Renowned billionaire investor Warren Buffett, often hailed as the Oracle of Omaha, has come under scrutiny in a recent investigation by ProPublica. This in-depth analysis, based on an extensive trove of tax information from some of America's wealthiest individuals, brings to light intriguing details about Buffett's personal stock trading practices.
According to ProPublica's findings, Buffett engaged in stock trades in his personal account on at least three occasions, aligning with transactions made by his company, Berkshire Hathaway. This revelation raises eyebrows, as Buffett has consistently emphasized the avoidance of such practices due to potential conflicts of interest, a sentiment echoed in Berkshire's internal policies.
“Buffett has long said such trading would be a conflict of interest, and Berkshire policies prohibit it. But confidential records show that, on at least three occasions, he sold millions of dollars of shares in stocks that Berkshire was trading,” the report said.
Despite public statements stressing his commitment to avoiding personal trades mirroring those of Berkshire, the leaked IRS data suggests a different narrative. The investigation discloses instances where Buffett traded stocks in his personal portfolio either during the same quarter or the quarter preceding Berkshire's transactions in the same companies.
An illustrative case revolves around Buffett's public endorsement of Wells Fargo in 2009, amid the financial crisis. Despite expressing confidence in the bank's business model, the investigation reveals that Buffett privately sold $20 million worth of Wells Fargo shares in his personal account just days after praising the institution in an interview with Fortune.
Buffett's actions extend beyond Wells Fargo, with the investigation highlighting notable personal trades in companies like Johnson & Johnson and Walmart. In one instance, Buffett sold $35 million worth of Johnson & Johnson shares, coinciding with Berkshire's disclosed sale of the same stock. Similarly, in 2009, Buffett seemingly contradicted Berkshire's portfolio by selling $25 million of Walmart stock in his personal account while the conglomerate significantly increased its stake in the same quarter.
These personal trades, if proven accurate, potentially violate Berkshire's ethics policies, authored by Buffett himself. The policies explicitly mandate the public disclosure of all securities transactions by Berkshire before employees can engage in personal trading of those stocks.
In total, between 2000 and 2019, Buffett reported at least $466 million in personal stock sales, suggesting a significant level of personal involvement in the market. This revelation adds a layer of complexity to Buffett's public image, as it implies a misalignment between his stated principles and his private actions in the realm of stock trading. As this investigation unfolds, it prompts a reassessment of the transparency and ethical considerations within one of the most revered investment entities globally.
(With agency inputs)
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