answer: take the price that looks very good or let Buffett walk away. Buffett’s real genius is a mix of these tactics and his ability to identify undervalued companies combined with the courage to act quickly on his analysis. That mix has been a recipe for big profits for Berkshire.”
Berkshire’s new acquisition looks like a logical extension of his Burlington Northern acquisition, in the “picks-and-shovels” realm of the Logistics sector. Bonus: our most loyal reader sent us the transcript of Buffett’s June 2010 testimony at a hearing of the Financial Crisis Inquiry Commission. You can always send us suggestions, links and texts at editor@buysiders.com.
Warren Buffett recently participated in CNBC’s annual “Ask Warren” 3-hour interview, and it’s never a waste of time despite the CNBC’s focus on shorter-term issues. In fact, this year brought a very funny exchange about gold, highlighted in this post. The whole 60-page transcript is embedded inside.
We set time aside one Saturday per year to read Warren Buffett’s letter, and the one for 2010, due out tomorrow, is bound to be very interesting. The Wall Street Journal and the Financial Times both published stories about what to “expect” from the letter. While the WSJ story focuses on numbers and the power of “float” in Berkshire’s business model, the FT’s piece focuses on succession.
