Excuses, Excuses, Excuses

By JOE NOCERA
NYT

Whenever the world’s greatest investor gets in a tight squeeze, he straps on his angel wings, readjusts his halo, and leans on his reputation for avuncular straight talk to make the problem go away.

Warren Buffett did it in the early-1990s, when one of his holdings at the time, Salomon Brothers, was caught in a Treasury bond scandal. He did it in the mid-2000s, when executives at General Re, owned by Buffett’s company, Berkshire Hathaway, were prosecuted for concocting a phony transaction with A.I.G.

Now he’s doing it again as he attempts to gloss over the actions of a close associate that look suspiciously like insider trading. The deputy, David Sokol, resigned earlier this week, claiming he wanted to concentrate on his “philanthropic interests.” (That’s what they all say.) The resignation, said Buffett, came as a “total surprise.” (They all say that, too.)

In a statement, Buffett laid out the facts about Sokol’s stock purchases of Lubrizol, a company Berkshire Hathaway agreed to buy two weeks ago. To give Buffett his due, this is decidedly not what chief executives usually do in this circumstance. That’s why the Oracle of Omaha has such a glowing reputation in the first place. But the statement also contains a sentence that only Buffett would have the chutzpah to write:

(More here.)