The David Sokol incident has been a disaster and shame for the reputation of Berkshire Hathaway From what can be garnered so far, Sokol has violated the Berkshire Hathaway (BRK.A, Financial) (BRK.B, Financial) code of ethics, and possibly the law. The SEC is currently investigating the case. Regardless of the outcome, this will be viewed as a badge of shame on the company.
Now it looks like Munger has some beans to spill. Charlie Munger stated that he had a stake in BYD "for years" before Berkshire bought a large stake in the company. The transaction was also atypical, as some have commented that BYD has no moat, and it is a technology company. This was not a typical Warren Buffett investment, and it was Charlie Munger who suggested the purchase. He was quoted as saying, “I certainly suggested that Berkshire look at investing in something that the Mungers were already invested in, but we’d been in it for years."
Here is a brief excerpt:
The Munger investment was cited last week by former Berkshire manager David Sokol in a CNBC interview as precedent for his purchase of Lubrizol Corp. (LZ) shares before recommending the company as a takeover target to Buffett. Sokol, whose resignation from Omaha, Nebraska-based Berkshire was announced by Buffett on March 30, said there was nothing unethical about purchasing about 96,000 Lubrizol shares in January.
“I don’t believe I did anything wrong,” Sokol said, according to a transcript on CNBC’s website. “Mr. Munger owned a significant piece of BYD before he mentioned it to me to go look at it.”
Munger, 87, said his family invested with money manager Li Lu in BYD through a partnership that has a stake of about 3% and that he urged Sokol, then the leader of Berkshire’s energy business, to scout the business.
Below is the link to the full article: http://www.bloomberg.com/news/2011-04-05/munger-says-he-told-buffett-of-byd-stake-stayed-out-of-berkshire-s-talks.html
Disclosure: None
http://www.valuewalk.com/
Now it looks like Munger has some beans to spill. Charlie Munger stated that he had a stake in BYD "for years" before Berkshire bought a large stake in the company. The transaction was also atypical, as some have commented that BYD has no moat, and it is a technology company. This was not a typical Warren Buffett investment, and it was Charlie Munger who suggested the purchase. He was quoted as saying, “I certainly suggested that Berkshire look at investing in something that the Mungers were already invested in, but we’d been in it for years."
Here is a brief excerpt:
The Munger investment was cited last week by former Berkshire manager David Sokol in a CNBC interview as precedent for his purchase of Lubrizol Corp. (LZ) shares before recommending the company as a takeover target to Buffett. Sokol, whose resignation from Omaha, Nebraska-based Berkshire was announced by Buffett on March 30, said there was nothing unethical about purchasing about 96,000 Lubrizol shares in January.
“I don’t believe I did anything wrong,” Sokol said, according to a transcript on CNBC’s website. “Mr. Munger owned a significant piece of BYD before he mentioned it to me to go look at it.”
Munger, 87, said his family invested with money manager Li Lu in BYD through a partnership that has a stake of about 3% and that he urged Sokol, then the leader of Berkshire’s energy business, to scout the business.
Below is the link to the full article: http://www.bloomberg.com/news/2011-04-05/munger-says-he-told-buffett-of-byd-stake-stayed-out-of-berkshire-s-talks.html
Disclosure: None
http://www.valuewalk.com/
