4 ms·

The Party’s Over for Buffett

21 points by ph0rque 16y ago

dr_ 16y ago
How is the party over? Buffett, later than he probably should have, admitted that Sokol's transgressions were unacceptable, and now Sokol is gone. Ultimately this is not going to have an impact on Berkshire's bottom line or share price. The stock was never really the "darling" of Wall Street because Berkshire never catered to analysts.
thematt 16y ago
That's one overly dramatic title. Buffett has navigated far worse situations in his business career. Look at what he went through with Solomon. That situation actually had the potential to sink his entire company. Buffett may have lost a successor in this case, but it hardly spells the end of him or Berkshire.
- sigil 16y ago
  > Buffett has navigated far worse situations in his business career. Look at what he went through with Solomon. Absolutely. Or, to a lesser extent, the Buffalo Courier-Express antitrust case back in the 70s. Buffet's "go honest early" policy is yet another brilliant long term strategy that seems slightly crazy / ruinous in the short run. For anyone interested, this book was a good read: http://www.amazon.com/Buffett-American-Capitalist-Roger-Lowenstein/dp/0385484917 http://www.amazon.com/Buffett-American-Capitalist-Roger-Lowe...
pbreit 16y ago
What a terrible article. The guy got fired! Isn't that sufficient? Buffett has always railed against the ridiculous processes that cripple other companies. Why would or should he behave differently?
- thematt 16y ago
  He wasn't fired, he resigned.
  - tsotha 16y ago
    Semantics. When your boss asks you to resign, you've been fired.
    - thematt 16y ago
      Normally, yeah, it would be semantics. Except in this case Buffett gave the appearance of being soft on the situation up until the audit committee at Berkshire released the damning report against Sokol. I believe this article is drawing the connection between the way Buffett manages and the problems that could create for shareholders down the road.
jrockway 16y ago
All I got out of this article is that Buffett is kind of old and will probably die someday. I guess that means the party will be over someday, but it's not really newsworthy because pretty much everyone dies.
corin_ 16y ago
The article talks as if this one act of misconduct (which we only know about because Buffet announced it) proves that Buffet is always letting stuff like this happen, which frankly there's no evidence of whatsoever. The only piece of the article that could be used to justify the bait-headline is the fact that he is growing old and can't live for ever - in fact, that was the only statement in there worth making at all. Not exactly grounbreaking journalism to reveal that a man who is 80 years old won't be able to keep doing his job for the rest of eternity. Frankly, I expect better of the NY Times.
sbaqai 16y ago
Here's a direct link to the audit committee report: http://www.berkshirehathaway.com/news/APR2711.pdf http://www.berkshirehathaway.com/news/APR2711.pdf The NYT article is inflammatory, makes factual errors, and is even a bit trollish at times. A simple analysis or opinion piece would have been fine. "Since then, Buffett has been subject to criticism of a kind he has never before faced." “'It makes you question Warren’s judgment,'” - author who happens to have a new Warren Buffet book out. "What moved him to pre-emptively clear Sokol, who had so clearly violated Berkshire’s code of conduct, of wrongdoing? What does that tell us of possible flaws in Buffett’s character?" "He often buys companies with very little due diligence;" "His board is made up primarily of cronies" Yeesh
- fleitz 16y ago
  "He often buys companies with very little due diligence;" that doesn't sound like Buffet at all. If everyone who bought stock, CDSs, and other complex financial instruments did as much diligence as Buffet everyone in finance would still think a TARP is something you use to protect things from the elements.
natural219 16y ago
I was at the shareholder's meeting. Several of the initial questions were about the Sokol incident, and many were hostile toward's Buffet's response (especially his initial press release). Buffet answered every question clearly and confidently, tracing his line of reasoning in terms of the information he knew at the time. I don't think the image presented today by Buffet and Munger is consistent with the conclusion that Buffet is reeling from a "serious dent in his pristine image."
deleted 16y ago
[deleted]
joeycfan 16y ago
During the dot com bubble I read an article in Baron's claiming it was time for old Warren Buffet to be put out to pasture for missing out on this good thing. This is another such mistake.

