Trouble in Warrentown

Will Sokol-Gate destroy Warren Buffet's legend?

May, 2007; a crowd of thousands gather in a massive auditorium in Omaha. All smiling, all happy; some even brought their kids along for the Kool-Aid. But the familial atmosphere and pedestrian khakis betray their credentials; some are bankers, some are fund managers, strategists, analysts, and none of them are there for the lovefest.

What could bring them away from their beloved financial hubs?

Well only one man can draw such a crowd.

Only one man could inspire such awe and love back then.

This was Berkshire Hathaways's annual meeting, and that one man is the greatest investor in the world. That man is Warren Buffett.

Well… that was then, not so much of that happening now. Hah.

Over the past few years, Buffett bashing has become quite en vogue in the investment community. I used to be one of those bashers, until I simply came to respect the way he operates, but after the recent insider trading scandal of David Sokol, a new wave of Buffett bashing has emerged- with a fury.

Buffett isn't shy about calling out wrongdoing elsewhere; his shareholders will want to know why he lets this kind of thing go on right under his nose.

Instead of condemning Sokol, Buffett gave him a pat on the back on the way out the door. Since when is it enough to merely uphold the letter of the law, especially at Berkshire? Whatever happened to Buffett's famous saying, "Lose money and I will forgive you, but lose even a shred of reputation and I will be ruthless"?

He's been called a hypocrite, a cheat, a liar, and God knows what else lately.

I didn't even bother checking on what happened after Charlie's admission.

And then there's Michael Steinhardt.


That magnificent bastard had to go on and lash some truthiness on CNBC, causing another PR shitstorm and a reawakening of the anti-Buffett insurgence.

Will this be the end of Warren Buffett's exalted status?

The vitriol against him today has never been worse and Berkshire's meeting at the end of this month could prove interesting. Sorkin even equates it to a grand inquisition.

Or can he just shrug all this off and still be Warren Buffett, the Oracle of Omaha? The Greatest Investor alive?

Have a good one WSO.

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