21 points by ph0rque 16y ago

dr_ 16y ago

How is the party over? Buffett, later than he probably should have, admitted that Sokol's transgressions were unacceptable, and now Sokol is gone. Ultimately this is not going to have an impact on Berkshire's bottom line or share price. The stock was never really the "darling" of Wall Street because Berkshire never catered to analysts.

thematt 16y ago

That's one overly dramatic title. Buffett has navigated far worse situations in his business career. Look at what he went through with Solomon. That situation actually had the potential to sink his entire company. Buffett may have lost a successor in this case, but it hardly spells the end of him or Berkshire.

sigil 16y ago
> Buffett has navigated far worse situations in his business career. Look at what he went through with Solomon. Absolutely. Or, to a lesser extent, the Buffalo Courier-Express antitrust case back in the 70s. Buffet's "go honest early" policy is yet another brilliant long term strategy that seems slightly crazy / ruinous in the short run. For anyone interested, this book was a good read: http://www.amazon.com/Buffett-American-Capitalist-Roger-Lowenstein/dp/0385484917 http://www.amazon.com/Buffett-American-Capitalist-Roger-Lowe...

pbreit 16y ago

What a terrible article. The guy got fired! Isn't that sufficient? Buffett has always railed against the ridiculous processes that cripple other companies. Why would or should he behave differently?

thematt 16y ago
He wasn't fired, he resigned.
- tsotha 16y ago
  Semantics. When your boss asks you to resign, you've been fired.
  - thematt 16y ago
    Normally, yeah, it would be semantics. Except in this case Buffett gave the appearance of being soft on the situation up until the audit committee at Berkshire released the damning report against Sokol. I believe this article is drawing the connection between the way Buffett manages and the problems that could create for shareholders down the road.

jrockway 16y ago

All I got out of this article is that Buffett is kind of old and will probably die someday. I guess that means the party will be over someday, but it's not really newsworthy because pretty much everyone dies.

corin_ 16y ago

The article talks as if this one act of misconduct (which we only know about because Buffet announced it) proves that Buffet is always letting stuff like this happen, which frankly there's no evidence of whatsoever. The only piece of the article that could be used to justify the bait-headline is the fact that he is growing old and can't live for ever - in fact, that was the only statement in there worth making at all. Not exactly grounbreaking journalism to reveal that a man who is 80 years old won't be able to keep doing his job for the rest of eternity. Frankly, I expect better of the NY Times.

sbaqai 16y ago

Here's a direct link to the audit committee report: http://www.berkshirehathaway.com/news/APR2711.pdf http://www.berkshirehathaway.com/news/APR2711.pdf The NYT article is inflammatory, makes factual errors, and is even a bit trollish at times. A simple analysis or opinion piece would have been fine. "Since then, Buffett has been subject to criticism of a kind he has never before faced." “'It makes you question Warren’s judgment,'” - author who happens to have a new Warren Buffet book out. "What moved him to pre-emptively clear Sokol, who had so clearly violated Berkshire’s code of conduct, of wrongdoing? What does that tell us of possible flaws in Buffett’s character?" "He often buys companies with very little due diligence;" "His board is made up primarily of cronies" Yeesh

fleitz 16y ago
"He often buys companies with very little due diligence;" that doesn't sound like Buffet at all. If everyone who bought stock, CDSs, and other complex financial instruments did as much diligence as Buffet everyone in finance would still think a TARP is something you use to protect things from the elements.

natural219 16y ago

I was at the shareholder's meeting. Several of the initial questions were about the Sokol incident, and many were hostile toward's Buffet's response (especially his initial press release). Buffet answered every question clearly and confidently, tracing his line of reasoning in terms of the information he knew at the time. I don't think the image presented today by Buffet and Munger is consistent with the conclusion that Buffet is reeling from a "serious dent in his pristine image."

deleted 16y ago

[deleted]

joeycfan 16y ago

During the dot com bubble I read an article in Baron's claiming it was time for old Warren Buffet to be put out to pasture for missing out on this good thing. This is another such mistake.